The FTC Update – In Plain English

Earlier this year there was an uproar surrounding the news that the FTC was proposing regulations on Social Media Marketing. Last week the FTC published the final guides, which govern endorsements and testimonials and specifically addresses online advertisers and bloggers. You'll find the official notice here:

http://www.ftc.gov/opa/2009/10/endortest.shtm

The question everyone is asking is just how far this will trickle down – and how this will ultimately affect bloggers, online advertisers, affiliates, and even the unsolicited & unendorsed opinions and comments that are posted across discussion forums and social media sites every single day… source

What the FTC Guidelines Actually Say - And What It Means (To YOU)
In Plain English...

The first issue in the official notice (3rd paragraph) addresses Personal Experience & Results. Up to this point you were allowed to use atypical or exceptional results in testimonials and endorsements, as long as you included a simple disclaimer such as "results not typical" or "results may vary".

With the new guidelines you must also clearly disclose typical results, or what consumers can generally expect.

Basically if you write or use a testimonial or endorsement, you need to tell people that the result is not average - and you also need to tell them what the average results are.

The second issue (4th paragraph) addresses any material connection between advertisers and endorsers, meaning payment and/or free products. You must disclose any compensation you receive when endorsing or promoting a product/service.

These material connections are defined as "connections that consumers would not expect" and insinuate that your opinion of that product may be biased due to your compensation. Also that your opinion may carry less weight in the eyes of your readers due to that connection.

In addition to the official notice, there is a PDF File of the Guides Concerning the Use of Endorsements and Testimonials in Advertising. It defines endorsements and testimonials on the first page:

(b) For purposes of this part, an endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser. The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.

(c) The Commission intends to treat endorsements and testimonials identically in the context of its enforcement of the Federal Trade Commission Act and for purposes of this part. The term endorsements is therefore generally used hereinafter to cover both terms and situations.

There are 8 individual examples on pages 2 and 3 of the PDF File that define exactly what is and what is not considered an endorsement.

In these examples it seems clear that the definition relies on whether consumers may believe your opinion to be unbiased, versus seeing you as just being a spokesperson for that merchant. If they may believe your opinion or endorsement is true and based on your personal experience, you are required to disclose any relationship or compensation with the merchant.

Example 8 is particularly interesting (and potentially confusing):

Example 8: A consumer who regularly purchases a particular brand of dog food decides one day to purchase a new, more expensive brand made by the same manufacturer. She writes in her personal blog that the change in diet has made her dog’s fur noticeably softer and shinier, and that in her opinion, the new food definitely is worth the extra money. This posting would not be deemed an endorsement under the Guides.

Assume that rather than purchase the dog food with her own money, the consumer gets it for free because the store routinely tracks her purchases and its computer has generated a coupon for a free trial bag of this new brand. Again, her posting would not be deemed an endorsement under the Guides.

Assume now that the consumer joins a network marketing program under which she periodically receives various products about which she can write reviews if she wants to do so. If she receives a free bag of the new dog food through this program, her positive review would be considered an endorsement under the Guides.

The obvious conclusion being that there are no regulations or requirements if you want to share or blog about your personal opinions or your personal results with products - as long as you don't have a professional relationship or compensation arrangement with the merchant. If you do have a relationship or arrangement with the merchant, your opinions are considered an endorsement.

Another interesting consideration is found on Page 3:

An advertiser may use an endorsement of an expert or celebrity only so long as it has good reason to believe that the endorser continues to subscribe to the views presented.

This puts the responsibility on the merchant not to use outdated testimonials that may or may not still be true. This is especially important when the merchant updates or alters the product, or when competitors update or alter their products (which may mean the original endorser has since found a 'better' solution):

(c) When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product. [See § 255.1(b) regarding the “good reason to believe” requirement.]

There are 5 more examples of very specific instances of this on Page 4 of the PDF document. The 5th example is of particular interest to bloggers:

Example 5: A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs.

The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition.

The advertiser is subject to liability for misleading or unsubstantiated representations made through the blogger’s endorsement. The blogger also is subject to liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously being paid for her services. [See § 255.5.]

In this example the blogger is required to disclose her relationship with the merchant, meaning the compensation received for her opinion, and also that her results are not typical but rather personal experience.

The blogger should also NOT recommend this product for others with that condition, as her claim (ie her personal experience) is scientifically unsubstantiated - meaning there is not adequate research to support such claims.

Without this disclaimer, readers will believe her experience as truth, and the company and blogger are both liable for lack of same results by other users (ie misleading consumers).

