If you haven’t heard, the Federal Trade Commission (FTC) has made some major changes to rules governing what has to be disclosed in Blogs, websites, and Social Media.

For the ones who have a lot of time on their hands, these new guidelines are published at http://www.ftc.gov/opa/2009/10/endortest.shtm. I have read the entire guideline and here is my take.

First: let’s get the formalities out of the way. I am not a lawyer, never have been, never have wanted to be. But I’ve dealt with lawyers and the law and how it pertains to business on several levels. I’m no spring chicken and have been in business for a long long time. So, please read this post and then use your own judgment as to whether you should consult a business attorney to review your site(s).

Ok… let’s go!

Believe it or not, some people actually make money blogging and posting on Twitter, Facebook, Myspace, and other social media sites! Are you kidding me???? For Real???? 🙂

On top of that, some people even get paid to post reviews. These methods of payment come in the form of free products, memberships to other sites, or even cold hard cash! Gee, sounds a lot like affiliate marketing doesn’t it? 🙂

This “problem” has been brought to the attention of the FTC. In order to protect the masses, that are evidently too stupid to figure out for themselves if the poster is making money from the post, they have decided to fine posters up to $11,000 per occurrence for non-disclosure.

Now I realize that there are unscrupulous bloggers and advertisers out there that blatantly prey on unsuspecting readers by hyping a product in order to get their click-through using the affiliate link they supply. On top of that, there is a whole sub-industry built upon “cloaking” affiliate links so the reader doesn’t even know that it is an affiliate link. Oh the horrors!!!!

But can we actually protect consumers, who won’t do the most basics of research when purchasing something, from themselves? Moreover, should we? Sorry, but this whole thing just rubs me the wrong way. To see my rant on the subject go here: My FTC Rant

However this post isn’t about ranting. It’s purpose is to inform and hopefully give you a couple ideas on how to modify (or not) your blog posts and sales pages to conform to the new FTC rules.

After reading the entire guideline document I have come up with what I feel are the two most important points that could affect us as Internet Marketers.

By the way, it doesn’t matter what niche you are in, these rules apply equally to people posting about dog training, weight loss, Internet Marketing, or penis enlargement.

Point #1: If you use results based testimonials to promote a product, it doesn’t matter if it’s your product or someone else’s (affiliate products), you have to include typical results as well.

Point #2: If you have any kind of relationship with someone who’s product you are endorsing or promoting, you need to disclose that relationship. For instance, someone sends you a pack of diet pills and you use them and lose weight. Then you post a blog about it telling everyone you lost weight using these pills. You are required to let everyone know that these pills were sent to you for free. Not only that, but to be safe you may want to mention that this was only your result, and that others may or may not get the same results. This is regardless of whether you are promoting the pills with affiliate links or even if you do not supply a link to the product’s site.

While these two points are spelled out pretty well, other parts of the rules are very vague. The FTC realizes this and to deal with it they specify that the rules will be enforced on a “case-by-case” basis. Which is just another way of saying, “we don’t even know what we don’t want to see in advertising, but we’ll know it when we see it”. 🙂

In other words, we won’t know how strictly any of the rules are enforced until the FTC begins to enforce them sometime after December 1, 2009.

How the FTC Rules Affect Testimonials

It used to be that you could display a disclaimer somewhere on the page saying something like “Results shown here are not typical”. This was usually hidden somewhere towards the bottom of the page along with all the other stuff people never read. Not anymore.

The rules state, “advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect”.

Now using their own wording, you can choose to pick this apart and justify your posting of such testimonials by saying that the testimonial was not intended to be a typical result. You could also try to get by with the same type of disclosures we’ve been using all along (small type at the bottom of the page) changing the wording to include what you believe are “typical” results.

What are “typical” results? Well, to take making money types of offers, the typical results are that people will buy the product and do absolutely nothing with it and thus, won’t make a cent. So just put this statement into your existing disclaimer and hope for the best? I mean people don’t read them anyway so how much will it hurt?

I personally don’t think this would pass muster in that the past guidelines wording was specifically changed to include the wording “required to clearly disclose”, which tells me they want it in a font and place that won’t be overlooked. I would imagine that to adhere to the rules it would have to be placed directly over, under, or beside the testimonial in prominent font. What do you suppose that would do for sales? It’s certainly not the way I was taught to enhance the sales copy! 🙂

So in effect this means you should not use results based testimonials at all.

