New FTC Guidelines-The Keyword is Disclosure

Sat, Nov 21, 2009

Affiliate Programs, Link Management, Newbies Starting Out, Website Promotion, Work From Home


The FTC (Federal Trade Commission) a US federal government independent agency has recently made changes to the policies governing the Use of Endorsements and Testimonials in Advertising. This change is going to be effective Dec 1, 2009, so are you all geared up for this change and decided what are some of the blogging actions you will be taking?

I figured we have to understand just what this means to us bloggers and what actions we should take. I don’t speak for the rest of the blogging fraternity but personally I don’t like to be associated with FTC, Law, fines (yes $11,000) and most of all we certainly don’t want FTC to be behind our backs, when we’ve got enough of our business to handle.

So what does FTC New Guidelines say:

You can read the FTC document here but I thought I summarize what I think it means in a nutshell:

FTC requires and expects that bloggers who make an endorsement and receive either cash or payment in kind to disclose the material connections they share with the seller of the product or service.

What bloggers should be aware of

1. This means if you have accepted a sponsored post and get paid for it to do a favorable review, you will be subject to disclosure, not something you would normally do in the past. Also getting paid for it is not necessarily for cash but other free stuff that may benefit the blogger, his blog or his online business.

2. There is no real law binding this new guideline affecting bloggers which is a good thing. In the event that FTC does find any of your posts may have violated this new revised guideline, it will not fine you let alone $11,000 as previously thought so. Instead it then owns the burden of proving your guilt - of violating the FTC Act. But I don’t think you want it to come to this far, this possibility, right?

3. The original $11,000 fine for non-compliance that we have been hearing is not true as confirmed by FTC. In the worst case scenario, when a non-compliance is discovered, FTC will issue a warning to the blogger. However if your product is proved to have serious defects, it may be a different story to tell. I guess this means bloggers now have to be more careful with what products to promote or which merchants he partners with. You could say promoting freely in Internet has taken a whole new meaning now.

So how should you disclose

Unfortunately there is no clear definition provided by FTC how you should go about in your disclosure. I guess this means that each time you used a testimonial or other endorsement on your blog, you will have to reveal just what the average results actually are. In short, disclose and be compliant with FTC.

But it may be difficult to disclose what are the average results obtained for your product even if you wanted to. Well come Dec 1 don’t be surprised to see many websites or blog posts with such disclaimers like “the average person made 1 cent” or other similar ridiculous ones. It’s pathetic what this may be leading to but my bet is as good as anyone’s. Wanna bet? :-)

Affiliate Links-Start to disclose

I know many bloggers don’t like to reveal which links are affiliate links on their website or blog post. Well the new FTC rule doesn’t give you a choice as it requires that you do so now from Dec 1. But you could see the positive side of things and use such disclosures to your benefit. If you truly believe in the product and the value it brings to people, putting a disclosure somehow gives your recommendation even more weight. You are seen to be both honest and truthful. Then again it depends on how your customers or prospects see you and if they trust you. So I guess building trust in them now has an added value.

In Conclusion

I really think the new FTC guidelines that are officially enforceable in 10 days time is not such a big thing as it sounded when it first got mentioned a couple of months ago. We ought to support it’s worthy cause which probably includes protecting the average consumer against fraudulent or unfair business practices. This change probably was meant to target the real advertisers, we bloggers just happen to get caught in the line of fire.

For Reading:

New FTC Guidelines for Internet Marketers

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Peter Lee - who has written 190 posts on Work From Home Business Blog. A Legitimate Home Internet Business researching work at home ideas this blog was started by yours truly, a banker by day and a home business owner by night helping others start and grow their business, finding new ways to make money online. Read More About Me

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  • I am definitely not looking forward to disclosing affiliate links and possible compensation. I've seen a few suggestions on how one could do it but it still feels like these new regulations are going to make things more complicated than they should be.

    A possible upside to new regulations is some dishonest and unethical affiliates may be scared away from the business.
  • @ Marie @ Affilorama Premium: Yeah I understand how you feel. It probably will take some getting used to the change. But I think once the dust settles and everyone is so used to seeing such disclosures, things would be like before.Thanks for dropping by.
  • jvdeen
    I'm not sure about how you go about disclosing average results for any product. If it's a make money product, that means you need to find out what benefit your customers have had, round it out and put it up? those would be one of the easier ones..What about something that talks about being happier or helping someone get more organized? How do you disclose things that can't really be quantified for the most part?

    Am I getting it right? I'm not sure if I'm perhaps misinterpreting what needs disclosure
  • @jvdeen:Yeah that's the trouble when everything is so vague. Perhaps the disclosure should include the worst case scenario, the extreme end of the benefit the product would give.
  • I've started adding a 'Disclosure' section in the standard disclaimer i have on my sites. I have no idea if it's enough. Reading through the PDF from the FTC was a nightmare.
  • @ Jim Saunders: I'm not sure if that is sufficient too. I had thought that we have to put the disclosure on that particular post/page that is concerned and not as a general disclosure. That was the whole intent of the change I think because you already had the general disclosure(disclaimer) in the past.
  • I will not be doing anything else though. If it really becomes an issue I'll stop the sites from being accessible in the US but I doubt that will be necessary. I doubt a little fish like me will ever be noticed ;-)
  • I'm not a huge fan of these new guidelines. The purpose is to protect the consumers, but it's not going to do any good. It's only going to make things harder for affiliate marketers to conduct business. Scammers will still be everywhere.

    I agree with Jim, I'm not going to change what I'm doing other than maybe disclose if I'm getting paid for a review and possible state what links are affiliate links. I doubt I'll ever get big enough for them to even notice me.
  • this news somewhat freaks me out. What if you said something that they don't want to hear, are there any penalties or any punishments?
  • A possible upside to new regulations is some dishonest and unethical affiliates may be scared away from the business.
  • I don't think it's going to get noticed anyway.
  • Well, this is only a barrier to bloggers and advertisers too. However, blogging for cash must follow if you are located in USA
  • It seems like affiliate marketing really competes with pay per click models. After all, affiliate links are like paid links in a way. And we know certain search engines were cracking down on paid links. This country needs to innovate, not use lobbyists and bureaucrats to gain power. I'm disappointed after watching internet regulation hearings. Its so obvious they coach victims on what to say at these hearings and line the panel with professors who will serve their agenda.
  • Well.. these are the fully proofed parameters, the bloggers must have to be aware of.. Really these skills and these terms, one must have to be aware of and must be careful enough while blogging.. The tips are most beneficial even..
  • oh, how about the affiliates? will this stop their business?
  • This will never stop the affiliates. I am talking about the big guys. The guys with the American Express Black Card. I am friends with one of those. This is his life and and his business. This might scare the ordinary folk like me that makes $200 a month from CPA. But a heavy hitter that sells 100k a month NO WAY!
  • It will definitely hurt affiliate sales. It's been tested! When a person knows the link is an affiliate link, the conversion rate drops. Trends show that people trust advertising less and less.
  • wow where did you find the post photo?????
  • I read about this also on the shoemoney blog. Seems like everything is ok as long as you have the terms somewhere on the page. If they tighten the rule they are going to have to go after other industries too. I think the FTC has to go after companies that make it hard to withdraw from the currently payment plan easily. From what I read is once you sign up for a subscription for these websites its almost impossible to cancel the subscription.
  • Yeah, this should be a major concern for all of us. It's always scary when new rules and regulations come out with clear consequences but without clear guidelines as far as how to avoid the consequences!? It's like they want you to get in trouble.

    I'm staying tuned to as many sources as possible to try to figure out what measures are adequate.
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