From Page 5 of the PDF Document:

the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.

In another example on Page 7 we see that the objective here is that opinions, endorsements, relationship and compensation are viewed in an accurate light - that they are either understood or fully disclosed:

Example 7: An advertisement for a recently released motion picture shows three individuals coming out of a theater, each of whom gives a positive statement about the movie. These individuals are actual consumers expressing their personal views about the movie.

The advertiser does not need to have substantiation that their views are representative of the opinions that most consumers will have about the movie. Because the consumers’ statements would be understood to be the subjective opinions of only three people, this advertisement is not likely to convey a typicality message.

If the motion picture studio had approached these individuals outside the theater and offered them free tickets if they would talk about the movie on camera afterwards, that arrangement should be clearly and conspicuously disclosed.

Pages 10-12 cover Material Connections, and include 9 more examples. The guide states that any material connection that is not reasonably expected by the audience (ie payment or free product), or any connection that might affect the weight or credibility of the endorsement, must be disclosed.

Examples 7 and 8 are of particular interest to us:

Example 7: A college student who has earned a reputation as a video game expert maintains a personal weblog or “blog” where he posts entries about his gaming experiences. Readers of his blog frequently seek his opinions about video game hardware and software.

As it has done in the past, the manufacturer of a newly released video game system sends the student a free copy of the system and asks him to write about it on his blog. He tests the new gaming system and writes a favorable review.

Because his review is disseminated via a form of consumer-generated media in which his relationship to the advertiser is not inherently obvious, readers are unlikely to know that he has received the video game system free of charge in exchange for his review of the product, and given the value of the video game system, this fact likely would materially affect the credibility they attach to his endorsement.

Accordingly, the blogger should clearly and conspicuously disclose that he received the gaming system free of charge. The manufacturer should advise him at the time it provides the gaming system that this connection should be disclosed, and it should have procedures in place to try to monitor his postings for compliance.

Example 8: An online message board designated for discussions of new music download technology is frequented by MP3 player enthusiasts. They exchange information about new products, utilities, and the functionality of numerous playback devices.

Unbeknownst to the message board community, an employee of a leading playback device manufacturer has been posting messages on the discussion board promoting the manufacturer’s product. Knowledge of this poster’s employment likely would affect the weight or credibility of her endorsement. Therefore, the poster should clearly and conspicuously disclose her relationship to the manufacturer to members and readers of the message board.

This FTC update to advertising & endorsement guidelines is the first since 1980, and was necessary due to the ever-growing influence of social media - and the web in general - on consumer buying habits.

Personally, I think it's a good thing. Disclosure equals transparency, and transparency equals trust. The more honest and objective we are in our promotions, the more likely we are to gain our readers' trust.

Up to this point skepticism has been running high and increasing every single year. Consumers are wary of scams, and wary of review sites in general. Casual polls have indicated that most consumers believe review sites are paid to endorse specific products, and therefore can't be trusted as a source for honest reviews.

The new FTC guidelines should serve to increase consumer trust over time, and ultimately result in higher conversion rates for compliant publishers.

That said, the lines drawn here are still not entirely clear. When TechCrunch asked for clarification, they were given the following response:

The question as we put it in the notice we published today is whether, viewed objectively, the blogger is being sponsored by the advertiser. (We list a number of factors to consider.) Independent product reviewers, whether offline or online, would not be viewed as sponsored by the company whose products they are reviewing.”

This leaves Affiliate Marketers asking the all-important question: Are we sponsored by the merchant, or are we independent product reviewers? If we purchase the product ourselves, are we required to disclose our relationship with the merchant as an affiliate, or disclose the fact that we earn commission on sales generated by our affiliate link within the review?

Michel Fortin discusses the FTC Update as it relates to both affiliate marketers and those who run affiliate programs in his post titled Is This The End of Affiliate Marketing?

There are many things that are not 100% clear in the released updates & documents, but some clarification was found when FastCompany interviewed Richard Cleland, assistant director, division of advertising practices at the FTC. Richard said:

The bloggers have to look at how they do their blogging, their business practice, and figure out the way that consumers will best get the message that this is a sponsored post. In terms of clear and conspicuous, the criteria there is that the consumers will notice the disclosure. Disclosures can be made in different ways, 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."

He went on to clarify that the government is not out to slap 5-figure fines on violating bloggers, but rather that they may receive a warning and an opportunity to comply. He states there will be no monetary penalty on the first violation.

(Hear that collective sigh of relief? ;) )

For clarification, these federal guidelines are effective as of December 1 2009 and affect the use of testimonials and endorsements and disclosure of material connections in advertising in the United States.

