New FTC Regulations Take Effect December 1 for Affiliate Marketers

Posted by Marty Dickinson on Nov 8, 2009

I can’t say it better myself than this article about how the
new FTC regulation will impact affiliate marketers everywhere. If you’ve heard about the changes but they just didn’t make sense to you, check it out.

Personally, I believe the FTC will go after the heavyweights making false claims. But, then, the other part of me figures they will go after some small time affiliate marketer and fine them like $50K just to make an example out of them.

Although it sucks, hey, this is America. And, the FTC staff are not marketers. They’re made up of salaried employees who HATE the fact that entrepreneurs make money by referring valuable products to others. Next, they’ll have door-to-door vacuum cleaner sales people giving their prospects a written disclosure of how much commission they will make on the sale before the sale is made.

I don’t know about you, but my dad taught me to never ask someone how much money they made for a living. And, therefore, I don’t talk about it myself. I mean, who cares? Why would it be important for people to know that you’re getting a commission payment for a referral?

And, why would anyone be against that? I mean, I have gone through days and sometimes months of evaluation and use of a product before recommending it to clients for use in their own business. Isn’t that time worth something? Don’t I deserve some sort of compensation if I’m going to save someone a thousand dollars next month?

The FTC doesn’t think so apparently.

My answer to this thing that so many are talking about that “will take down affiliate marketing as we know it” is simple.

1. Go ahead and post your earnings or whatever makes you comfortable that you are meeting FTC requirements.

2. Offer something in addition when someone buys the product through your affiliate link. I’ve been doing this for years. When someone subscribes to 1ShoppingCartFree.com where I get a commission every month or to BestEmailSystem.com for managing your newsletters and eblasts, I give a free document featuring a page full of tactics and strategies to use that not even those companies will tell you about.

3. Use the products yourself so that your referrals are genuine.

I find it interesting too that the FTC is targeting “bloggers.” Anyone that’s anyone online these days know that blogs are websites and websites can certainly be blogs. My main company at HereNextYear.com has produced dozens of new or re-designed websites for clients that look like “websites” but use blog software.

So, are the “blogs” or “websites?”

Will the FTC come after them just because they have blogs attached? According to the regulations, it appears they don’t care about main websites…just blogs. So, fine, disguise your blog as a website and enjoy the CMS benefit of your blog software and you’re safe.

I dunno, I just think the FTC has gone too far with this one. But, fine, I will conform but will beat them at their own game by making MORE affiliate recommendations and offering more bonus tips and getting even more affiliate sales as a result.

That oughta really get ‘em going!

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The way I understood it, is you have to disclose your compensation for the item. You don’t necessarily have to post that your earned $x amount, but that you are being paid for this and that is for something you are not acting independently on.

Lets say I had a copy of your new book and posted a review about it, and included an affiliate link to the book on amazon. Since the review is independent do I still have to disclose it? The way I read it, no you don’t.

Now if you sent me a copy of the book asking me to review it, I would (and should) disclose that relationship. There is a level of bias expected to come from a product review when a company sends you their product to “try” and this is trying to combat that. If you are being paid to post about something shouldn’t your readers know that you are being swayed one way right from the start?

November 8th, 2009 | 8:35 pm

True Jeff, very true. However, I’ve heard enough stories about the FTC going after people outside “the perfect model” of their regulations to set an example. Probably as likely as winning the lotto, but let’s hope we’re not the ones to be made an example of.

November 18th, 2009 | 9:01 pm

Indee Robert and thank for the comment. First you’d have to find a lawyer that understands affiliate marketing. And from those I’ve been talking to lately, they don’t have a clue. So, they’ll make twice as much in billable time because we will be “teaching them” how to defend us. Maybe there’s a seminar in there somewhere for lawyers!

November 18th, 2009 | 9:03 pm

This is crazy! I do makeup tutorials and hair tutorials. It takes a lot of material. Some doesn’t even have a name brand. This is an outrage! I understand if this was for reviews about certain materials, but this is for everything in the video or statement. I am extremly outrage by this! Also, it’s not very well advertised. If it wasn’t for someone I subscribed to, I would have never know!

November 28th, 2009 | 12:28 am

Personally, I don’t consider a regulation that requires clear disclosure of an incentivized relationship to be a problem, merely a matter of requiring reasonable honesty and transparency. However, since the rule doesn’t seem to affect marketers who did not receive review products for free, my guess is that most will not be affected.

November 30th, 2009 | 12:04 am

Great point Tantalus. If you haven’t listened in on where Jim Edwards interviews the FTC about this, it’s a must-listen to, and may very well have you a bit more nervous in once sense and relaxed in another. The main point I took away from the video was that there are many sites that are way “over the line” as the FTC guy put it. And, a lot of sites that are way below the line. One doesn’t have to worry at all…the other needs to clean up their act quickly. If you’re in the middle, it sounds like they won’t have the time or the resources to go after you anyway. So, I think if we cover the basics, we’ll be good.

November 30th, 2009 | 4:36 pm

Good point Chichi about that “if it wasn’t for someone I subscribed to, I would’ve never known.” Wonder if the ftc has considered that. I’m sure there are lots of people with websites that simply have not heard there is an ftc ruling about anything.

November 30th, 2009 | 4:37 pm

What about those of us who reside outside of the US? Is the FTC going to come track me down and extradite me from South America because I don’t have a disclaimer on my Squidoo page? While I appreciate the intention of the regulations – to protect consumers – I feel the FTC has bitten off more than it can chew with this one.

December 1st, 2009 | 9:54 pm
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