I’ve been involved in affiliate marketing off and on for about 8 years, and the trend towards disclosure of affiliate links in the blogosphere has been a strange situation for me. It’s not that I want to hide the fact that I’m being compensated, it’s just that if you are an ethical marketer that focuses on providing value, most people don’t really care outside of the Internet marketing world.
I haven’t done much affiliate marketing on Copyblogger, but I hate the use of (aff) following the link. It’s just bad, distracting copy, so I try to find some other way to reveal the affiliation in a way that makes sense. Other times I just give my readers enough credit to know what’s up (such as with links to books).
Now it looks like anyone who markets to US citizens will be required by law to make these disclosures or face potential action for deceptive advertising. I haven’t read the opinion itself yet, but this is what the Washington Post is saying:
The Federal Trade Commission yesterday said that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships. …
Word-of-mouth marketing can take any form of peer-to-peer communication, such as a post on a Web blog, a MySpace.com page for a movie character, or the comments of a stranger on a bus.
This is huge. I can certainly live with it, although I feel a bit offended that I’m subject to potential legal action thanks to the actions of unethical marketers who have prompted blanket sanctions against everyone involved in a legitimate industry.
But as Tony Hung also points out, this is going to potentially hurt some highly profitable, if less than transparent, affiliate business models.
Take a look at this “independent review site” that just happens to rank web hosts according to whomever offers the highest payout.
There are tons of these types of sites. Some “review” sites are gigantic, with separate subdomains for every profitable affiliate category they can build pages for. Plus what about all the “gift shop” and affiliate ecommerce models that present product catalogs before sending surfers to the merchant site?
If you’re planning to begin affiliate marketing on your blog, don’t despair. I think disclosure can be a very good thing that need not hurt your sales, as long as you create a benefit that coincides with the transparency.
UPDATE: I’ve now read the FTC opinion (PDF), and my interpretation stands. The factual scenarios are heavily tilted towards what we call WOMM, because that’s what the petition focused on. But the conclusions reached certainly apply to the forms of affiliate marketing I’ve mentioned above. The FTC has not crafted new law, they’ve said that certain practices can be construed as deceptive under existing law.
The combined practices are:
- Lack of disclosure
We in the Internet marketing industry may view WOMM and affiliate marketing as discrete areas, but they have a lot in common. In fact, affiliate marketers are *more* motivated to actively push the recommendation, because they don’t get paid otherwise. Speaking in terms of WOMM doesn’t change what has been said and what it could mean for affiliate marketers whose business models rely on the site visitor believing they are getting an impartial recommendation.
UPDATE 2: The real issue is not what affiliates can or cannot get away with. It’s whether the companies and affiliate networks that recruit and pay affiliates will make disclosure part of their terms and conditions due to fear of an FTC or state action.