The bottom line:

If you are US-based and you don't already have disclaimer and disclosure statements posted on your blog or website, now is a good time to create those pages and make sure the links to those pages are plainly visible to your readers.

Also, make it a point to be as clear and honest in your reviews or product discussions as possible. Your relationship with the merchant should be obvious, your opinions should be stated as such, your results should be qualified, and you should basically go out of your way to be as objective and transparent as possible.

And otherwise... carry on. :D

Best,

About Lynn Terry

Lynn Terry is a full-time Internet Marketer with over 15 years experience in online business. Subscribe to ClickNewz for the latest Internet Marketing trends & strategies, Lynn's unique case studies, creative marketing ideas, and candid reviews...more»

Discussion

  1. Randy Cantrell says:

    Well done.

  2. Was waiting to see what you'd say about this! I've been collecting posts and opinions from various blogs for a week or so myself and will make a post on my blog about it too.

    I totally agree that anything that can help increase transparency is a great thing. I also think that if you've worked on building the relationships with your market then disclosing affiliate links shouldn't be an issue at all. Some people I know (myself included) go looking for affiliate links when they purchase products so they can give friends the commission.

    Thanks Lynn!

  3. Great post Lynn, I too have been waiting for your opinion.

    You know what really annoys me about this new ruling, that "old school" print media is excluded. Magazines are inundated with free products so they will write about them. How is that any different than a blogger? I think it is worse.

    If I recommend a lipgloss I got for free, or am an affiliate for, how is that worse than Vogue recommending it because they got it for free, and know that Estee Lauder spends $100K (totally made up figure) a month advertising in their magazine? Is my little opinion that much more persuading than Vogue? I don't think so ...

    I am all for disclosure, but I think there is a huge double standard here. If a blogger has to disclose, so should ALL media.

  4. Scott Lovingood says:

    Just like the government to create regulations to help solve a problem and create a ton of unintended consequences. Transparency is a wonderful thing. Consumers are becoming jaded by the onslaught of review sites which means they lose their effectiveness. This isn't good for marketers either.

    I have a couple of problems with how they implement these rules though.
    1) They appear to create a different set of rules for bloggers/web only publishers than a "real world" publisher as far as disclosure requirements go.
    2) They don't do a good job of detailing HOW to make this work. Can I post one page on my site that says "Everything you read here may contain an affiliate link. It may be a review of a product that was provided for free or I was paid to write this review. My reputation matters to me so I will only review things I truly believe in or give you my honest opinion" or do I have to post a disclaimer at every link?
    3) Testimonials are dead. The rules they put in place basically kill them. The question now becomes can I tell my own story? Give the details of what I did and the results I got? On average people get ZERO results from this product. The small minority who actually do something with it will see results. The ones that rock it may come close to duplicating my results or may even exceed them. Is that acceptable?

    Maybe I should start a review site for review sites :) People could set up real name profiles like on Amazon and post real reviews of products. Changes in the rules will make a change in how people go about marketing. It will be interesting to see how this gets implemented and the changes people make.

    • "The question now becomes can I tell my own story? Give the details of what I did and the results I got?"

      Exactly.

      I represent over 200 products. One in particular stands out above all the others because of the dramatic effect it's had for me personally. Because it's such a compelling personal story, I share it with everybody I talk to.

      I also always add a "your mileage may vary" statement to the end of my story. It's just plain good business. If I sell a product to a customer and make a claim I can't support, I'm going to lose that customer fast.

  5. Marya Miller says:

    Christie, that is a good point about print media.

    Lynn, thanks for once again putting things so plainly. Regarding "c) When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product. [See § 255.1(b) regarding the “good reason to believe” requirement.]"...

    ...I remember when I first came across affiliate marketing, a few years ago now, how shocked I was that people would recommend something without using it, and how incestuous I thought all these people recommending each others products were. I now know that there are marketers whose recommendations we trust because of their core integrity, but I never want to lose that memory of my initial reaction, now that I'm immersed deep in the world of internet marketing myself.

  6. Traci Knoppe says:

    I added a Disclosure page to my blog early this morning.

    My next question is that if you post your atypical results from a product you will receive a commission on; how do we go about getting typical results to share?

    I know as a product creator myself, I hear from those folks who have done well with my product, but usually nothing from those who have not (whether it's because they haven't actually used my product they purchased, or some other reason).

    So how do we get the typical results? Survey or Poll our consumers? Does this mean that all affiliate product creators need to attempt to contact clients to poll for typical results?

