Is This The End of Affiliate Marketing?
The FTC finally published its revisions to the 1980 testimonial and endorsement rules. Some bloggers, copywriters, and marketers, even lawyers, have talked about this, sometimes a lot more eloquently than me.
It’s obvious the FTC’s intent is to curb, control, and go after those nefarious flogs (i.e., “fake blogs”), like Google Money and Acai Berry. But the language is left to be desired and, if not clarified, can lead to some serious repercussions.
Especially for affiliate marketers.
Based on what I’ve read, I can easily interpret “affiliates” and “vendors” falling in what the FTC dubs as “endorsers” and “advertisers.” (According to TechCrunch, the FTC has responded and clarified this somewhat, which I will come back to in a moment.)
In its new rulings, they make two powerful points. Points I agree with. At least, in intent. TechCrunch did a great job fleshing out the changes and its implications. The most important of which is the fact that the FTC can fine you $11,000 per infraction.
But these two biggest changes, which also may become problematic, are…
1) Authenticity
We must be authentic in our claims and testimonials. That’s common sense, and I applaud the ruling. But also we must show they are atypical, and to buttress any claim or testimonial with one that the consumer can reasonably expect from using the product.
This, in itself, opens a huge can of worms.
If a product is new, untested, or not used as intended by the user — which is, sad to say, what the typical user fails to do most of the time and over which we have no control — then how can we share what we believe the user will reasonably expect?
Let’s say you sell a diet pill. There is only one way to consume it. Plus, there’s only one result. You either lose weight or you don’t. Simple. And in this case, you can carry out scientific analysis to measure the results in order to discover what is typical.
For instance, you simply get 100 people to take your pill, measure their results, and post the average. And you can make them aware of the average result. Easy, peasy.
But in the case of a marketing or business-building training program, which teaches multiple strategies, multiple concepts, for multiple types of businesses, in multiple markets, the problem is that there is no “one size fits all” of using this product. It’s impossible.
(And most how-to or do-it-yourself information products fall in that category.)
Every single user of that training program will have a different result. There is no such thing as “typical.” In fact, by the very existence of such a training program, all results are atypical. So the question is, how do you comply with the new legislation?
That said, if you do offer a one-size-fits-all product, or one with a singular, measurable result, then can you simply say, “If used as directed, you should get [typical result]?”
According to the FTC, you no longer can.
The older rule said that having a blanket disclaimer (somewhere, such as a link at the bottom of a sales page), to show that results are atypical and that individual results may vary, is no longer possible. The FTC says we “no longer have this safe harbor.”
The next problematic issue is the one of liability. If I’m an affiliate and point to or reprint testimonials given to me by the affiliate vendor, and they are “atypical,” am I therefore liable? According to the FTC, I am. And that makes sense. In theory.
But in practice, it’s a potential nightmare waiting to happen. (I’ll come back to this in the second point below, as it is an important one we need to look into and cannot ignore.)
2) Disclosure
If the endorser has a relationship with the sponsor, they must disclose it. Even if it’s a payment “in kind” or any material connection between endorser and advertiser, such as an exchange of exposure, free products or services, even contests and joint ventures.
(How about if it’s just buying them a beer? But I digress.)
Again, this makes sense. But does that mean we have to tell everyone when an affiliate link is an affiliate link? What about other media, such as social media like Twitter? (The FTC did mention “social media,” too.) How can you do this in 140 characters or less?
What will be interesting is to see how the FTC clarifies these rulings (on a “case-by-case basis,” they say). But liability is an important issue and not to be taken lightly.
For example, let’s say one of my less-than-ethical affiliates blogs about me. They lie in their endorsement or review, exaggerate some of the claims I make, or simply fail to indicate their affiliate relationship with me. All of which are things I have little control over.
Now, here’s the rub.
The new rule stipulates that the advertiser and endorser are both liable. Does “advertiser” mean “vendor?” That is, the affiliate program owner? Meaning, are we, as vendors, also liable for what our affiliates say, sell, promote, or blog about?
Again, it makes sense that we should. To a degree. But what if the affiliate goes rogue, and uses unacceptable practices to bump up their sales? Sure, they broke the terms of their affiliate agreement. We can cancel their accounts and forfeit their commissions.
But the damage is done. And believe me, the government has a long memory.
Here’s my question. When the FTC says that the “advertiser” and “endorser” are liable, do they mean exclusively? Or inclusively? In other words, do they mean that either one is liable, specifically the one who engaged in unethical (and now, illegal) practices?
Or do they mean both are liable, regardless of who’s at fault?
