The FTC is apparently planning to monitor blogs for paid reviews under new regulations (pdf) that could come into force (in one form or another) this summer.
Lots of bloggers do paid reviews and even more make money from affiliate links so this is a major issue. However it’s not just bloggers who are at risk here – advertisers and merchants giving the affiliate commissions are liable for anything a blogger writes about their product.
The practice has grown to the degree that the Federal Trade Commission is paying attention. New guidelines, expected to be approved late this summer with possible modifications, would clarify that the agency can go after bloggers — as well as the companies that compensate them — for any false claims or failure to disclose conflicts of interest.
It would be the first time the FTC tries to patrol systematically what bloggers say and do online. The common practice of posting a graphical ad or a link to an online retailer — and getting commissions for any sales from it — would be enough to trigger oversight.
The UK has some similar regulations called the Consumer Protection from Unfair Trading Regulations 2008 which require disclosure on affiliate links and sponsored editorial content. So far these don’t seem to have been enforced which begs the question, why were they created in the first place?
Are affiliate networks being asked to force affiliates to disclose all links? Not as far as I know.
How can a merchant be held liable for the actions of an affiliate? Some have thousands of affiliates all writing 1 blog posts a day – who is supposed to police that?
Below is an example from the proposed FTC regulations:
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 70 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 false or unsubstantiated statements made through the blogger’s endorsement.
The blogger also is subject to liability for representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services.
The FTC is offering advice to advertisers suggesting that to reduce liability they provide training to bloggers and monitor all blog posts to ensure that they are accurate.
What do you think, will you disclose affiliate links?
Patrick Altoft is Director of Search at Leeds based digital & SEO agency Branded3. Patrick also runs Blogstorm.You can get our blog posts delivered for free by email every day - simply add your email address to the box below or alternatively grab the RSS feed.
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Wow, does this mean that the big names in blogging, whose income stream is from affiliate marketing and paid reviews, would suffer drastic losses in their income? Does this regulation apply to bloggers outside of US and UK?
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They won’t see drastic losses – they just need to disclose what they are doing.
More comments from Patrick AltoftInteresting point. For what it is worth I always disclose affiliate links. On my community sites I ensure there are prominent sticky posts within the forum that outlines all the info. I actually find that when people understand it they choose to support it and enjoy the transparency. Loyal members will actively buy through your links repeatedly so it is worth explaining how you benefit.
On other sites I always ensure there is a “terms/privacy/blah” page which outlines everything. Many schemes, including Adsense for example, insist that you print such disclosure and even if no authority is watching you might risk getting cut off by your partner and losing commission.
I would question anyone who is actively trying to hide their affiliate status. As a reader I would lose trust if they were trying to be secretive. It would make me wonder what they have to hide.
Interesting.
I think it mostly depends on the vertical involved. A blogger is going to find it really hard to credably recommend, say, double glazing, if he/she states he’s being paid for this. Whos is really going to believe this review?
Also, I could see this hurting UK bloggers more than the US if rules were enforced over here. The feeling i’ve always got is that people in the UK are less trusting and uneasy at the idea of other making money off them than in the US.
I’m curious how this might affect pay per click advertising programs like adsense. I think for bloggers and other creators of online content it will be pretty simple to comply with a prominently displayed notice that the page is sponsored in part by displayed advertisements. I seriously doubt such a statement would have much impact on the earnings of most bloggers using pay per click. However what I think could have a significant impact on the advertisement earnings of bloggers is if merchants shy away from this type of advertisement due to a perception of potentially increased liability.
There is a good article here that describes what an official at the FTC said about how users of pay per click and other affiliate advertising programs may be affected by the new disclosure requirements.
http://hubpages.com/hub/New-FTC-Guidelines-Affect-All-Bloggers
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