    Traci

    • Good question, Traci - and Michel Fortin raised that same question in his post regarding this update:

      " in the case of a mar­ket­ing or business-​​building train­ing pro­gram, which teaches mul­ti­ple strate­gies, mul­ti­ple con­cepts, for mul­ti­ple types of busi­nesses, in mul­ti­ple mar­kets, the prob­lem is that there is no “one size fits all” of using this prod­uct. It’s impossible.

      (And most how-​​to or do-​​it-​​yourself infor­ma­tion prod­ucts fall in that category.)

      Every sin­gle user of that train­ing pro­gram will have a dif­fer­ent result. There is no such thing as “typ­i­cal.” In fact, by the very exis­tence of such a train­ing pro­gram, all results are atyp­i­cal. So the ques­tion is, how do you com­ply with the new legislation?"

      source: http://www.michelfortin.com/affiliate-marketing/

      There was one particular example though that brought more light to this. I believe it was in the PDF document, not the web-based document. The example was a diet product and the statement that "Sally" had lost 56 pounds taking this product. That type of statement is atypical and not compliant. However, when they said "Sally lost 56 pounds by exercising vigorously for 6 hours a day, eating only raw vegetables and taking this product" - that WAS compliant. The first instance being misleading, the second not.

      So in regards to endorsements or testimonials, and specifically atypical results, more information is required to make sure that consumers are aware of all the details.

  7. Laurie Neumann says:

    So, may I ask if I am clear on this? From what we know now, affiliates should have a disclosure statement on their website and blog, stating that they are an affiliate and will receive a commission on a sale?

    Is setting this up on one page good enough and having a link to it from all pages - it doesn't have to be completely stated on every product review page, does it?

    • In the original post above I quoted Richard Cleland who says that you have discretion on that point - that you can include it within the discussion or in close proximity. Also, if you are not compliant you will receive a warning and an opportunity to comply - so no real worries.

      I would include a disclosure document, and a prominent link to that page from all pages of your blog/site to start. In cases where you think it might be necessary, such as individual reviews or ads, disclose as much detail as possible.

  8. I'm sorry, but I think all this is nuts. People sell things all the time without having actually tried the product. It happens in every store you go into. I went to a computer store the other day to buy a laptop for my son. I asked the salesman for a recommendation. He gave me his thoughts on what he thought was best. He doesn't actually own the brand and model that I was looking at. He couldn't possibly own all the brands that he sells at the store. Same for a used car salesman (yeah, I know, not the best example, but why aren't they held to the same standard). Think about how many times you go into a store and a salesman tries to sell something to you. They go by things they have heard, research they have done, and what little they may actually know. And these salesman get paid for selling me something. And often they get a commission. Hmmm. Sounds like affiliate marketing. I don't see how our websites are much different. I recommend something, you buy it, I get a commission.

    Ever seen an advertisement for something in the newspaper? Has every claim been verified and is there anything that makes it obvious that if you sell something, someone is going to make some money on it? Of course not, it is just assumed.

    I think that online sellers, whether affiliate or not, just need to be honest. If you haven't used the product, don't say you have. Don't use fake testimonials. Don't claim things that aren't true. But why can't it just be assumed that if I recommend a product, and you buy it, I may get a commission? Sure would make everything a whole lot easier.

    I don't understand why online sales are being held to a different standard than conventional sales.

    • I agree on the point of being honest. I've gone out of my way to show proof of purchase in my own product reviews, and teach the same to my readers. (see: http://www.clicknewz.com/1995/how-to-write-a-product-review/ ). I discuss the order process, the shipping time, have taken video of order form walk-thru, etc. Proof & trust sell.

      As for your other comments regarding sales personnel in stores, there is an understood expectation of their lack of ownership. They are simply trained personnel and that is assumed and understood.

      The main problem the FTC has with online review sites is the fact that the relationship or the context of the endorsement is NOT assumed or understood. For example, if someone reads online that Sally lost 56 pounds with this diet product, they assume that statement is true and that she in fact lost 56 pounds just by consuming that product (period). It's misleading, and that is what the FTC is attempting to correct.

      I still think that "buyer beware" and personal responsibility - aka a little common sense - should be bigger factors in any purchase we make, online or off.

      But then, there are people out there just looking for sneaky new ways to rip people off, preying on their emotions - their deepest fears and desires. All said and done, I think we have the Acai campaigns to thank for this one...