My friend, Armand Morin, in a personal exchange, said this…
The way I read it as well is that the vendor is ultimately responsible. If you have a rogue affiliate and they do not disclose that it’s a promotion and they are being paid to do so, then you are the responsible party as well as they are.
It reads, though, that the ($11,000) fine comes to to the company and not the actual affiliate. I may be wrong on this, but it looks that way. Bottom line, it’s not a good thing.
Either way, “this is a game-changer,” says Armand. And I agree.
This could literally mean a ton of affiliate programs shutting down, if this is the case. For some marketers, their entire businesses, which rely heavily on affiliate promotions, would die — or at best, be forced to make huge overhauls to their affiliate systems.
Because it’s now too risky to operate an affiliate program.
Or in an attempt to comply with the new rules, they must carry out an expensive, labor-intense application and review process, where they must vet, qualify, and monitor every single affiliate. And do so with hundreds, even thousands, of existing ones.
Logistically, it’s another nightmare.
Nevertheless, it remains to be seen. Clarity is going to be key. Some people have blogged about their concerns and need for clarity. For example, this blogger posted a rather interesting, and somewhat sarcastic, open letter to the FTC. And it makes sense.
Sure, it has less to do with affiliate marketing, but some questions are relevant — and applicable — to our industry as well. For instance, the third question in that open letter can be easily extrapolated to the affiliate space just as well. It says…
If an unpaid blogger at the Huffington Post “endorses” a consumer product without meeting the FTC guidelines for disclosure of “material connections” to the makers of that consumer product, who’s liable: the blogger or the Huffington Post?
However, in the TechCrunch post linked earlier, the author posted a response from the FTC, which did not appear on the original blog post. The FTC clarified a few points, but at the same time they opened up several new questions. Here was their response…
Update: The FTC responds
When asked if the FTC views bloggers equally and whether or not it recognizes levels of authority on par with traditional media, Mary Engle, associate director for advertising practices, clarified its position and perspective, “All bloggers aren’t the same and we are not saying that all bloggers are marketers. Most of them are ordinary folks musing or sounding off. The question as we put it in the notice we published today is whether, viewed objectively, the blogger is being sponsored by the advertiser. (We list a number of factors to consider.) Independent product reviewers, whether offline or online, would not be viewed as sponsored by the company whose products they are reviewing.”
Engle further observed the distinction between expert and consumer bloggers, “But if bloggers regularly receive free products from a company, the blog audience might view their reviews differently than if they went out and bought the products on their own. Under those circumstances, bloggers should disclose they got the products from the company. This is consistent with the WOMMA code of ethics. And, companies who use bloggers to generate buzz about their products by sending free merchandise should have a policy that their bloggers should disclose.”
I think this clarifies it somewhat, because those who create blogs and, on occasion, have product reviews such as affiliate marketers who are, according to the FTC, “independent product reviewers,” are not the ones who are targeted in this case.
But are affiliate marketing vendors still safe?
Granted, the FTC appears to be aiming for blogs where “the blogger is being sponsored by the advertiser.” And that “independent product reviewers, whether offline or online, would not be viewed as sponsored by the company whose products they are reviewing.”
But it’s still a little muddy. For example, is affiliate marketing considered “sponsored advertising?” Or is an affiliate marketer an “independent product reviewer?” I think — and hope — the FTC will be clarifying its position soon. I know they will as we go along.
We’ll just have to wait and see, I guess.
But for some people, waiting, taking the risk, and possibly becoming the target of the FTC who wishes to make an example out of them, may be too much to bear.
My intent was to simply express my concerns, as the lack of clarity can become problematic for legitimate marketers. It may change affiliate marketing as we know it.
It wasn’t too long ago, when a now-famous Internet marketer — he wasn’t so famous at the time — was hit by an FTC lawsuit, over $250,000 in fines and penalties, including seizures of his property, accounts, and his business, just because of a “rogue affiliate.”
In this case, it was a rogue resell-rights owner. He unethically promoted this marketer’s product, which contained marketing materials and templates from the original marketer. When they were caught, they went after the one whose name was on the salesletter.
The original marketer, not the rogue who broke the law.
That’s how serious this could be. Just my three cents.
Update #2: The folks over at FastCompany interviewed FTC representatives to clarify some of its rulings, and it did make some of it a little clearer to appease certain fears. The gist from the interview comes down to three important clarifications:
1) Complaint-Driven
The FTC stated they won’t have reviewers scouring the web on a regular basis searching for violators. They will work mostly on a case-by-case basis, based on complaints. They will rely more heavily on education and voluntary compliance than prosecution.
2) Three-Strike Process
They will not fine offenders at first. Again, prosecution won’t be their first aim. They will instead follow a three-step process with which they give offenders some time to redress and comply. Even with the most flagrant offenders and “wost-case scenarios.”
