This is the question on many internet marketers lips.
Disclosing affiliate links is something that most affiliates don’t actually want to do, but the Federal Trade Commission (FTC) is tightening its grip on dodgy practices.
In other words, you might not have a choice – or lose your business entirely.
If you do a search on the FTC website, you will discover that there is no shortage of rules that regulate Affiliate Marketing. Taking a deeper-dive, what the regulations are really concerned with are misleading practices.
Think about it: we can direct a web user to a seller’s website with all sorts of promises – that we can’t (and have no responsibility) to keep. But of course, once we have got the user there, a cookie is stored on the user’s browser which means if they ever go back the seller’s website and make a purchase, we get the commission dough. And the purchaser has no idea we have gained it.
So the FTC is cracking down on these dubious practices. It’s in consumers’ interest, so it’s fair enough, right?
Still not convinced? Here’s what the FTC can do to screw up your business
The FTC has absolute power to shut you down if you don’t adhere to the law and their rules. Period.
No business is exempt – no outfit too small or too big. In 2012, Google paid over $22million in penalties for adding tracking cookies and ads on Apple Safari browsers. And in 2011, a company selling guitar-lesson DVDs paid $250,000 to settle Federal Trade Commission charges for deceptively advertising its products through online affiliate marketers. The FTC’s revised guidelines on endorsements and testimonials explain how the agency may find endorsements or testimonials unfair or deceptive.
When do you need to disclose?
The FTC states that for endorsements and testimonials in advertising where there is a ‘connection’ between the endorser/affiliate and the seller of the product or service, full disclosure is required.
The term connection is vague, but its interpretation should be real simple: if there is a contract to post anything about a product or service (even if it is just a verbal agreement), then this is a ‘connection’ that should be disclosed.
An endorser can be a corporation, an individual or group. We all fall into one of those categories. So when we provide information about our experience and beliefs about a product (whether they be accurate, or not), we are an endorser. This means we are mandated under FTC rules to communicate this relationship with the product, service or brand we’re providing the information about.