However, other testimonials seem to be fine. Ones that say they love the product or that they think you are the greatest thing since sliced bread. These types of testimonials don’t have near the impact that the results based ones do, but at least it doesn’t appear they will get you into trouble.

There is more. Concerning the other (disclosure) point and how it applies to testimonials, there are also some considerations. Say a friend of yours (JV partner perhaps) writes a testimonial for you. Do you have to disclose this relationship? In the strictest interpretation, I would say yes. Would you get into trouble if you didn’t? Maybe not, but then again, is it worth the chance?

While the rules concerning testimonials can be taken as a death knell for using results based promotional tools (including revenue screen-shots) there is a bright side. You no longer have to concentrate so hard on acquiring quality testimonials. As with all of Internet Marketing, and those resourceful people who choose it as a profession, we will overcome and eventually come up with other sales tools that will work equally as well.

How the FTC Rules Affect Affiliate Marketers

Even though there seems to be an uproar among affiliate marketers concerning these rules right now, the bright side is that affiliate marketers seem to have the least amount of changes to remain in compliance. The rules basically say that you have to disclose that you get paid when the reader purchases though your link.

Since this is one of those “gray areas” in the rules, you may be able to get by with changing your standard disclaimer and adding something like, “Links in reviews, articles, and posts on this site are affiliate links. This means I get paid a commission when you buy after clicking on one of these links”.

On the other hand, some people have interpreted the rules to mean every affiliate link must be disclosed. If you’re the conservative type, you may want an explicit disclosure on each link. Something like, “I will get a small commission if you purchase though this link”. Personally I think this is overkill and would rather move all my affiliate links out of the post’s text and into obvious display ads bordering the post.

Either way, we don’t yet know if one, or either, of these approaches will hold up until the FTC releases information solidifying their position on affiliate links. As I said, this is still somewhat of a “gray area”.

One thing worth mentioning, if you use the product developer’s sales material in your promotions, do take note of anything that may run up against the FTC new rules. If it’s posted on your site you could very well be responsible for the infractions.

Another “gray area” is that of email marketing. While it’s not explicitly spelled out in the rules, it very well may be one of those things that fall under the “case-by-case basis” umbrella. I would say if emails have any results based testimonials and/or affiliate links directly pointing to a sales page, deal with them the same way you would if it were posted to your site.

One more thing, do you offer eBook “freebies” filled with affiliate links? It’s up to you, but at the least I would add a disclaimer to the last page of each one letting people know that you get paid when they purchase through the links in the book. To be absolutely safe you may want to add a disclaimer to each link or maybe just a little (aff) after the link with a definition at the end would do the trick.

How the New FTC Rules Affect Product Developers

Product owners/developers are probably going to be affected the most.

Here’s what you should do at a minimum…

Change your affiliate marketing material, including email templates, solo ad templates, banner ads, and any other related material to get rid of any results based claims. Let your affiliates know of the changes and encourage them to use the new material.

Where typical/average results can not be accurately shown, you need to get rid of any and all results based testimonials on sales pages.

Go into your actual products and remove any user contributed results. This may be a bit much but it’s better to be safe than sorry. If you do include your own results in your sales pages or products be sure to show ALL your results from ALL the campaigns in which you used the product.

If you gave away any free “preview copies” of the product to people and they then wrote you a testimonial, disclose this information on your sales page.

Summed up…. when in doubt, DISCLOSE. At least you’ll have a leg to stand on if you do come under the gun of the FTC during a witch hunt.

Or you can just ignore all those Internet Marketing manuals that tell you how to cloak your links, make up results, bribe for testimonials, and become an ethical Internet Marketer. It isn’t that hard, I’ve been doing it for 6 years! 🙂

Some good news…. according to some blogs I’ve read quoting an FTC spokesperson (in other words, do your own research:) ), they have stated that there will be a “three strikes” policy. First, you get a “take down” notice. (Probably a nice email) Then upon non-compliance you’ll get a cease and desist order. (Probably a not so nice email and maybe a nasty piece of paper) Then if you’re really stubborn, they’ll hit you with a fine. And that will be “up to” $11,000.

So don’t quit your business, have a heart attack, or stress out. Don’t believe all the doomsday prophets that are saying we are all going to go under the guillotine. The FTC has big fish to fry and are, I’m sure, more concerned with flogs (fake blogs) and corporations sponsoring regular blogs. Services like Pay-Per-Post already has a disclosure requirement.

