(Updated 7/11/16) On March 12, 2013, the Federal Trade Commission (FTC) updated its guidance for advertising disclosures in a guide called .com Disclosures: How to Make Effective Disclosures in Digital Advertising. The original guidance from 2000 left open many holes including advertising on mobile devices and places like Twitter and Facebook.
As affiliates, we have already been advised that disclosure must be “clear and conspicuous.” The new document goes even further. In fact, it specifically states that disclosure at the end of blogs posts is not acceptable. Here are some of the highlights from the guidelines:
- Consumer protection laws such as the FTC’s prohibition on “unfair or deceptive acts or practices” apply to all media, including mobile devices.
- Disclosures must be placed “as close as possible” to the claims.
- If there is not room on the ad to disclose, it may be acceptable to make the disclosure on the page to which an ad links.
- Scrolling should not be necessary to find the disclosure.
- If it is too difficult on a particular platform to make disclosure clear and conspicuous, the platform should not be used for advertisements.
- Advertisers should review their ads in the mindset of the “reasonable customer” and assume that customers do not read the entire page.
- Pop-up disclosures should not be used.
How do these pertain to affiliate marketers?
The guidelines themselves are not particularly instructive, but the examples at the end of the guidelines are extremely helpful.
Example 14 in the guidelines is very similar to the types of recommendations that we do in blogs posts and across other media:This is very similar to the Twitter or Facebook posts that most of us in affiliate marketing make. The FTC states that this Tweet would need two different disclosures: one that JuliStarz was getting paid for the endorsement (which would include affiliates) and the second as to the actual health claims being made not being typical.
Here’s the rewrite suggested by the FTC:
The rewrite suggests placing “Ad” at the beginning of the Tweet. Further examples say that it is not enough to write in one place that you are being compensated and then not later refer to that compensation when you do the actual endorsement. The disclosure and the endorsement must be right next to each other. In addition, using “#spon” after the endorsement is not sufficient because consumers may not understand that “#spon” actually means “sponsored by an advertiser.”
Example 21 specifically speaks to bloggers. The blogger received the product for free to review it. She disclosed that fact at the end of the blog post. However, because there are links in the blog post that might take the reader away from the post before they make it to the end of the post, the disclosure at the bottom of the blog post is not “clear and conspicuous.”
Added: Here is more specific guidance previously from the FTC on the term “endorsement” where they do specifically implicate “affiliate marketing.” Important to note:
- “Would a button that says DISCLOSURE, LEGAL, or something like that be sufficient disclosure?” No. A button isn’t likely to be sufficient. How often do you click on those buttons when you visit someone else’s site? If you provide the information as part of your message, your audience is less likely to miss it.
- “If it’s clear that what’s on your site is a paid advertisement, you don’t have to make additional disclosures. But what’s clear to you may not be clear to everyone visiting your site, and the FTC evaluates ads from the perspective of reasonable consumers.” (This would likely mean banner ads and maybe widgets?)
- “an endorsement would be covered by the Guides if an advertiser – or someone working for an advertiser – pays a blogger or gives a blogger something of value to mention a product, including a commission on the sale of a product. Bloggers receiving free products or other perks with the understanding that they’ll promote the advertiser’s products in their blogs would be covered, as would bloggers who are part of network marketing programs where they sign up to receive free product samples in exchange for writing about them or working for network advertising agencies.”
The FTC Updated its Frequently Asked Questions on May 29, 2015 to help clarify some of the questions in the guidelines. Highlights from that update:
- Disclosure must be made in videos themselves in addition to the text around the videos.
- Social media contests must include words such as “contest” or “sweepstakes” in the entries. (Clarified after the Cole Haan Pinterest Letter)
- Products given free for review must be disclosed no matter whether the review ends up being positive or negative.
- A button or hyperlink to a Disclosure page is not sufficient (the reiterated this again!)
- Suggested disclosure on social media platforms includes “sponsored,” “promotion,” “paid ad,” “ad,” or “#ad” although those are not the only words that would work.
- Merchants need to have “reasonable programs” in place to monitor what their bloggers and other influencers are doing on social media to promote their products.
- Affiliate marketers are specifically mentioned in the FAQ. Disclosure must not be placed “below your review or below the link to the online retailer.”
- The words “affiliate link” are not adequate disclosure.
- Paid advertisements do not have to be disclosed if it is clear they are a paid advertisement.
Do you have to disclose on Pinterest?
Now that Pinterest is allowing affiliate links again, everyone wants to know if they have to disclose every link. The FTC has not specifically talk about Pinterest and affiliate links yet, but this makes it clear that Pinterest is included:
The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people get the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. The words “Sponsored” and “Promotion” use only 9 characters. “Paid ad” only uses 7 characters. Starting a tweet with “Ad:” or “#ad” – which takes only 3 characters – would likely be effective. (May 2015 FAQ)
Especially when you combine this with the Cole Haan Closing Letter regarding contest disclosure on Pinterest. The FTC is clearly including Pinterest in the disclosure guidelines.
Warner Bros. Settlement (Influencers, Videos, and Withholding Payments)
The FTC has now specifically said that you must audibly mention disclosure in a video. In addition, the Description box must have the disclosure at the top. Another important thing that came out of this settlement is that Warner Bros. must have Influencers sign that they understand the disclosure rules and then Warner Bros. must monitor for it. If the Influencers do not properly disclose, they must be cut from the program and have their revenue revoked. Read more here: FTC Settles with Warner Bros. Over Influencer Campaign
You may also want to read:
Blogger Involved in FTC Lawsuit for Failure to Disclose: This is one of the biggest applications of the Guidelines so far. Both merchants and bloggers need to read my post on this case because it reiterates in practice much of what I said above. The merchant and the agency were held liable for the blogger’s failure to disclose. This was a paid placement rather than an affiliate relationship, but the principles are the same.