The greatest threat to affiliate marketers with blogs is the Federal Trade Commission. The FTC’s “Endorsements and Testimonials in Advertising,” aka “The Guidelines,” now hold bloggers accountable for any statements they make that cannot be substantiated. If your blog says that the e-book you are selling on it will give readers the secrets to making millions of dollars placing simple ads on the web, you better be in a position to back up that statement according to the FTC. Unlike a civil disagreement with a blog reader, competing blogger, or other private party, attracting the attention of the FTC or and similar governmental authorities can result in steep fines. Particular focus is placed on those bloggers who are making these statements in a commercial atmosphere, in order to make a profit or sell a product.
While these FTC Guidelines are unlikely to make a difference to many bloggers who aren’t selling or promoting anything, it will have a huge impact on marketers who manipulate statistics, use false testimonials, and generally play fast and loose with exaggeration or lies in the interests of hawking their own or affiliate products. If you own a blog that’s sole purpose is to sell products, expect to be held to the FTC’s standards, and face severe penalties if an FTC investigation finds that you haven’t met their standards. The new rule will also come as bad news to those companies who’ve invested billions into crowdsourcing false personal word-of-mouth on blogs and other social media platforms throughout the Internet. Typically these companies supply select bloggers with insider information and access prior to a new product’s launch and take great pains to hide their relationship with this “regular person” blogger that just happens to love their products, and is being compensated for doing so.
Aaron Kelly Arizona Attorney says that the revised FTC Guides also usher in a new era of transparency with regards to the monetary recompense and other percs companies offer bloggers in exchange for glowing write-ups. The Guides do not ban such endorsements altogether; they simply require full disclosure. This ruling is likely to have its biggest affect on affiliate marketers: not only must affiliate marketers now divulge they’re getting compensated to review a product, they can no longer claim to use a product – unless, of course, they actually do.
Many bloggers see this as an encroachment on their First Amendment rights. It is one thing to impose ethical practices on advertising; another thing entirely to monitor editorial content. Maybe the blog language you are using to sell a product truly reflects your true feelings about the product, but the fact that you are making money from doing so is going to subject you to the disclosure requirements. Most media outlets have internal policies in place that prevent their employees from accepting freebies, but then most media outlets can afford to buy the products their writers review. The blogger who runs a book review site may depend on the kindness of publishers – and if that kindness is rewarded with a smile, he or she will argue, who’s to say that anything wrong has been done? In the eyes of the FTC, a wrong has been committed when that blogger doesn’t reveal that they are being rewarded by that publisher.
So the big question becomes, what if you have a promotional blog that either doesn’t reveal your connections to the products promoted on it, or has inaccurate information on it? Realistically, it is unlikely that the FTC has manpower sufficient to monitor every weblog that publishes product information and reviews for evidence that money has changed hands. The blog owners that are going to have the greatest risk are those that advertise their blogs the most (especially via paid advertisements to drive new users to the site) and those that have the most far-reaching claims and no disclosure. While the potential fine for failure to comply with the disclosure requirement is $11,000 , in most cases the worst that will happen to the overly aggressive blogger is a warning followed by cease and desist order. If you want to avoid the majority of headaches from the FTC’s new guidelines, you should add some suitable “disclosures”. Does your website receive affiliate commissions for referring visitors to another site to purchase products? Then include language on the site that this blog may receive compensation for referring visitors to other websites. Does your blog promote your own product with the use of testimonials that you paid for? Then mention that statements may be from users who have been compensated for their positive recommendation. While no clear rules exists as to exactly how much disclosure is necessary to avoid unwanted FTC inquiries, you should always include some disclosures to give yourself some protections. The operators of “flogs”, a recently popular method of using blogs to drive sales of third-party products, face some additional risks that will be discussed later in this chapter. You could also hire Aaron Kelly Law to review these for you.