      • Lynn,
        I agree with much of what you have said. I don't know about you, but I have salesman in stores try to sell things to me with what I thought were exaggerated claims. Sometimes I'm knowledgeable enough to call them on it, sometimes I am not. We've probably all been burned at least once in our life with that type of thing.

        My biggest concern, after reading some of the posts that you referred us to in your article, is that these rules will be further reaching than what we suspect right now, and that the ramifications will be much larger than we suspect. I hope not, but, in my mind, it is a big unknown right now.

        • That's true, and there's no way to tell how things might unfold in the future. The best advice is to keep your business honest, and keep your ears open for updates.

          On a good note, this will weed out a lot of crap/spam we compete with in many places online, and will open up more opportunities for real online business owners.

          • Hi Lynn
            I couldn't agree more with this. The same is true of normal "offline" business. I recently heard of a professional hairdressing salon in a busy shopping mall, who is competing with the quick, hair cut, styling new salon. The professional salon has never been busier fixing up the messes left by the cheaper and less professional business.

            On a different note, I run an online gift boxes business, which is not a .com site, and I have my customers testimonial, all of which are unpaid comments. Do these require that I should state that they are unpaid comments or does this only apply to the .com sites?

          • Hi Diane,
            These guidelines apply to U.S. citizens who operate a business online. I'm not sure how they'll treat .co.nz or .co.uk domains but I believe it will go back to the domain owner being a U.S. citizen. Makes things even more interesting in my opinion, given that the web is world-wide...

    • Carrie at NaturalMomsTalkRadio says:

      I totally agree Scott! How many cashiers at Wal-Mart have tried every product they're "selling"? Why should it be difficult for us to make a living because there are a few bad apples?

      Thank you Lynn for breaking this down into something actionable.

    • David "the grossho" says:

      Hey Scott.....
      This is just the begining of "BIG GOVERNMENT"
      telling us what we must do.
      This can only be changed at the "voting booth" and
      to tell you the truth.....it probably won't change
      these kind of things.
      Face it...Our freedoms in America are slowly being
      taken away...one by one.

      Re: Donald Barrett of ITV Ventures
      was sued for millions for making "claims"
      about a health food product...yet the drug
      company's get away with "murder."

  9. Laurie Neumann says:

    Great comments, Scott. I hadn't thought of it like that but you are absolutely right.

  10. Scott, I agree with much of what you posted. I also think the guidelines will quickly face a legal challenge for the the reasons you give.
    Why is it necessary to disguise, cloak, or otherwise shorten a sff link in the first place? Because the same people who know that most sales person are on commission who do there best to beat an affiliate out of the commission they receive even though in most cases there is no monetary reward by doing so

  11. I think it's important to realize, and helps put this all in perspective, that the FTC is not targeting the typical blogger - people like us. They are going after the "fake bloggers" such as those for the Acai products that featured false testimonials and fake profiles.

    At this point, someone has to actually complain to the FTC for them to review your blog - and even then you are simply given a warning and an opportunity to comply. I read somewhere that they had to receive at least 100 complaints in order to issue said warning - though I haven't found an official statement on that yet.

    Regardless, I don't think we have much to 'fear' over all of this. Do your best to comply - it will only make you a better blogger, or better at online sales in general. ;)

  12. Once again, Lynn has hit the nail on the head and drove down that it is the lack of transparency,made-up testimonials. and other such silliness that is the real problem. Hopefully it will take 100 complaints for a first time warning issuance as there are people who love to complain & bitch and who will now that they have another avenue to go down.

  13. Lynn,

    Moving past our actual blog pages, how do you think this affects affiliate marketers? Do you think we'll be required to disclose every affiliate link in our emails, special reports, information products, and continuity programs?

    I'm all for honesty and transparency and think that consumers deserve it. I'm just wondering if perhaps we'll be able to include a statement in each product explaining that we have an affiliate relationship with the products we recommend or if we're gonna have to spell it out each time we include a link.

    That certainly won't make our products very easy to read, will it?

    Will there be prohibitions against link shortening services like bit.ly? What about cloaking/redirecting links so affiliate commissions don't get stolen (or are at least less likely to be)?

    Do you think that affiliate marketing as we know it today will cease to exist?

    Thanks for your research and all the details you put in your post. I've been following the FTC story and your article is one of the most thorough and understandable I've seen.

    Thanks, too, for facilitating the ongoing conversation.

    Sheryl

    • Hi Sheryl,

      No, I don't think this spells the end of Affiliate Marketing. That was not actually specifically addressed in so much as the pay per post type situations, or typical review sites that receive compensation for their product endorsements.

