June 1st 2017
5 Ways to Ensure your Marketing Partners Comply with FTC Disclosures

When it comes to affiliate marketing, influencer marketing, and online content that’s promoting a brands products or services, the term “FTC disclosures” is something brands should pay close attention to.

The Federal Trade Commission (FTC) has pretty clear cut guidelines that require anyone to disclose if they have been paid to advertise a specific product. This includes if they receive:
  • commissions
  • free products
  • flat fee payments
  • or, anything of value in exchange for mentioning a product

This is very relevant to affiliate partners as they include affiliate links in their online content.

It also applies to influencers who receive a flat fee or free product in exchange for a sponsored post on their blog or social media channels, including within videos.

While the guidelines have evolved since they were first released a few years ago, the overall goal of the guidelines has remained the same.

The FTC wants to provide transparency to consumers by ensuring that online marketers disclose if there is a connection between their endorsement of a product and the company whose brand they are promoting.

The rationale is that, by knowing about this compensation-based relationship, the consumer is better positioned to evaluate the overall recommendation or review being provided.

If an affiliate or influencer does not properly disclose this compensation-based relationship, it is often the brand that gets hit with a hefty fine and bad publicity – not the marketer.

To ensure that your marketing partners are properly disclosing their relationship with you and complying with the FTC, keep these five tips top of mind:

Table of Contents

  1. With FTC Rules On Affiliate, Placement is Important
  2. The Medium doesn’t change the disclosure requirement
  3. There is flexibility in the language
  4. Standard advertisements are exempt
  5. Always conduct audits to ensure affiliates are compliant

With FTC Rules On Affiliate, Placement is Important

The FTC states “the guiding principle is that the disclosure has to be clear and conspicuous.” In our communications with affiliates and influencers, we let them know that their disclosure should be clearly visible at the top of each of their posts or as close to the actual affiliate links as possible. Either way, the disclosure must appear before the first inclusion of an affiliate link. Here are a few other placement tips:
  • The disclosure should be above the fold and not require a consumer to scroll to see it.
  • Disclosure should stand out and be noticeable to consumers.
  • A single disclosure on the homepage or a hyperlink that states ‘disclosure’ or ‘legal’ is not a sufficient disclosure. This level of disclosure does not convey the full message. What’s more, is that consumers won’t click a disclosure hyperlink and are likely to miss it altogether.

The Medium doesn’t change the disclosure requirement

Disclosure requirements span across many mediums, including websites, social media, videos, webinars, and so on. Within social media, one important thing to remember is that character limits don’t change the obligation to disclose.

For example, starting a tweet with “Ad” or “#Ad” would likely be an effective disclosure since character limits are an issue.

Similarly, the FTC states that if an affiliate or influencers is posting audio or video that includes a product or service promotion that they’re getting compensated for, then the disclosure should be at the beginning of it – and in the same form; in other words, they need to include the disclosure at the beginning of the video, not just in text related to the video.

There is flexibility in the language

There are no specific requirements around the language of the disclosure. When thinking about the proper wording of a disclosure, it’s best to ask yourself, would an average reader understand that there is a monetary relationship between this blogger’s post and our company?

If not, it is likely that changes need to be made to the disclosure wording or the positioning.

Disclosures should be understood by the majority of people reading it, using clear language and avoiding legal and technical terms.

The simple term "affiliate link" would not qualify as a proper disclosure as the average consumer may not understand what an affiliate link is or what it means.

Below are a few examples of FTC compliant disclosures:
  • For a blog post that the marketer is not receiving an additional fee or bonus for posting: “This post contains affiliate links and I will be compensated if you make a purchase after clicking on my links.”
  • For a blog post where the marketer is receiving an additional fee or bonus for posting: “I was compensated for this post. This post also contains affiliate links and I will be compensated if you make a purchase after clicking on my links.”
  • For a social media post or an ad with limited space: “#ad or #sponsored”

Standard advertisements are exempt

The FTC disclosure requirements are not applicable to obvious advertisements, such as banner ads or sidebar ads. The FTC believes that most reasonable consumers understand those banner ads are paid advertisements, like the understanding that TV commercials are paid advertisements.

Always conduct audits to ensure affiliates are compliant

At AP, we conduct quarterly FTC audits to ensure all of the affiliates in our clients’ programs are adhering to the proper disclosure requirements.

If we find an affiliate in violation, we immediately reach out and provide them with information on what they need to do to be compliant.

In addition, we disseminate specific FTC disclosure reminders in all of our affiliate newsletters and remind them to double-check that their sites include the proper disclosure statements in a visible place on within their post or content.

As influencers and affiliates are continuously adding new content to their sites, it’s important to conduct regular compliance checks throughout the year.

Specific to affiliate marketing, the main thing to remember is that there needs to be a noticeable and clear disclosure listed above the content on all pages of a site that informs consumers that the marketer will earn a commission if they make a purchase through the links.

As a disclaimer, it’s also important to note that these are our interpretations of FTC disclosures based on our understanding of the FTC’s requirements and affiliate marketing. As such, the above-mentioned tips should not be construed as legal advice.

For further clarification, we recommend reviewing the information provided in the below links or reaching out to the FTC directly:

FTC's "Dot Com Disclosures" Guidelines: http://www.ftc.gov/os/2013/03/130312dotcomdisclosures.pdf

FTC's Endorsement Guidelines: http://business.ftc.gov/advertising-and-marketing/endorsements.

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Author: Heather Creamer