The affiliate marketing, the way we know it, is illegal. Unless you make some changes to your affiliate marketing promotions, you might have to pay $11,000 to the FTC. I will explain why in a second…
“Since when,” you might ask.
Since October 5, 2009 when US Federal Trade Commission changed some of their guidelines related to affiliate marketing.
Quick summary: bloggers who endorse products must disclose any financial benefits they receive for doing so. The violators will pay $11,000 per violation.
See Full Version: New Rules For Bloggers And Affiliate Marketers
I didn’t get a call from FTC notifying me about this. Rather, Ray Edwards, an exceptional Internet marketer and brilliant copywriter wrote about this on his blog, which I was lucky to be following.
His Post: FTC Kills Affiliate Marketing?
By the way, if you’re interested in learning about copywriting, Internet marketing, product launches, and how to make your business more profitable in an economic environment — go to Ray’s blog and subscribe for his updates.
The problem with affiliate marketing:
I thought there was a problem with current affiliate marketing due to the increasing number of fake blogs, also known as flogs, and many other tricks and tactics that the affiliate marketers are using online nowadays.
However, there seems to be no problem with the current of affiliate marketing tactics from FTC’s prospective. FTC, simply haven’t changed any thinking their guidelines concerning the food marketing since 1980s. They are just trying to update the rules according to the online environment we have right now. Back then, we obviously didn’t have the today’s food marketing.
How do I know this?
Since I have several blogs and websites that promote affiliate products, I was intrigued by this change and want to know more about it. I simply wanted to know what I can do and what I can not, so that I can apply it to my past and future promotions in order to avoid any problems with FTC.
I simply called the FTC office and talk to the person in charge of the Bureau of Consumer Protection to clarify some points.
What else did I clarify?
The current changes will have an effect starting sometime December 2009. Although, they give some time to the affiliate marketers, bloggers, etc. to adjust to the changes in the guidelines. Plus, they need some time too. So, it is safe to say that if you change whatever you’re doing to comply with the current rules by the beginning of 2010, you will be fine.
To avoid any problems, simply be transparent and explicitly inform your audience whenever you are promoting something.
Mention that you (might/will) make a (commission/money) (if/when) someone buys the product you’re promoting.
There is nothing wrong with recommending a product or service as long as you tell that you are making money by promoting the product or get a commission if they buy it.
Q: What if I have banners on my website (blog) promoting other people’s products or services?
A: Banners are fine because your visitors already know that you make money by putting that advertisement on your website. It is very similar to Google Adsense Ads… he wouldn’t tell people that you are making money from the ads because it is kind of common sense online.
Q: Can I just have a paragraph disclosing this in my terms of services, disclaimers and other legal documents that are linked at the bottom of my website?
A: No. The FTC wants to see you explicitly telling about your potential earnings in case of a purchase right next to your promotion… or in the promotion itself.
Of course, you should consult a (lawyer/legal professional) about the things that I’ve talked in this blog post, but this is what I found out when talking to the person at the FTC office.
JUST REMEMBER: Transparency is the best policy.
Update: Here is Dave Taylor’s take on explaining this “brouhaha” – Worried about the FTC going after your blog?
He is currently attending the 2009 Blogworld Expo, so he would have more information about this.