They will start by issuing a warning. If that doesn’t work, then they will send a cease and desist. And finally, if all else fails, then they will fine the offender up to $11,000.
3) (Perceived) Authority
Casual affiliate links or product reviews are fine. What the FTC seems to be really going after are blogs that are more extensive, either as recognized authorities themselves, or perceived as authorities by blogging about one particular product or business.
I’m not a lawyer. But my guess is, if your blog is all about reviews but has multiple affiliate links, you should be fine. But if you’re an authority, or if your blog is all about a particular product or business, you must clearly disclose your relationship and compensation.
For instance, TechCrunch does reviews on a regular basis. They are considered an authority. So they are expected to disclose. Same with blogs dedicated to entire products, such as those Acai Berry blogs or Google Money blogs.
Remember the Wal-Mart “trip around America” fiasco, where a couple was blogging about their experiences by driving to Wal-Marts from state to state? The flak that followed was because they failed to disclose they were being paid by Wal-Mart.
Their blog was entirely focused on their travels. Hence, it had perceived authority.
The bottom-line?
If you own an affiliate program, I think most of your affiliates are safe. But if you have one affiliate who decides to set up an entire blog or website dedicated to a single product or business, they must disclose their relationship as there is perceived authority.
That makes perfect sense. While these clarifications help a lot, and now a clearer picture is emerging, some questions still remain unanswered. We’ll just have to wait and see.
Update #3: My good friend Jim Edwards grilled FTC Director Richard Cleland on the new laws coming into effect on December 1st. Absolutely golden information. If you’re confused or worried about these new laws, you must watch this video. It’s excellent.
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65 Reactions
Well done.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Was waiting to see what you’d say about this! I’ve been collecting posts and opinions from various blogs for a week or so myself and will make a post on my blog about it too.
I totally agree that anything that can help increase transparency is a great thing. I also think that if you’ve worked on building the relationships with your market then disclosing affiliate links shouldn’t be an issue at all. Some people I know (myself included) go looking for affiliate links when they purchase products so they can give friends the commission.
Thanks Lynn!
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Great post Lynn, I too have been waiting for your opinion.
You know what really annoys me about this new ruling, that “old school” print media is excluded. Magazines are inundated with free products so they will write about them. How is that any different than a blogger? I think it is worse.
If I recommend a lipgloss I got for free, or am an affiliate for, how is that worse than Vogue recommending it because they got it for free, and know that Estee Lauder spends $100K (totally made up figure) a month advertising in their magazine? Is my little opinion that much more persuading than Vogue? I don’t think so …
I am all for disclosure, but I think there is a huge double standard here. If a blogger has to disclose, so should ALL media.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Just like the government to create regulations to help solve a problem and create a ton of unintended consequences. Transparency is a wonderful thing. Consumers are becoming jaded by the onslaught of review sites which means they lose their effectiveness. This isn’t good for marketers either.
I have a couple of problems with how they implement these rules though.
1) They appear to create a different set of rules for bloggers/web only publishers than a “real world” publisher as far as disclosure requirements go.
2) They don’t do a good job of detailing HOW to make this work. Can I post one page on my site that says “Everything you read here may contain an affiliate link. It may be a review of a product that was provided for free or I was paid to write this review. My reputation matters to me so I will only review things I truly believe in or give you my honest opinion” or do I have to post a disclaimer at every link?
3) Testimonials are dead. The rules they put in place basically kill them. The question now becomes can I tell my own story? Give the details of what I did and the results I got? On average people get ZERO results from this product. The small minority who actually do something with it will see results. The ones that rock it may come close to duplicating my results or may even exceed them. Is that acceptable?
Maybe I should start a review site for review sites People could set up real name profiles like on Amazon and post real reviews of products. Changes in the rules will make a change in how people go about marketing. It will be interesting to see how this gets implemented and the changes people make.
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Christie, that is a good point about print media.
Lynn, thanks for once again putting things so plainly. Regarding “c) When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product. [See § 255.1(b) regarding the “good reason to believe” requirement.]“…
…I remember when I first came across affiliate marketing, a few years ago now, how shocked I was that people would recommend something without using it, and how incestuous I thought all these people recommending each others products were. I now know that there are marketers whose recommendations we trust because of their core integrity, but I never want to lose that memory of my initial reaction, now that I’m immersed deep in the world of internet marketing myself.
This comment was originally posted on ClickNewz! Internet Marketing Blog
I added a Disclosure page to my blog early this morning.
My next question is that if you post your atypical results from a product you will receive a commission on; how do we go about getting typical results to share?
