The Law for Affiliate Marketing: Disclosures

Using Disclosures to Avoid Deceptive Marketing

Disclaimer: Obviously, this blog does not provide legal advice. How do you know? This is free. Legal advice you have to pay for.

The Basic Laws of Advertising

The Federal Trade Commission (FTC) is charged with stopping “unfair or deceptive acts or practices” in advertising. In doing so, it considers the three basic laws of advertising:

  1. Ads must be truthful and not misleading;
  2. Advertisers must be able to back up their claims (substantiation); and
  3. Ads cannot be unfair

What do these mean? Generally, any advertisement must not state untrue facts, or facts that could mislead people into believing untrue things. Basically, you can’t lie. Under this rule, even omissions can be considered misleading. So saying your new diet pill will help everyone lose weight, but neglecting to mention they will also grow fins, would be considered deceptive.

Disclosures in Advertising

full-disclosureSo how do you do this and retain decent copy? This is where disclosures come in. Disclosures are required any time you need to explain a concept more fully in order to keep it truthful. For example, your health product may need to disclose certain side effects or limits on effectiveness. Or perhaps you’re offering a 12 ounce bottle of juice. It may be a good idea to disclose that 12 ounces might mean 11.5 or 12.5 ounces, if you can’t get it exact every time.

One of the important rules to remember in affiliate marketing is that the affiliate must disclose their financial incentives. The FTC considers failure to disclose financial incentives to be a conflict of interests, and thus deceptive. Many affiliates use customer reviews, website reviews, social media posts, or other non-obvious advertising tools. All of them are still required to include the disclosure of compensation and conflicts. This is true even for free products.

Placing an Effective Disclosure

In 2009, the FTC issues guidelines regarding endorsements and testimonials in advertising. Basically, disclosures must be frequent, clear, conspicuous, and require no action.

  1. Frequent – This means that the disclosure must be included on any and all pages that may have the advertising language, whether it be a blog post, a tweet, or a testimonial.
  2. Clear – The disclosure should make very obvious that the advertiser is receiving compensation for the material.
  3. Conspicuous – It should begin with the word “disclosure” and be immediately easy to see.
  4. Requires No Action – You can’t hide the disclosure in a link. Also, the disclosure should be right up front and the user should not need to move the page or scroll to find it.

Disclosures in Social Media

Disclosures are required any time an affiliate is being paid for their referral. This includes reviews, blog posts, and social media. It is even required when there is a character limit like Twitter. Try using hashtags like one of these:




[callout_box bgcolor=”#e0dede” boxed=”yes”]Don’t use #spon The FTC has already said that’s not sufficient.[/callout_box]

And Now You Know

You can read it from the FTC themselves in the link below. Now that you know everything there is to know about disclosures, I am sure you will have no problem acting on it. Of course, if you do have more questions about your particular ads, then think about speaking with an attorney. Better to avoid a lawsuit than avoid an attorney.

FTC – Disclosure Guidelines

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