Affiliate marketing has become increasingly popular over the last few years. If you are a merchant looking for an affiliate network to help you promote your products or services, or a blogger who wants to participate in affiliate marketing, and you want to know the legalities first, read on.
In the United States, the Federal Trade Commission (FTC) regulates the affiliate marketing industry.
Affiliate Disclosure
FTC requires advertisers and endorsers (bloggers, influencers, and publishers) to disclose their relationships when promoting or advertising any affiliate content, or receiving anything in exchange for their advertisement, like:
- Receiving payment or commission if a visitor uses their affiliate link.
- Receiving compensation or a product in exchange for posting something on their blog or social media account (sponsored content).
Affiliate marketers cannot opt-out of this because disclosure is required by law and is included on the Terms of Use of all affiliate networks and affiliate programs. Affiliate networks have the right to terminate the account of an affiliate marketer for noncompliance with the FTC regulations.
Affiliate marketers are required to make an affiliate disclosure, which is a statement that informs their followers about the affiliate links that are being used on their blog or any other platform.
This declaration lets their readers know that they have something to gain from recommending or promoting a certain product or brand, so their readers will be aware of what the affiliate’s intentions are. It is only ethical to let their readers know that when they buy something using the affiliate’s links, the affiliate will get a commission for that sale.
Why is there a need for an affiliate disclosure?
The FTC regulations protect consumers from testimonials, ads, and endorsements being deceptive or misleading and disclose any relationship that may have prompted a review or opinion. The rationale is to maintain transparency and promote honest and authentic experiences shared.
If you are an affiliate marketer and you are being paid in any form of compensation for the content you share and review that you write, that could have an impact on your judgment.
Since your posts or reviews are influencing other people’s buying decisions, it is just proper to be transparent and let them know about your monetary compensation. This way, your followers will have a full picture of your real relationship with the brand or product you are promoting. But don’t let the fear of losing followers stop you from the opportunity of making money through blogging. Honesty is a way of building your long-term credibility and relationships that are based on mutual trust.
FTC Endorsement Guidelines
The FTC mandates full disclosure of any material connection (relationship) that you may have with a merchant or advertiser when you endorse a product or service to your followers. In your case, the links to the product or brand you are endorsing are the material connection.
Every review, blog, directory, website, or email that carries an endorsement should prominently show a disclosure statement.
Three things that any affiliate marketer should be aware of and agree to so that they can comply with the FTC guidelines:
- That the affiliate marketer will, at all times, adhere to the FTC Endorsement Guidelines.
- That all content and communications from the affiliate marketer will reflect their honest opinions and experiences.
- That the affiliate marketer will disclose their relationship with the certain affiliate network or program when talking about the product or service, directly or indirectly.
FTC Guidelines for Best Practices
These 4Ps should be met when using affiliate links:
Prominence
The disclosure should be big enough for the readers to be able to read easily.
The disclosure statements should have the same size and font as the rest of your post.
Presentation
The disclosure should be simply worded for the readers to easily understand.
Save your highfalutin words and technical terminology for other content. Disclosures should be obvious and not hidden in a long paragraph and irrelevant text.
The statement can conspicuously begin with the word “Disclosure,” similar to what other blog sites or social media pages currently practice. In addition, most affiliates use colored text, with contrast with the background and the main text so that the statement is easily seen.
Placement
The statement should be next to the content that it relates to.
Don’t let the reader scroll the page to view the disclosure or don’t place another link just for the disclosure. Remember that consumers don’t usually make the effort to look at the bottom of the screen or page.
Proximity
The disclosure mustn’t be far from the prominent headline.
The disclosure on your blog post should indicate that you are getting a commission for the sales or clicks made through the links added to your post.
This is an example of a disclosure statement:
“When you click on the links to the different merchants on this website and you purchase something from their products or services, this website will earn a commission. Affiliate programs and affiliations include, but are not limited to, the Company A Network.”
Other forms of disclosure used for affiliate links in blogs, reviews, or social media posts are #ad, #affiliatelink, or #commissionlink. Variations for sponsored posts include #advertising and #sponsored. It is also important to mention that the post should include the sponsors’ names if the post is sponsored.
Basic Consumer Protection
Another important law affiliates should be aware of is the Federal Trade Commission Act, section 5, which is the basic protection statute. It states that it is unlawful to perform unfair and deceptive acts or practices that may affect commerce.
For example, making false claims about the product you are promoting is not allowed.
You cannot say, “This is the best microwave oven in the world,” which can come out deceptive, especially if your claim is not backed by scientific evidence. This is tantamount to false advertising.
Bottom Line
If you are just a beginner in affiliate marketing and you want to succeed in this industry, it is important that you don’t just prepare for strategies on how to promote certain products and services, but you should also learn the legal aspects.
“Affiliate marketing is an excellent opportunity if you truly believe in the value of the product you’re selling. Because many times, you can make money off of something you would probably recommend anyway.”
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