I know as a product creator myself, I hear from those folks who have done well with my product, but usually nothing from those who have not (whether it’s because they haven’t actually used my product they purchased, or some other reason).
So how do we get the typical results? Survey or Poll our consumers? Does this mean that all affiliate product creators need to attempt to contact clients to poll for typical results?
Traci
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So, may I ask if I am clear on this? From what we know now, affiliates should have a disclosure statement on their website and blog, stating that they are an affiliate and will receive a commission on a sale?
Is setting this up on one page good enough and having a link to it from all pages – it doesn’t have to be completely stated on every product review page, does it?
This comment was originally posted on ClickNewz! Internet Marketing Blog
Why Most People Don’t Make Any Money From a Business Blog | DiY Marketing Coach…
If you believe all the hype that’s out there about blogging, every blogger should be rolling in the dough. The truth is most business blogs don’t make any money for their owners….
This comment was originally posted on DiY Marketing Coach
I’m sorry, but I think all this is nuts. People sell things all the time without having actually tried the product. It happens in every store you go into. I went to a computer store the other day to buy a laptop for my son. I asked the salesman for a recommendation. He gave me his thoughts on what he thought was best. He doesn’t actually own the brand and model that I was looking at. He couldn’t possibly own all the brands that he sells at the store. Same for a used car salesman (yeah, I know, not the best example, but why aren’t they held to the same standard). Think about how many times you go into a store and a salesman tries to sell something to you. They go by things they have heard, research they have done, and what little they may actually know. And these salesman get paid for selling me something. And often they get a commission. Hmmm. Sounds like affiliate marketing. I don’t see how our websites are much different. I recommend something, you buy it, I get a commission.
Ever seen an advertisement for something in the newspaper? Has every claim been verified and is there anything that makes it obvious that if you sell something, someone is going to make some money on it? Of course not, it is just assumed.
I think that online sellers, whether affiliate or not, just need to be honest. If you haven’t used the product, don’t say you have. Don’t use fake testimonials. Don’t claim things that aren’t true. But why can’t it just be assumed that if I recommend a product, and you buy it, I may get a commission? Sure would make everything a whole lot easier.
I don’t understand why online sales are being held to a different standard than conventional sales.
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Great comments, Scott. I hadn’t thought of it like that but you are absolutely right.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Good question, Traci – and Michel Fortin raised that same question in his post regarding this update:
” in the case of a marketing or business-??building training program, which teaches multiple strategies, multiple concepts, for multiple types of businesses, in multiple markets, the problem is that there is no “one size fits all” of using this product. It’s impossible.
(And most how-??to or do-??it-??yourself information products fall in that category.)
Every single user of that training program will have a different result. There is no such thing as “typical.” In fact, by the very existence of such a training program, all results are atypical. So the question is, how do you comply with the new legislation?”
source: http://www.michelfortin.com/affiliate-marketing/
There was one particular example though that brought more light to this. I believe it was in the PDF document, not the web-based document. The example was a diet product and the statement that “Sally” had lost 56 pounds taking this product. That type of statement is atypical and not compliant. However, when they said “Sally lost 56 pounds by exercising vigorously for 6 hours a day, eating only raw vegetables and taking this product” – that WAS compliant. The first instance being misleading, the second not.
So in regards to endorsements or testimonials, and specifically atypical results, more information is required to make sure that consumers are aware of all the details.
This comment was originally posted on ClickNewz! Internet Marketing Blog
In the original post above I quoted Richard Cleland who says that you have discretion on that point – that you can include it within the discussion or in close proximity. Also, if you are not compliant you will receive a warning and an opportunity to comply – so no real worries.
I would include a disclosure document, and a prominent link to that page from all pages of your blog/site to start. In cases where you think it might be necessary, such as individual reviews or ads, disclose as much detail as possible.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Scott, I agree with much of what you posted. I also think the guidelines will quickly face a legal challenge for the the reasons you give.
Why is it necessary to disguise, cloak, or otherwise shorten a sff link in the first place? Because the same people who know that most sales person are on commission who do there best to beat an affiliate out of the commission they receive even though in most cases there is no monetary reward by doing so
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I agree on the point of being honest. I’ve gone out of my way to show proof of purchase in my own product reviews, and teach the same to my readers. (see: http://www.clicknewz.com/1995/how-to-write-a-product-review/ ). I discuss the order process, the shipping time, have taken video of order form walk-thru, etc. Proof & trust sell.
As for your other comments regarding sales personnel in stores, there is an understood expectation of their lack of ownership. They are simply trained personnel and that is assumed and understood.