I’m not saying you should ignore the rules because you’re a small time operator, I’m just saying do the best you can to comply with your existing posts and from Dec. 1st into the future make sure your posts and ads comply with the new rules. The FTC has also stated that they will respond and investigate complaints. This could affect you no matter how large or small you are.

If you are a “big dog”, I would highly recommend getting in touch with your attorney and letting them guide you through this vague maze as the bigger marketers are more likely to come under the scrutiny of the FTC. For us littler folk and the hobbyist bloggers who can’t necessarily hire an attorney every time a new rule is put into place, let’s just do the best we can do, be honest in our dealings with customers and potential customers, and hope for the best! 🙂

There is no doubt Internet Marketing advertising will change as a result of these new rules. But it doesn’t have to be for the worse. Ethical Internet Marketers may actually have an easier time getting their products to the market once the unethical marketers with their advertising tricks have been dealt with.

For the my personal rant on the rules go here: My FTC Rant – you may get a kick out of it. 🙂

To our continued success!

Update: Nov 5th, 2009
When I wrote this I set a tickler to remind me to have another look at this subject after all the hoopla ran its course. Well its been a month since the announcement and here’s some encouraging news.

Ed Champion talked with Richard Cleland with the FTC and posted his conversation here:

Caroline McCarthy with CNET also talked with Mr. Cleland and posted the results of that conversation here:

So what am I going to do now that I have this additional information? Well I guess I’ll just keep doing things the same exact way I was before until I hear from the FTC that I’m in non-compliance. 🙂 But hey… I’m just a little guy trying to eek out a living so I doubt I’ll ever hear from them anyway! 🙂

This entry was posted on Wednesday, October 14th, 2009 at 7:09 am and is filed under FTC Rules and Guidelines. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Responses to “New FTC Rules – Bloggers, Product Owners, and Affiliate Marketers”

  1. Adam on November 7th, 2009 at 2:28 am

    Can’t really see the problem with putting up a disclosure if one gets remuneration in return for a review or link…just wish they would provide specifics about what they want to see. The ambiguity is infuriating. I know it’s annoying to have to disclose, but if it comes down to being forced or facing the feds in court if you DON’T comply…a lot of us don’t have the resources to fight city hall.

    Didn’t all this come down because of so many consumer complaints about those fake dieter blogs? “My name is Jenny and …yada yada”

  2. Blog Meister on November 7th, 2009 at 7:18 pm

    Hi Adam,
    You’re absolutely right, the rules are not clear in the least. You also have a great point in that fighting a “infraction” would be more than most of us could bear financially. Isn’t it wonderful that we collectively pay to prosecute ourselves?

    But if you read the entire body of the rules, and then read the updated links where Mr. Cleland speaks out I think you’ll agree that this has been overblown. Still it is a first step in what could be a very bad thing, especially for affiliate marketers. Considering the rules have not really been changed since the advent of the internet, it was bound to happen.

    I agree that some of this may have something to do with the fake dieter blogs, but I’ve seen even worse. I came across a pop under the other day that looked like a real online newspaper. There was a story about the affiliate product and several ads in the sidebar. All the links, of course, went to the same affiliate offer. While this type of deception in online marketing really rubs me the wrong way, I have to admit it was very professionally done and an impressive example of thinking outside the box. I can see why people would be upset with these once taken in.

    I think the best solution for affiliate marketers is to be completely upfront about it. Offer a sweet bonus for purchasing through your link and just say that in your review/sales page. Hey, if you buy through my affiliate link below, I’ll give you this and this and this. I think most people would realize that you are making money from the link… why else would you be giving away valuable stuff when they purchase through your link. And I do believe, after reading the rules, that this would qualify as “complete disclosure”. Besides, it’s a great way to add value and, if done correctly, also get people on your list and acquainted with your products/brand.

    BTW… you have a really nice site. I love the layout and content. Thanks for commenting!

    Kind regards,

  3. Update On New FTC Rules | OnlineTrafficHelp on December 4th, 2009 at 3:28 am

    […] On New FTC Rules I recently created a couple posts on OnlineBlogHelp.com giving my take and a rant on the new FTC rules and how they affect online affiliate marketers and bloggers. This […]

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