      That said, it will obviously affect affiliate marketers. I think a blanket disclosure on your domains will be a good start. Unless someone complains, you won't have to worry about the FTC prowling around your site just looking for violations. And as stated in the original post, the first step would simply be a warning and an opportunity to comply to their standards.

      • And if "someone complains", will the FTC require their real name/website? Will they tell us who complained? And indicate what our relationship might be, such as competitor? Or jealous ex-spouse or ex-affiliate?

        Not sure about y'all, but I'm gonna encourage my kid to go to law school next year. It's gonna be a goldmine.

        (** I have not endorsed any particular law school, and I have not implied that my child is smart enought ogo to law school. I have not even indicated which of my children, if any, this post may refer to. And no law school has offered my child a spot or scholarship money to attend.)

        • LOL @ your disclaimer, Anita - I love it! :lol:

        • Traci Knoppe says:

          [spewing iced tea] ROFL Girl you crack me up! hehe

          As far as knowing who complained to the FTC: that's a very valid point. I would assume that the FTC would investigate before taking any action.

          • From what I understand it's going to take multiple complaints (like a minimum of 100) for them to even issue a warning and an opportunity to comply. I doubt we have to worry about the onesies.

            But just let someone "harrass" me to that extent without good cause and watch the counter-suit fly ;)

        • OMG! Love the disclaimer Anita! :)

          I've had a disclaimer on my blog for a long time, generated by a free service: http://nicoleonthenet.com/disclosure/ (sample) - I didn't see anyone mention this free disclosure creator site yet, but may have missed it.

          I'll check with them to see if they're current, but at this point something is better than nothing.*

          (* I am not a lawyer, nor do I play one on TV. "Something is better than nothing" is my personal, uneducated opinion.)

  14. I just published a new product review here at ClickNewz that I wanted to share with you here as an example:

    Super Affiliate Handbook Review

    In this review I share my "atypical results" of earning $30k in the first 9 months, part time alongside my already full time business, by implementing what I learned in that guide.

    I qualified those results as atypical and explained why I was able to achieve those results when others might not.

    This is what the FTC is looking for - versus just saying "I made $30k in 9 months and you can too!" with no detail or explanation. Make sense?

  15. "This leaves Affiliate Marketers asking the all-important question: Are we sponsored by the merchant, or are we independent product reviewers?" <- this was one of the many things that I was wondering as well.

    Another thing that was rolling around in my brain is that up until now in a lot of cases a "disclosure policy" on a blog gave the impression that a blogger was doing paid blogging, because that's a requirement for a few of those companies.... there was even some talk at one point that Google was slapping based on those posted disclosure policies since many were using a copy and paste free off the web type policy.

    The whole FTC thing has had me sort of on hold in the back of my mind the past week. I've been holding off on a new project that I had started, because this whole thing has given me a feeling of unease.

    • Honestly, I wouldn't stress over it. And if you're concerned about adding a single "disclosure policy" to your blog, take Dan Thies' advice in http://www.seofaststart.com (free SEO guide) and create ONE page that contains your entire privacy, disclaimer, disclosure & TOS policies all together.

  16. Here's a great new article, definitely give this a read:

    FTC Reassures Bloggers - Big Brother is NOT Watching:
    http://legaltimes.typepad.com/blt/2009/10/ftc-.html

    "In a conference call for reporters today, Engle aimed to set the record straight after a flurry of news stories (not to mention blogs and tweets) about the FTC's new advertising guidelines that were, as she put it, "all wrong."..."

  17. Laurie Neumann says:

    Well, this article makes me feel better. Thanks so much for sharing that.

  18. Will the politicians need to post disclaimers and atypical results on the legislation they are proposing in congress too? Now that I'd like to see. In for a penny in for a pound.

  19. So much for freedom of speech. Your opinion is your opinion, and damn be the government for trying to slap fines on people for voicing their opinions on a product/service even if it is "misleading" from what the company of the product might say.

    Freedom of speech violated? Very so.

    • Actually, in the examples given by the FTC, bloggers are free to share their opinions of products & services when there is not a relationship with the merchant or advertiser (ie no compensation for the opinion).

      It is when they are paid or compensated in some way that their opinion becomes "advertising" and therefore falls under advertising guidelines.

      So I can freely tell you which mascara sucks and which mascara makes me look like a movie star, on my personal blog, as long as I am not getting paid in cash or free product for that opinion. Because then it is just an opinion, and not an advertisement.