The main problem the FTC has with online review sites is the fact that the relationship or the context of the endorsement is NOT assumed or understood. For example, if someone reads online that Sally lost 56 pounds with this diet product, they assume that statement is true and that she in fact lost 56 pounds just by consuming that product (period). It’s misleading, and that is what the FTC is attempting to correct.
I still think that “buyer beware” and personal responsibility – aka a little common sense – should be bigger factors in any purchase we make, online or off.
But then, there are people out there just looking for sneaky new ways to rip people off, preying on their emotions – their deepest fears and desires. All said and done, I think we have the Acai campaigns to thank for this one…
This comment was originally posted on ClickNewz! Internet Marketing Blog
I think it’s important to realize, and helps put this all in perspective, that the FTC is not targeting the typical blogger – people like us. They are going after the “fake bloggers” such as those for the Acai products that featured false testimonials and fake profiles.
At this point, someone has to actually complain to the FTC for them to review your blog – and even then you are simply given a warning and an opportunity to comply. I read somewhere that they had to receive at least 100 complaints in order to issue said warning – though I haven’t found an official statement on that yet.
Regardless, I don’t think we have much to ‘fear’ over all of this. Do your best to comply – it will only make you a better blogger, or better at online sales in general.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Once again, Lynn has hit the nail on the head and drove down that it is the lack of transparency,made-up testimonials. and other such silliness that is the real problem. Hopefully it will take 100 complaints for a first time warning issuance as there are people who love to complain & bitch and who will now that they have another avenue to go down.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn,
Moving past our actual blog pages, how do you think this affects affiliate marketers? Do you think we’ll be required to disclose every affiliate link in our emails, special reports, information products, and continuity programs?
I’m all for honesty and transparency and think that consumers deserve it. I’m just wondering if perhaps we’ll be able to include a statement in each product explaining that we have an affiliate relationship with the products we recommend or if we’re gonna have to spell it out each time we include a link.
That certainly won’t make our products very easy to read, will it?
Will there be prohibitions against link shortening services like bit.ly? What about cloaking/redirecting links so affiliate commissions don’t get stolen (or are at least less likely to be)?
Do you think that affiliate marketing as we know it today will cease to exist?
Thanks for your research and all the details you put in your post. I’ve been following the FTC story and your article is one of the most thorough and understandable I’ve seen.
Thanks, too, for facilitating the ongoing conversation.
Sheryl
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn,
I agree with much of what you have said. I don’t know about you, but I have salesman in stores try to sell things to me with what I thought were exaggerated claims. Sometimes I’m knowledgeable enough to call them on it, sometimes I am not. We’ve probably all been burned at least once in our life with that type of thing.
My biggest concern, after reading some of the posts that you referred us to in your article, is that these rules will be further reaching than what we suspect right now, and that the ramifications will be much larger than we suspect. I hope not, but, in my mind, it is a big unknown right now.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Hi Sheryl,
No, I don’t think this spells the end of Affiliate Marketing. That was not actually specifically addressed in so much as the pay per post type situations, or typical review sites that receive compensation for their product endorsements.
That said, it will obviously affect affiliate marketers. I think a blanket disclosure on your domains will be a good start. Unless someone complains, you won’t have to worry about the FTC prowling around your site just looking for violations. And as stated in the original post, the first step would simply be a warning and an opportunity to comply to their standards.
This comment was originally posted on ClickNewz! Internet Marketing Blog
That’s true, and there’s no way to tell how things might unfold in the future. The best advice is to keep your business honest, and keep your ears open for updates.
On a good note, this will weed out a lot of crap/spam we compete with in many places online, and will open up more opportunities for real online business owners.
This comment was originally posted on ClickNewz! Internet Marketing Blog
“The question now becomes can I tell my own story? Give the details of what I did and the results I got?”
Exactly.
I represent over 200 products. One in particular stands out above all the others because of the dramatic effect it’s had for me personally. Because it’s such a compelling personal story, I share it with everybody I talk to.
I also always add a “your mileage may vary” statement to the end of my story. It’s just plain good business. If I sell a product to a customer and make a claim I can’t support, I’m going to lose that customer fast.
This comment was originally posted on ClickNewz! Internet Marketing Blog
And if “someone complains”, will the FTC require their real name/website? Will they tell us who complained? And indicate what our relationship might be, such as competitor? Or jealous ex-spouse or ex-affiliate?
Not sure about y’all, but I’m gonna encourage my kid to go to law school next year. It’s gonna be a goldmine.
(** I have not endorsed any particular law school, and I have not implied that my child is smart enought ogo to law school. I have not even indicated which of my children, if any, this post may refer to. And no law school has offered my child a spot or scholarship money to attend.)
