Do you run a blog? Do you make money from it? If so, then listen up… Effective December 1st, the FTC is requiring bloggers to disclose paid endorsements. The price of non-compliance? An $11k fine.
Unfortunately, most coverage of this new FTC requirement has been based on the scant details in their press release, as opposed to digging into the guidelines themselves. The good news is that I’m curious enough to do it myself. With that in mind…
What is the FTC really saying?
What follows is a passage from section II.A.2. of the new guidelines, where they lay out exactly what they mean by the term “endorsement.” Note that I’ve underlined a few key passages.
The Commission does not believe that all uses of new consumer-generated media to discuss product attributes or consumer experiences should be deemed “endorsements” within the meaning of the Guides. Rather, in analyzing statements made via these new media, the fundamental question is whether, viewed objectively, the relationship between the advertiser and the speaker is such that the speaker’s statement can be considered “sponsored” by the advertiser and therefore an “advertising message.” In other words, in disseminating positive statements about a product or service, is the speaker: (1) acting solely independently, in which case there is no endorsement, or (2) acting on behalf of the advertiser or its agent, such that the speaker’s statement is an “endorsement” that is part of an overall marketing campaign? The facts and circumstances that will determine the answer to this question are extremely varied and cannot be fully enumerated here, but would include: whether the speaker is compensated by the advertiser or its agent; whether the product or service in question was provided for free by the advertiser; the terms of any agreement; the length of the relationship; the previous receipt of products or services from the same or similar advertisers, or the likelihood of future receipt of such products or services; and the value of the items or services received. An advertiser’s lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an “endorsement” within the meaning of the Guides. Again, the issue is whether the consumer-generated statement can be considered “sponsored.”
Thus, a consumer who purchases a product with his or her own money and praises it on a personal blog or on an electronic message board will not be deemed to be providing an endorsement. In contrast, postings by a blogger who is paid to speak about an advertiser’s product will be covered by the Guides, regardless of whether the blogger is paid directly by the marketer itself or by a third party on behalf of the marketer.
They go on from here to say that:
Although other situations between these two ends of the spectrum will depend on the specific facts present, the Commission believes that certain fact patterns are sufficiently clear cut to be addressed here. For example, a blogger could receive merchandise from a marketer with a request to review it, but with no compensation paid other than the value of the product itself. In this situation, whether or not any positive statement the blogger posts would be deemed an “endorsement” within the meaning of the Guides would depend on, among other things, the value of that product, and on whether the blogger routinely receives such requests. If that blogger frequently receives products from manufacturers because he or she is known to have wide readership within a particular demographic group that is the manufacturers’ target market, the blogger’s statements are likely to be deemed to be “endorsements,” as are postings by participants in network marketing programs. Similarly, consumers who join word of mouth marketing programs that periodically provide them products to review publicly (as opposed to simply giving feedback to the advertiser) will also likely be viewed as giving sponsored messages.
Yes, I realize that these are fairly lengthy quotes, but the document spans 81 pages.
Are affiliate programs subject to the FTC guidelines?
The FTC seems to be primarily focusing on getting freebies, or being explicitly paid for a positive review. But what about affiliate programs? For example, what if you review (or even just mention) a book or other product and include an Amazon Associates affiliate link?
Based on the above, it seems pretty clear to me that this does qualify as an endorsement, even if you bought the product yourself. After all, receiving an affiliate commissions means that you’re “being paid to speak about an advertiser’s product… by the marketer itself or by a third party.”
But is this really in the spirit of what they’re after? Based on my read of the document, it seems that the FTC is most concerned about misleading product testimonials, so… If you simply mention a product and include an affiliate link without stating an opinion on the product, should you be forced to disclose the relationship? Maybe so, but it seems to me like that’s going a bit overboard.
How should you disclose your relationship?
So… Assuming that you need to include a disclosure on your site, or at least on certain pages, how should you go about doing it? Unfortunately, the FTC doesn’t provide much guidance about this beyond saying that you need to disclose the relationship “clearly and conspicuously.”
What exactly should it say, and where should it go? And how specific do you need to be? Can you create a separate, linked page with a blanket disclosure statement? Or maybe put a blanket disclosure in the footer? What about sticking it in the sidebar? Or do you have to include a custom disclosure at the end of each post, disclosing your precise relationship with any and all companies mentioned in that article?
Your guess is as good as mine, because they really don’t say.