  20. Another article I'm reading, sent by @MikeHays:

    IAB Tells FTC To Scrap New Blogger Rules
    http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=115563

    • Thank you, Lynn, for alerting us to this proposd ruling, even though we, Brits, will be unaffected for now.

      Although many affiliate promotions are carried out via a blog, there are many of us who use static websites for the same purpose so I take it that this ruling would affect one and all, irrespective of what type of site one has.

      Whilst those of us outside the US may not be affected, as yet, it's generally the case that what the US rules today is adopted by other countries tomorrow so none of us can relax for long.

      In any event, transparency is a good thing but it needs to be applied across the board (including politicians' endorsements, lobbying and special interests/connections/remunerations) rather than aimed at a certain sector of the industry, otherwise it is, in my humble opinion, discriminatory.

      Until that happens, I doubt that the FTC's ruling will have a legal leg to stand on. But even if it does, the remedy is simple and you, Lynn, have already suggested this.

      I post my TOS, Disclaimer and Privacy Statement which anyone visiting our sites may read and in which I will now make it even more plain (in legalese) that whilst reviews of products given on our sites are based on our personal experience and opinion, if any item is purchased through our links, earned commissions from the product vendors may be the result and that they should make their own independent enquiries and satisfy themselves of the validity of any statement made in the review and the eventual benefit to themselves if they choose to purchase the item.

      Only the very naive person believes, when reading a review, that the recommendation is entirely ultruistic.

      The FTC and any other regulatory body cannot ignore the fact that online marketers, like any other enterprise, are running a business rather than a charity. So whilst wild and misleading advertisements/recommendations are wrong and should, quite rightly be stopped (as is a misleading ad), a genuine and informative review based on one's honest opinion should not be an issue for anyone, including any regulatory body.

      I seldom, if ever, purchase anything online, particularly IM products, no matter who has emailed me with an endorsement, without first reading a number of reviews on the subject.

      Not once have I thought that the person writing a review was totally unbiased. But the information presented on review sites, a number of which are excellent affiliate sites, have helped me make up my mind one way or another and for that, I'm very grateful.

      Often regulatory bodies forget that we, the general public, don't need someone else doing the thinking for us. We are grown up and have some intelligence to judge whether or not something is false. Even when we are taken in by the persuasive nature of a recommendation only to be disappointed, later, there is redress in the form of a refund from the product vendor. Problem solved! So why the fuss?

      So let us honest marketers get on, please, without unnecessary restrictive practice regulations.

      James

      • James

        Thanks for your comments and further clarification. I too will now recheck my Disclaimer and Privacy Policy. Tell me if I have a couple of pages of customer testimonials, should I have a comment on the beginning or end of this page? I would appreciate your feedback on this one.

      • James,

        I believe "the fuss" came on the tail of the "floggers" or fake bloggers on the Acai berry campaign. It was false advertising, misleading, and then customers had a hard time getting refunds I believe. You might research that whole bomb to get a better understanding of where this all originated - in regards to online advertising.

        Although many affiliate promotions are carried out via a blog, there are many of us who use static websites for the same purpose so I take it that this ruling would affect one and all, irrespective of what type of site one has.

        Right - the FTC guides apply to social media properties, web pages, blog posts, and even word-of-mouth referrals & marketing.

  21. Lynn:

    Thanks for the explanations and the examples, not to mention the link to the actual PDF.

    I am just wondering how long it will be till an IM product on creating foolproof testimonials will come out ? Tick Tock Tick Tock...

    Have you ever seen and ad on tv for a medication ? They are required to list every side effect including possible death, yet they continue to advertise. Why, because people will still buy their product because of the possible benefits.
    I think we have it easy compared to them... I wonder how small we can make those disclaimers ?

    Does "Ads by Google" at the top of adsense ads comply ? Clearly there is no endorsement and they are clearly identified as ads.

    Great comments and responses, Thanks to all

    Pablo

    • Good question, Pablo. It seems that "Ads by Google" would fall under the consumer assumption that they are advertisements and not personal endorsements. The biggest issue is fooling consumers into believing something that is not the case, so I think we're safe on that one.

  22. Laurie Neumann says:

    Great post, James.

  23. Lynn, thank you for your excellent and thorough analysis -- I will be sharing this with authors and publishers on my networks. Dana

  24. Thanx Lynn for putting more info out about this!

    And James, your comment is right on the money. ;-)

    And it begs another question ... We, as marketers, have our responsibilities to the consumers but at WHAT point (IF ever) will the consumer be held responsible for THEIR decisions?