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LOL @ your disclaimer, Anita – I love it!
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I just published a new product review here at ClickNewz that I wanted to share with you here as an example:
Super Affiliate Handbook Review
In this review I share my “atypical results” of earning $30k in the first 9 months, part time alongside my already full time business, by implementing what I learned in that guide.
I qualified those results as atypical and explained why I was able to achieve those results when others might not.
This is what the FTC is looking for – versus just saying “I made $30k in 9 months and you can too!” with no detail or explanation. Make sense?
This comment was originally posted on ClickNewz! Internet Marketing Blog
“This leaves Affiliate Marketers asking the all-important question: Are we sponsored by the merchant, or are we independent product reviewers?” <- this was one of the many things that I was wondering as well.
Another thing that was rolling around in my brain is that up until now in a lot of cases a “disclosure policy” on a blog gave the impression that a blogger was doing paid blogging, because that’s a requirement for a few of those companies…. there was even some talk at one point that Google was slapping based on those posted disclosure policies since many were using a copy and paste free off the web type policy.
The whole FTC thing has had me sort of on hold in the back of my mind the past week. I’ve been holding off on a new project that I had started, because this whole thing has given me a feeling of unease.
This comment was originally posted on ClickNewz! Internet Marketing Blog
[spewing iced tea] ROFL Girl you crack me up! hehe
As far as knowing who complained to the FTC: that’s a very valid point. I would assume that the FTC would investigate before taking any action.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Honestly, I wouldn’t stress over it. And if you’re concerned about adding a single “disclosure policy” to your blog, take Dan Thies’ advice in http://www.seofaststart.com (free SEO guide) and create ONE page that contains your entire privacy, disclaimer, disclosure & TOS policies all together.
This comment was originally posted on ClickNewz! Internet Marketing Blog
From what I understand it’s going to take multiple complaints (like a minimum of 100) for them to even issue a warning and an opportunity to comply. I doubt we have to worry about the onesies.
But just let someone “harrass” me to that extent without good cause and watch the counter-suit fly
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Here’s a great new article, definitely give this a read:
FTC Reassures Bloggers – Big Brother is NOT Watching:
http://legaltimes.typepad.com/blt/2009/10/ftc-.html
“In a conference call for reporters today, Engle aimed to set the record straight after a flurry of news stories (not to mention blogs and tweets) about the FTC’s new advertising guidelines that were, as she put it, “all wrong.”…”
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Well, this article makes me feel better. Thanks so much for sharing that.
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Will the politicians need to post disclaimers and atypical results on the legislation they are proposing in congress too? Now that I’d like to see. In for a penny in for a pound.
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So much for freedom of speech. Your opinion is your opinion, and damn be the government for trying to slap fines on people for voicing their opinions on a product/service even if it is “misleading” from what the company of the product might say.
Freedom of speech violated? Very so.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Another article I’m reading, sent by @MikeHays:
IAB Tells FTC To Scrap New Blogger Rules
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=115563
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Hi Lynn
I couldn’t agree more with this. The same is true of normal “offline” business. I recently heard of a professional hairdressing salon in a busy shopping mall, who is competing with the quick, hair cut, styling new salon. The professional salon has never been busier fixing up the messes left by the cheaper and less professional business.
On a different note, I run an online gift boxes business, which is not a .com site, and I have my customers testimonial, all of which are unpaid comments. Do these require that I should state that they are unpaid comments or does this only apply to the .com sites?
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Hi Diane,
These guidelines apply to U.S. citizens who operate a business online. I’m not sure how they’ll treat .co.nz or .co.uk domains but I believe it will go back to the domain owner being a U.S. citizen. Makes things even more interesting in my opinion, given that the web is world-wide…
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Thank you, Lynn, for alerting us to this proposd ruling, even though we, Brits, will be unaffected for now.
Although many affiliate promotions are carried out via a blog, there are many of us who use static websites for the same purpose so I take it that this ruling would affect one and all, irrespective of what type of site one has.
Whilst those of us outside the US may not be affected, as yet, it’s generally the case that what the US rules today is adopted by other countries tomorrow so none of us can relax for long.
In any event, transparency is a good thing but it needs to be applied across the board (including politicians’ endorsements, lobbying and special interests/connections/remunerations) rather than aimed at a certain sector of the industry, otherwise it is, in my humble opinion, discriminatory.
Until that happens, I doubt that the FTC’s ruling will have a legal leg to stand on. But even if it does, the remedy is simple and you, Lynn, have already suggested this.
