How to Word Disclosures & Agreements to Meet FTC Rules « Affiliate Marketing Blog by Geno Prussakov

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Over the past four days I have been receiving numerous emails from merchants and affiliates, asking how to word their texts to meet the new Federal Trade Commission rules for testimonials, reviews and endorsements.

Affiliates wonder how to put together disclosures:

As a publisher, is there generic type of blurb that I could add to my website that would cover me for the FTC guidelines you were talking about.

…while merchants want to know how to phrase their affiliate program agreements:

What do we need to do?  Your help and guidance is appreciated.

Affiliates, several good examples of disclosure policies have been posted over the past few days. Below I am listing the ones that I have found to be especially well-put-together. They may provide a good starting point for crafting your own policy:

Per FTC’s recent interview, affiliates are not expected to include the disclosure on every page of their website. “Whether you make it outside of the text but in proximity to blog, or incorporate it into the blog discussion itself — those are the issues that bloggers will have discretion about” [source]. So a dedicated Disclosure Policy page visible from every page of the website should suffice.

Affiliate program managers and advertisers/merchants, on the other hand, may use the following text I have put together, making it a sub-clause of an Affiliate Obligations clause in their programs’ Terms of Service:

We strongly advise affiliates to stay compliant with the Federal Trade Commission (FTC) guidelines on testimonials and endorsements. All endorsements, reviews, testimonials on CompanyName.com’s products and services, as well as relationships between other types of content websites (forums, blogs, microblogs and other  Social Media channels) and CompanyName must be clearly disclosed in a separate policy on the affiliate sites. FTC points out that “when there exists a connection between the endorser and the seller of the advertised product” it is imperative that such connection is “fully disclosed”. FTC deems the relationship in an endorser-sponsor light, and believes that the end user has the right to understand that one exists [full text here]. We share the undergirding idea of this approach, and strongly encourage our affiliates to adhere to the FTC’s rules. We also reserve the right to terminate relationship with any non-compliant affiliates.

As always, I am open to comments and criticisms.

About Geno Prussakov

CEO & Founder of AM Navigator – an award-winning OPM agency. Founder & Chair of Affiliate Management Days conference. Author of bestselling "A Practical Guide to Affiliate Marketing" (2007) and "Affiliate Program Management: An Hour a Day" (2011), speaker, consultant, and affiliate marketing evangelist.

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11 Responses to “How to Word Disclosures & Agreements to Meet FTC Rules”

  1. Cory Howell says:

    This is a great breakdown for not only the affiliate, but also the advertiser and/or original merchants.

    The need for a disclosure statement on an affiliate site is really a no-brainer – yes, you need to have one.

    The eye opening part, is that as a merchant or advertiser, you should have a disclaimer in your Terms of Service to prevent possible liability from your affiliates or partners (in case they mess up).

    All of this is still pretty new, so hopefully the FTC will actually come out and specify what each party is required to show as proper disclosure. At this time, it seems to be more of a guessing game.

  2. Geno says:

    Cory, thank you for your comment.

    Yes, both the affiliate/publisher and the merchant/advertiser want to (or is must really a better verb?) have the disclosures/disclaimers. The affiliate – for the end users, while the merchant – for the affiliates.

    While there is some vagueness regarding the acceptable form to put it in (much is left by the FTC to the marketers’ discretion), I think the bigger problem is not this, but the monitoring/policing part. The burden of monitoring whether all affiliates who post reviews/testimonials have a proper disclosure on their site(s) has been put on the advertisers’ shoulders. One of the merchant’s wrote to me today: “We support compliance although this is going to be near impossible to monitor.” I have a few ideas of how this may be implemented, but none are comprehensive enough; and I believe she is right — it will be between difficult to impossible to monitor this effectively. Still thinking.

  3. I’m amazed that my disclosure is a good example – it was just written with common sense and by the seat of my pants (after the disclosure.org part, that is). Good to know it’s not rocket science!

  4. Geno says:

    No, it definitely is not rocket science. I believe that as long as the affiliate is sincere and clear, he/she should be okay in the FTC’s eyes.

  5. Cory Howell says:

    Geno, as you & one of your merchant’s said, “We support compliance although this is going to be near impossible to monitor.”

    I do not see how a company can be expected to:
    a) Find
    b) Follow
    c) Moderate
    d) Control
    a 3rd party to ensure proper disclosure – both time & monetarily (budgets don’t allow for a “brand hunter” position at most companies).

    What if a webmaster can’t be contacted or there is no other way to severe an affiliate partner? Just way too many risks and opportunities to get into trouble.

  6. Geno says:

    I think the only way the policing/monitoring could work effectively is if there is an industry-wide standard/wording for the affiliate disclosure. Then content websites that have a merchant’s name/link(s) could be spidered to verify if the standard-worded disclosure is in place.

  7. [...] According to the FTC, “The disclosure should be clear, conspicuous and aiming to “alert the reader” that there is a “connection between the endorser and the seller.”  I also found great disclosure advice on Geno Prussakov’s affiliate marketing blog. [...]

  8. R.J. says:

    As Geno said, an industry-wide disclosure/privacy policing should be written by the merchants for the affiliates (a one size fits all approach) with a spider to monitor compliance. Some affiliate networks already require this for each publisher(so it’s nothing new just more clarified).

  9. Tony says:

    I know i am coming into this conversation late, but do these guidelines you think have anything to do with paid links, natural or tracked? If it’s not an “endorsement” does any of that apply?

    Any feedback of course is appreciated

    • Geno says:

      Good question, Tony, and I believe paid links are definitely included as well. In affiliate links many aren’t “endorsements” as such either. It’s just the work the FTC chose to use for any “sponsored” ad (testimonial, endorsement, or just plain direct link, for which you’re compensated or have already been compensated).

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