The FTC and Affiliate Disclosure

by Scott Jangro on October 6, 2009


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On October 5, 2009 the FTC announced an update to their guides governing endorsements and testimonials in advertising. The last time they updated these guidelines was in 1980. A lot has changed in the world since then. The guidelines will go into effect on December 1st, 2009.

The press coverage is focusing almost entirely on the blogging community but in reality this covers any website that may publish word of mouth marketing.

You should read the FTC announcement and guidelines directly and get educated. There are also many bloggers posts explaining in detail their interpretation. Links to some resources at the end.

But in short, to me, it seems pretty clear that if you are publishing anything that can be construed as an endorsement about a product or service, and you have any material relationship with the advertiser (the provider of that product or service), you should disclose that relationship.

In the case of affiliate marketers the material relationship is pretty well defined. Much more so than in many of the examples the FTC gives, like receiving free product. If you are in the affiliate program of an advertiser, there is an undeniable material relationship.

An important question is, what is an endorsement?

Does the content have to be in the “voice” of a person who might be endorsing a product? Where is the line drawn between an endorsement and a clear advertisement?

And what if the content isn’t actually promoting or recommending a product? Perhaps the article merely mentions a product with no bias one way or the other (there are LOTS of affiliate sites like this). Or what if the article is actually a negative review of the product?

Annother important distinction is that the author of the content is not necessarily the owner of the website. This brings to mind many scenarios that fall into potential gray areas.

For example, what if the content provided by the website is user generated and the website owner, either manually or automatically, converts that post to an affiliate link?

When it comes down to it, why not disclose?

This brings to bear the final question. What’s reasonable disclosure?

I’ve had a disclosure in place on jangro.com for many months now which I link to in the top navigation. However, I’m not sure that it is enough. I probably need to put something more direct on each post that has an affiliate link in it and direct people to that disclosure.

A friend of mine, Tim Carter of AskTheBuilder.com has quickly pulled together a great solution. He created a page similar to mine, though I do like the language he uses. He doesn’t apologize or act at all defensive about his “material relationships”. In fact he states it proudly. And why shouldn’t he? How could any consumer react negatively to that?

These guidelines go into effect on December 1st, 2009. Start thinking about how this impacts you.

More information:

  • Wondering if anyone knows how this affects blogs/websites from other countries. I'm a Canadian resident but promote US based affiliate programs.

    I don't mind the whole disclosure thing and believe that if there is integrity in your marketing then why not disclose. Just wondering how far reaching the FTC's grasp is.
  • It's a fine line that major information sources walk here, because I agree with you that overreaction is a problem. However, no reaction gives off the impression of being disconnected.

    Personally, I've noticed that no matter what I write on this subject, the READERS are generally overreacting and only seeing the negative side. This is definitely a problem and one that makes me choose my own words even more carefully. It seems as soon as anyone sees the words "FTC" and "regulation" in one sentence they immediately start complaining. :) My own blog is an example of that and I'm going to try to be even more careful in the future when dealing with regulatory or legal issues to try to keep a level of calm.
  • You are right education is important. I just read your Disclosure tab and I think something like that is fine. We will see what else develops or if that is enough. Thanks for sharing this!
  • John Powell
    I got an email from an AM today that is probably the foretelling of a flood of TOS changes requiring some form of disclosure. That's how I found this post. I'm going to get one up similar to Privacy Policy and be done with it.

    Being open and honest about what we are about can only lead to more credibility in my view, and besides most folks won't even read it. :)

    I looked at the AskTheBuilder Disclosure, but I couldn't actually find where he was using it.
  • "That in and of itself tells me that affiliate model isn’t really on their radar."

    Yep, the word affiliate isn't even in that 81 page pdf.

    I remember when this was first brought up 3 years ago, you had a blog post about it then - http://www.jangro.com/affiliate-marketing/the-end-of-affiliate-marketing-xxxiv/

    And I know they're aware of affiliate marketing because they've written about it in the past:

    FTC Approves Affiliate Marketing Rule Regarding Use of Consumer Information

    http://www.ftc.gov/opa/2007/10/affiliate.shtm

    among other things like that. So I think if they had affiliate marketing in mind with this, they would have mentioned it. I understand people wanting clarification, completely understandable but I don't see anything coming out of it affecting affiliates. At worst, like I said 3 years ago, a disclosure page somewhere on your site that nobody will ever read.
  • Jonathan (Trust)
    A lot of the questions asked here and elsewhere have answers with examples in the FTC guide - http://www.ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf

    And they said they're more likely to go after advertisers, not bloggers, and those advertisers that use deceptive practices. They want the big fish, not your basic blog or site with affiliate links.
  • I did read all the examples in the guide before writing this and they don't cover nearly enough to answer these and other questions. We'll need more clarification from the FTC, especially over affiliate relationships. I admit I read through it quickly looking for pertinent stuff, but I don't think they once had an example of anything that resembled an affiliate relationship. That in and of itself tells me that affiliate model isn't really on their radar.

    I agree, they're going after the big fish and that the rest of us who aren't doing anything malicious or even misleading will go on without incident.

    Except... if merchants, networks, industry luminaries, etc., overreact and start causing problems where there weren't any. That, to me, may very well be the biggest risk. But that's for another post.
  • I love Tim's disclosure. Good place to start.

    Another question is: how do you fit a proper disclosure into a 140-characters tweet?
  • Scott, are you feeling like this issue might share a gene with the ongoing sales tax dilemma where technological and logistical developments have outpaced the legal system's ability to deal? With both issues there seems to be a mismatch between what the law thinks it wants to do and what's actually possible or practical.
  • Hi Jeff.

    I don't know, I feel like these are two very different things. I do believe that the FTC has the best interest of the consumer in mind, and I personally don't even mind this move. Implementation, definition, and enforcement are the wildcards.

    The state legislation on the other-hand is a bunch of misquided, desperate legislators grubbing for money in the wrong places.
  • Hi Scott: I agree entirely that the motivations are different; the tax issue is do doubt about legislators scrambling for money and the FTC is certainly out to protect consumers. My observation was that technology has changed so dramatically and so quickly that it has left the states and FTC in what appears to be a cloud of virtual dust. In both cases, it's a mighty challenge to figure out what's fair, practical, and enforceable.
  • Sorry Jeff I mis-read you.

    When you consider that the endorsement guidelines were last updated before the PC even existed, it's remarkable that it has served for so long.

    You're right though, there's no way the FTC is going to go after the average blogger because they post about a book and link to Amazon's Associate program. It's just not worth their time and effort, if even possible. I'd also be amazed if the Advertising Tax States have managed to go after any merchants in any quantity.

    The FTC will save it for the big marketers who are blatantly misleading consumers. There's enough of them to keep their lawyers busy for a good long time without my having to worry much about my "Fix your DLP TV" post on Jangro.com (though I do disclose).
  • Thanks for raising these questions. I myself have been wondering the same thing as what this means for affiliates. Thankfully, we have a month or two to figure it all out.

    Oh and @JustinBrooke sent me ;-)
  • Thanks for the comment mike. Hopefully we can get some answers to these questions soon. I know that organizations like the Performance Marketing Alliance will be working to gain clarification. (speaking of disclosure: I'm on the board.)
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