I post my TOS, Disclaimer and Privacy Statement which anyone visiting our sites may read and in which I will now make it even more plain (in legalese) that whilst reviews of products given on our sites are based on our personal experience and opinion, if any item is purchased through our links, earned commissions from the product vendors may be the result and that they should make their own independent enquiries and satisfy themselves of the validity of any statement made in the review and the eventual benefit to themselves if they choose to purchase the item.
Only the very naive person believes, when reading a review, that the recommendation is entirely ultruistic.
The FTC and any other regulatory body cannot ignore the fact that online marketers, like any other enterprise, are running a business rather than a charity. So whilst wild and misleading advertisements/recommendations are wrong and should, quite rightly be stopped (as is a misleading ad), a genuine and informative review based on one’s honest opinion should not be an issue for anyone, including any regulatory body.
I seldom, if ever, purchase anything online, particularly IM products, no matter who has emailed me with an endorsement, without first reading a number of reviews on the subject.
Not once have I thought that the person writing a review was totally unbiased. But the information presented on review sites, a number of which are excellent affiliate sites, have helped me make up my mind one way or another and for that, I’m very grateful.
Often regulatory bodies forget that we, the general public, don’t need someone else doing the thinking for us. We are grown up and have some intelligence to judge whether or not something is false. Even when we are taken in by the persuasive nature of a recommendation only to be disappointed, later, there is redress in the form of a refund from the product vendor. Problem solved! So why the fuss?
So let us honest marketers get on, please, without unnecessary restrictive practice regulations.
James
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Lynn:
Thanks for the explanations and the examples, not to mention the link to the actual PDF.
I am just wondering how long it will be till an IM product on creating foolproof testimonials will come out ? Tick Tock Tick Tock…
Have you ever seen and ad on tv for a medication ? They are required to list every side effect including possible death, yet they continue to advertise. Why, because people will still buy their product because of the possible benefits.
I think we have it easy compared to them… I wonder how small we can make those disclaimers ?
Does “Ads by Google” at the top of adsense ads comply ? Clearly there is no endorsement and they are clearly identified as ads.
Great comments and responses, Thanks to all
Pablo
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Great post, James.
This comment was originally posted on ClickNewz! Internet Marketing Blog
I totally agree Scott! How many cashiers at Wal-Mart have tried every product they’re “selling”? Why should it be difficult for us to make a living because there are a few bad apples?
Thank you Lynn for breaking this down into something actionable.
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James
Thanks for your comments and further clarification. I too will now recheck my Disclaimer and Privacy Policy. Tell me if I have a couple of pages of customer testimonials, should I have a comment on the beginning or end of this page? I would appreciate your feedback on this one.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn, thank you for your excellent and thorough analysis — I will be sharing this with authors and publishers on my networks. Dana
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You should do what makes the most sense for your visitors. I should think a nice statement at the top of the page would work, if you use the end of the page to link to the next one.
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Good question, Pablo. It seems that “Ads by Google” would fall under the consumer assumption that they are advertisements and not personal endorsements. The biggest issue is fooling consumers into believing something that is not the case, so I think we’re safe on that one.
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Thank you, Dana.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Thanx Lynn for putting more info out about this!
And James, your comment is right on the money.
And it begs another question … We, as marketers, have our responsibilities to the consumers but at WHAT point (IF ever) will the consumer be held responsible for THEIR decisions?
NOT in my lifetime, it seems. heh heh
Rick Wilson aka CorpRebel
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Hey Scott…..
This is just the begining of “BIG GOVERNMENT”
telling us what we must do.
This can only be changed at the “voting booth” and
to tell you the truth…..it probably won’t change
these kind of things.
Face it…Our freedoms in America are slowly being
taken away…one by one.
Re: Donald Barrett of ITV Ventures
was sued for millions for making “claims”
about a health food product…yet the drug
company’s get away with “murder.”
This comment was originally posted on ClickNewz! Internet Marketing Blog
Thanks for this Lynn, I really appreciate your feedback, which is most helpful.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Very interesting development…
With respect to the TOS, Disclaimer and Privacy Policy, is there somewhere I can get a copy of it? or do I have to make my own?
Phil.
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Lynn,
Thanks again for a great post and all the follow up you do with questions and comments. I always find a voice of reason and common sense in your posts. Much appreciated!
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Phil,
I can tell you from personal experience – do NOT take or borrow anyone else’s legal docs. These are copyright protected by the attorneys who write them. A few years back I borrowed one page (ignorance) and paid a fine for it.
Hire an attorney and have them done right. It costs less in the long run!
Mike
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Actually, in the examples given by the FTC, bloggers are free to share their opinions of products & services when there is not a relationship with the merchant or advertiser (ie no compensation for the opinion).
It is when they are paid or compensated in some way that their opinion becomes “advertising” and therefore falls under advertising guidelines.
So I can freely tell you which mascara sucks and which mascara makes me look like a movie star, on my personal blog, as long as I am not getting paid in cash or free product for that opinion. Because then it is just an opinion, and not an advertisement.
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James,
I believe “the fuss” came on the tail of the “floggers” or fake bloggers on the Acai berry campaign. It was false advertising, misleading, and then customers had a hard time getting refunds I believe. You might research that whole bomb to get a better understanding of where this all originated – in regards to online advertising.Although many affiliate promotions are carried out via a blog, there are many of us who use static websites for the same purpose so I take it that this ruling would affect one and all, irrespective of what type of site one has.Right – the FTC guides apply to social media properties, web pages, blog posts, and even word-of-mouth referrals & marketing.
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I’m looking into & reviewing a resource for that now. I’ll keep you all posted as soon as I complete my analysis.
This comment was originally posted on ClickNewz! Internet Marketing Blog
OMG! Love the disclaimer Anita!
I’ve had a disclaimer on my blog for a long time, generated by a free service: http://nicoleonthenet.com/disclosure/ (sample) – I didn’t see anyone mention this free disclosure creator site yet, but may have missed it.
I’ll check with them to see if they’re current, but at this point something is better than nothing.*
(* I am not a lawyer, nor do I play one on TV. “Something is better than nothing” is my personal, uneducated opinion.)
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn,
I don’t know if you saw this or care to endorse it, but I was looking into Mike’s disclaimers here:
http://legalformsgenerator.com/affiliate-ebooks.html
Looks like a helpful option. I haven’t purchased it yet, but likely will soon.
N
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn – As always you are on it! Just as with the state sales tax issue earlier this year, you have a unique gift manifest in your ability to make complicated issues easy to understand provide guidance on the way forward. This issue will be interesting to watch as it relates to the that which was unintended – as often is the case when regulating business. I just hope no one goes overboard in their concern about the conduct of affiliate marketers.
My best advice as when playing in Google’s courtyard, play by the rules and stay off of the radar screen. It may require more work on your part, but it will b worth it!
I appreciate you!
James
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Storm in a tea cup if you ask me
This comment was originally posted on ClickNewz! Internet Marketing Blog
What’s not clear for me is the issue of healing services. I don’t sell products. My clients come to me for alternative healing. Where does that fall in the guidelines? And I also take people on spiritual journeys to sacred sites around the world. What happens to the testimonial they write for me about that? Is it endorsing a “product”? I’m confused. Thanks for any clarification you can give me.
This comment was originally posted on ClickNewz! Internet Marketing Blog
You should read the documents for yourself to get a full understanding of the updated guides that go into effect on Dec 1st. But regarding endorsements or testimonials, if they mention “results” and those results are “atypical” then those results need to be qualified.
But if they don’t mention results, and just talk about how much they enjoyed the experience, or their personal fulfillment (I am not familiar with your method so forgive me if I’m off base) then it’s no big deal. The FTC simply wants transparency regarding the way we frame our products and services.
I have another – hopefully more clear – post on the topic coming up soon so be sure to subscribe and keep an eye out for that.
This comment was originally posted on ClickNewz! Internet Marketing Blog
Lynn, thanks for keeping us informed of the developments in this issue, and for intelligently interpreting the FTC documents for us. I have to admit, I haven’t read the documents myself. Every Internet marketer should make time for that.
In fear, I’ve pasted disclosures on my sites and emails. I do worry still about a sales page where the headline consists of specific results a particular expert got from following her own strategies (the product is an interview of the expert).
The new FTC guidelines will certainly affect how we write copy and promote products/services. There are so many gray areas. I think it will take time and some real-life cases for us to fully grasp how to comply.
Lexi
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See my newest update, linked below as a pingback, and keep an eye out for my next post. The thing with atypical results is that they need to be current, accurate – and qualified. I’ll address that in detail in my next post.
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While this sure would cause transparency in blogger world but I do no think it would make much difference in overall way the business is conducted.
Sponsored covert endorsements continue to occupy major place in media and this would continue in blogger world.
Only the older ways would give rise to newer.
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I’m unclear on how these regulations are going to affect affiliate marketers from countries other than the US. How can the FTC guidelines have any “teeth” with an offender in, say, India?
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I am not sure on the details, Bruce, but it was said that the new FTC Guides affect all US advertising regardless of where the business is physically located. I imagine any type of traditional advertising has to follow the same guidelines, but it will be interesting to see how they enforce it with online marketing from companies outside the US.
This comment was originally posted on ClickNewz! Internet Marketing Blog
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I can’t believe these people!
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