    NOT in my lifetime, it seems. heh heh

    Rick Wilson aka CorpRebel 8)

  25. Very interesting development...

    With respect to the TOS, Disclaimer and Privacy Policy, is there somewhere I can get a copy of it? or do I have to make my own?

    Phil.

    • Phil,

      I can tell you from personal experience - do NOT take or borrow anyone else's legal docs. These are copyright protected by the attorneys who write them. A few years back I borrowed one page (ignorance) and paid a fine for it.

      Hire an attorney and have them done right. It costs less in the long run!

      Mike

    • I'm looking into & reviewing a resource for that now. I'll keep you all posted as soon as I complete my analysis. ;)

  26. Lynn,

    Thanks again for a great post and all the follow up you do with questions and comments. I always find a voice of reason and common sense in your posts. Much appreciated! :-)

  27. Lynn - As always you are on it! Just as with the state sales tax issue earlier this year, you have a unique gift manifest in your ability to make complicated issues easy to understand provide guidance on the way forward. This issue will be interesting to watch as it relates to the that which was unintended - as often is the case when regulating business. I just hope no one goes overboard in their concern about the conduct of affiliate marketers.

    My best advice as when playing in Google's courtyard, play by the rules and stay off of the radar screen. It may require more work on your part, but it will b worth it!

    I appreciate you!

    James

  28. Storm in a tea cup if you ask me :)

  29. What's not clear for me is the issue of healing services. I don't sell products. My clients come to me for alternative healing. Where does that fall in the guidelines? And I also take people on spiritual journeys to sacred sites around the world. What happens to the testimonial they write for me about that? Is it endorsing a "product"? I'm confused. Thanks for any clarification you can give me.

    • You should read the documents for yourself to get a full understanding of the updated guides that go into effect on Dec 1st. But regarding endorsements or testimonials, if they mention "results" and those results are "atypical" then those results need to be qualified.

      But if they don't mention results, and just talk about how much they enjoyed the experience, or their personal fulfillment (I am not familiar with your method so forgive me if I'm off base) then it's no big deal. The FTC simply wants transparency regarding the way we frame our products and services.

      I have another - hopefully more clear - post on the topic coming up soon so be sure to subscribe and keep an eye out for that.

  30. Lynn, thanks for keeping us informed of the developments in this issue, and for intelligently interpreting the FTC documents for us. I have to admit, I haven't read the documents myself. Every Internet marketer should make time for that.

    In fear, I've pasted disclosures on my sites and emails. I do worry still about a sales page where the headline consists of specific results a particular expert got from following her own strategies (the product is an interview of the expert).

    The new FTC guidelines will certainly affect how we write copy and promote products/services. There are so many gray areas. I think it will take time and some real-life cases for us to fully grasp how to comply.

    Lexi

    • See my newest update, linked below as a pingback, and keep an eye out for my next post. The thing with atypical results is that they need to be current, accurate - and qualified. I'll address that in detail in my next post. ;)

  31. Arun Pal Singh says:

    While this sure would cause transparency in blogger world but I do no think it would make much difference in overall way the business is conducted.

    Sponsored covert endorsements continue to occupy major place in media and this would continue in blogger world.

    Only the older ways would give rise to newer.

  32. I'm unclear on how these regulations are going to affect affiliate marketers from countries other than the US. How can the FTC guidelines have any "teeth" with an offender in, say, India?

    • I am not sure on the details, Bruce, but it was said that the new FTC Guides affect all US advertising regardless of where the business is physically located. I imagine any type of traditional advertising has to follow the same guidelines, but it will be interesting to see how they enforce it with online marketing from companies outside the US.

  33. That's a real eye opener for me. I was totally unaware of that to be honest. That's a great post and some excellent responses. Thank you

  34. Excellent breakdown and explanation

  35. Michael Anderson says:

    So, no more false advertising on the Internet without a disclaimer? Looks like the Acai berry is done for as are many of the weight loss and make money online programs.

  36. I wonder how many notices have actually been sent out. I still see a lot of false advertising, especially on Internet marketing related sites. There are a lot of people making exaggerated claims about how much money their products are going to make people.

  37. Rosalee Endicott says:

    Good stuff. Really good website with lots of information.

  38. It's been a while now and I haven't heard of anyone who has actually got a notice. Hopefully it's just because my friends are doing things the right way...

  39. Hi Lynn,

    I'm looking at different bloggers sites in order to get an idea of what they are saying in their disclosures and I can't seem to find one for you. Where is your disclosure? Also, do you mention that you're an affiliate on the same age that you mention the product or do you disclose the info on a different page? Thanks.

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