Affiliates – New FTC Rules and $11,000 Fines for Non-Disclosure
UPDATE 10/8: FTC BACKS DOWN – the $11,000 Fine is Not True!
I reported back in June that the FTC was planning to revise their “Guides Concerning the Use of Endorsements and Testimonials in Advertising” which address testimonials by consumers or celebrities, as well as the disclosure of material connections between advertisers and endorsers or reviewers.
Today the FTC released the revised guidelines which were approved 4-0. There are two primary areas covered and both affect affiliates who use testimonials or review and/or recommend products.
I’m especially concerned with the reviews and endorsements issue. The FTC does not state HOW disclosure needs to take place. Much of the wording focuses on bloggers, but they also mention “other word of mouth marketers” which certainly would include affiliates.
The new FTC Rules do not state when they go into effect, but some news reports I read say the guidelines go into effect December 1st.
TESTIMONIALS “Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.”
REVIEWS & ENDORSEMENTS “These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.”
Affiliates, Merchants and Networks need to read the full PDF here (the links above are just an overview) and make any adjustments accordingly.
So what impact do you think this has on affiliates??? Obviously if you do affiliate reviews you should disclose. But even a single affiliate link could be seen as an ‘endorsement’ of a product. Do you think affiliates need to disclose every affiliate link or what???
News Coverage:
FTC: Bloggers must disclose payments for reviews
FTC to Fine Bloggers up to $11,000 for Not Disclosing Payments
FTC Clamps Down On Ad Testimonials
FTC Toughens Endorsement Rules For Celebrities, Bloggers
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#1 FTC puts regulations on endorsements, testimonials wrote on Monday, October 5th, 2009:
[...] Some other bloggers have also been posting about this. You can check them out here: 5 Star Affiliate Blog [...]
#2 Beau wrote on Monday, October 5th, 2009:
The total lack of clarity in these guidelines is really aggravating. It would have been nice if they had included any idea of what they’re expecting in terms of disclosure, if they’re going to threaten to fine people.
For bloggers that don’t receive any monetary compensation, but just get sent free products to review without any strings attached, do you guys think it would be acceptable to just say, “Company X sent me a free copy of this widget to review?” That’s full disclosure, in my mind, especially if the review is written honestly. Do you think that’ll be enough for the FTC?
#3 Linda Buquet wrote on Monday, October 5th, 2009:
Hi Beau, thanks for commenting and I agree.
Yes, I would think what you wrote is sufficient disclosure, but the scary thing is, who knows what the FTC thinks since they don’t really spell it out.
#4 FTC BACKS DOWN – the $11,000 Fine is Not True! - 5 Star Affiliate Blogs wrote on Monday, October 5th, 2009:
[...] blogged about the new FTC Guidelines as soon as the story broke, but in case you don’t know the situation – it’s been [...]
#5 What Does New FTC Guidelines Really Mean For Bloggers and Affiliates? wrote on Monday, October 5th, 2009:
[...] From an affiliate perspective [...]
#6 website designer toronto wrote on Monday, October 5th, 2009:
It certainly says something about blogging as a profession to have these FTC guidelines.
Disclosure is so important, especially from those who blog. By its nature, blogging has a built in lifestyle/benefit element that marketers desire. A product that is promoted within the context of a blog boasts that real-life, tried-and-true testimonial that advertisers would pay mega bucks to achieve in print. Bloggers have a very powerful, dynamic mode of communication that can quickly persuade the unaware reader into thinking that s/he is receiving authentic commentary, not paid testimony.