I like to think of myself as a relatively ethical person. Of course, as ethics are completely subjective, that statement is pretty redundant. Therein lies the problem – because even though I might not think something is ethical, that doesn't mean that someone else doesn't feel differently. That's the problem with self-regulation in industry – failing a law, the ethical standard is set by the lowest common denominator, meaning that pretty much anything can be acceptable so long as you can use the excuse “well, everybody else is doing it.” This creates a vicious cycle that Seth Godin very accurately described as “the race to the bottom.” We've seen this a lot recently with the financial crisis – no matter where you sit on the political spectrum, we can all pretty much agree that the current crisis was at least contributed to, if not caused by, unethical and dubious action of many traders and CEOs on Wall Street and in other financial institutions. But as so many of them have said “we didn't break any laws.” Obviously, this presents a problem.
The FTC has announced plans to enact regulation on the internet marketing community. Essentially, this regulation would prevent bloggers, affiliates or web-marketers from making atypical, unsubstantiated or downright untruthful claims about their own or another's products. That means that all those customer testimonials with “results not typical” disclaimers would no longer be permissible. In addition, it would require full disclosure of any vested interests, financial or otherwise that one has in a product or business when talking about it – think paid or affiliate reviews.
Five Things That Will Keep You on the Right Side of the Law
This regulation, many people may be uncertain of how it will affect them and what they will need to change. While the exact terms are still being defined, I believe the following tips should keep you on the right side of any proposed regulation.
1. The Grandparents Rule
This is probably my personal favorite. For whatever you're doing, if you'd feel uncomfortable explaining it to your grandparents, then chances are you might be doing something wrong. People are often able to mask their discomfort with what they're doing by keeping their actions secret – imagine telling someone who's opinion of you means a lot. I find this a good 'golden rule' for all business practice.
2. Disclosure – not just a old Demi Moore flick
If you have a vested interest in what your talking about, for example a review with an affiliate link, admit that you are an affiliate. If you are writing a paid review, state that as a disclaimer at the bottom. The goal here is to be 100% transparent. If you have honest reviews throughout your site, including negative reviews of sub-par products, then people can still find you credible even if you were paid to write it. Some bloggers have very effective blurbs on their page stating that they charge $X for a review, but they give no guarantee that the review will be positive.
3. Don't sell what you don't believe
If the claim just sounds ridiculous, and you don't trust that the product actually can do what it says it does – don't promote it. Check that there's actually verifiable evidence for the claims made by the product's creator.
4. The Middle of the Bell-Curve
Most people are average. If the “results not typical” disclaimer is no longer permitted, then you will actually have to make sure that the average user can receive the stated benefits of the product. Now this can be difficult, as many companies simply don't know what the average experience is and feedback is usually confined to those with extreme view – either those who loved the product, or those who hated. Perry Marshall has a great piece on this here. Personally I think they key is to approach it honestly, like if you were selling the product to a friend. Don't make guarantees where there is no guarantees – but you can tell people that if they work hard with a product, or if they commit to a product, they have a really good chance of succeeding.
5. Affiliates are Expendable
It would be nice to think that affiliate managers have the best interests of their affiliate at heart – unfortunately this isn't always the case. Some companies may have few qualms about letting their affiliates takes risks that they would not – allowing their affiliate to make more grandiose claims than in their own sales copy. Watch out for this. Make sure what you're saying is congruent with what the company is saying about themselves. Don't let them let you take the rap for inaccurate claims.
Blessing in Disguise
This regulation could be a great step forward for internet marketing. By punishing those who engage in disreputable actions, it makes the playing field more even for those who fall on the right side of the ethical line. While it's not surprising that some ad networks are coming out against this, I don't think it will be extinction-level-event that they're building it up to be. Just like the bankers who are balking at new laws and financial regulation – when you've made lots of money one way, you're going to be upset when someone tells you you can't do it any more. That doesn't mean that you're still not going to be able to make money – it probably just means that you're going to have to work a bit harder for it!
This regulation could also create a big plus for the internet marketing community – increased credibility. Scammers make it harder for every legitimate internet marketer to be taken seriously. As Seth Godin said in a recent interview with Shoemoney (listen here), our job would be infinitely easier if there were no scammers – as people would have no reason not to trust us when we're promoting a product.
While there may need to be a few tweaks to the regulation to make it realistic and workable, the sentiment – making marketers be honest, can not really be argued with.
In a perfect world we wouldn't need laws because everyone would always do the right thing. Unfortunately we don't, and laws are our way of maintaining the most fair and equitable treatment for the majority of the population. Agree? Disagree? Controversial stuff like this always brings out strong opinions, so I'd love to hear from you!
For more in-depth information on the FTC proposal, check out these great articles: