Note: I’m not a lawyer, I don’t play one on TV, and this ain’t legal advice. But every jackass out there has an unsubstantiated opinion based on anything but expertise or qualification, and this happens to mine…
As many of you have probably heard, the FTC recently enacted some new advertising standards that directly affect internet marketing in general - across the whole board…
And this will impact basically every offer, presell and affiliate “review” you create from this point forward.
Namely, it deals with:
* Compensation Disclosure, and
* Honesty about Average Results
In summary, the new guidelines state that 1) you have to clearly disclose that you are either being compensated or have a vested interest (commissions) in the products, services or otherwise “stuff” you feature in ANY of your content, and 2) whenever you make claims about an offer - or publish testimonials - you have to either clarify or verify what the actual, average results are for an average user of the product.
This means that if you’re promoting, say, some sort of Forex trading offer or whatever and you’re telling your visitors that they can make “$10,000 a week!” or whatever the case may be - you actually have to back that up with verifiable proof that making 10 G’s a week is what the AVERAGE USER can expect.
And the same goes for using testimonials. You can no longer “hide behind” a blanket disclaimer at the bottom of the page that effectively sweeps responsibility under the rug.
From what I can interpret from the FTC guidelines (and it’s pretty vague), you can still use your showpiece testimonials that are NOT average, but instead of just saying “results not typical” or “results may vary” - you have to outright provide the *actual* average results in very close proximity to the testimonial.
Something like: “This user experienced substantially above-average results with this product. The average user can expect ___________”
(You can read a more in-depth take on the testimonial issue on Frank Kern’s blog, by the way…)
To be safe, I would honestly avoid using “crazy” testimonials that make huge claims - or list specific figures. I’ve never really used testimonials that much anyway, and sales have certainly been okay without them. Maybe there’d be a slight increase if I did include them, but not if I’m at risk of dealing with the Feds.
What it boils down to is that you’ve got to be authentic and realistic with your marketing. Even if your “average result” is far less than what’s possible if people actually TRY or WORK, you need to convey that clearly. What I would be inclined to do as a vendor is to survey the different “levels” of my customers and showcase those as well.
So it would be something like:
* Average Result of Using Widget Overall = 2
* Average Results of People Who Buy This and Do Nothing = 0, Which Comprises 70% of All Customers (or whatever)
* Average Results of People Who Exerted a Medium Effort With Widget For Less Than 2 Weeks = 5, 20% of Customers
* Average Results of People Who Properly Applied Widget & Persevered Long Enough to See its Effects = 50, 10% of Customers
Now, I don’t know if that’s legal or not, or if you can only show overall average results - but in the interest of total transparency, I don’t see how “laying it out” like that would really hurt your sales that much. It may detract some of the dreamers, but those usually turn into sob-stories or refunders anyway.
The customers you really want to work with and sell to are motivated, serious, honest and discerning - and they are drawn to sales copy that is conveyed as such (honest, discerning, straight-up).
So in some ways, I see this as a *potentially* positive change, although any time the Government interferes with the free market, it’s usually the equivalent of asking a retarded Gorrilla to fix a swiss watch (as in, I’m sure the impending “federal carpet bombing” that’s about to take place will do exponentially more harm than good).
For example, when it comes to marketing information products - there truly is NO “average” result, since the results are entirely dependent on the individual, their own capabilities and confidence-levels, and their situation. This presents what some are calling a catastrophe in the making. (See Michel Fortin’s recent post for details).
The FTC says that it’s all going to be evaluated on a “case by case” basis… but all I can think about is a retarded Gorilla smashing a Rolex into the ground. Case by case or not, I’d hardly rely on the objectivity and logic of FTC employees (or crooked politicians looking for a public flogging to help their latest “campaign”).
All the more reason to stay conservative - and stay on top of the FTC’s inevitable clarifications to their emphatically vague guidelines.
So what does this all mean for US?
And what about strategies like “The Conduit Method”?
This is my take on it - and you can ask your lawyer to clarify/correct this for you, because this sure as hell is NOT legal advice or anything near it…
Basically, as an affiliate who is simply promoting a product, you need to do two things:
1. Clearly disclose your relationship with the merchant(s). Let your visitors know that you stand to profit if they buy through your site. You should have a message stating this on every page of your site, and I’d suggest placing it by the offer links as well. Don’t just “tuck it away” in your TOS.
This includes your blog posts, your “tweets”, your forum signatures, your review sites - everything. Call a spade a spade. Like I mentioned above, the only people this should detract are customers that you - or your vendors - probably wouldn’t wanna touch with a ten-foot caddle prod anyway. (There’s a good article on TechCrunch that explains more about the specifics of what is required for social media in particular…)
2. Be Factual, Honest & Conservative. Especially when it comes to using “snippets” from other reviewers, forum posts, and otherwise user comments. Clearly specify that the user comments cited or compiled are in no way indicative of any kind of verifiable results - and that all visitors are strongly cautioned to conduct their own due-diligence prior to making a purchase of any product you profile on your sites.
Also make it clear that you are simply a product researcher who is simply going off of what other users have posted around the web - which may well be completely inaccurate.
State this clearly. Again, it shouldn’t do anything except add credibility to your sites, anyway.
When it comes to making recommendations or using “strong” marketing verbage, I would be very careful about that unless you can back stuff up from your own experience with the product (and have verifiable proof to do so). Even so, you’ll need to make it clear that average user results are more than likely much less than what you experienced.
Beyond that, I really don’t know what to tell you.
I think this will weed out a LOT of marketers who’ve been using “fake comments”, false testimonials and stuff like that to create artificial social proof.
I also think that, in the long run, this is GOOD for people who offer value (ie. affiliates with authentic content), and BAD for people who look for shortcuts and easy money.
It may also be cause to seriously look at the offers you’re promoting and ask yourself… does it really work as stated?
So maybe this is a shake-up that’s long overdue.
No, the sky is not falling and this is far from being the end of affiliate marketing - but play it safe.
You really don’t want a big, retarded, over-eager Gorrilla kicking down your door.
-Chris
111 responses so far ↓
1 Bob // Oct 9, 2009 at 7:29 pm
If I hear a knock at the door, I’ll makes sure to hide in a closet.
Any update on Affiliate Armory launch? I am ready!
2 David // Oct 9, 2009 at 7:49 pm
We all have to pay our dues.
Just follow the rules and you are safe to make tons of money…
3 Cedric // Oct 9, 2009 at 7:55 pm
Let’s see if the TV commercials comply first - that’s where if this is real, you’ll see changes there first.
4 Brad Gile // Oct 9, 2009 at 7:55 pm
Hey Chris,
Good post. I think a lot of people are really starting to panic over this but as long as you stay honest I think everything will be ok. (and play by the new rules)
Like you said, only the people that create fake blogs and other fake affiliate promotions will need to worry.
Plus, I feel that pretty shortly this could be a good thing for some affiliates. It sucks having to explain that you’re making money from your links but it looks more honest which will separate you from the others out there.
Just my 2 cents.
-Brad
5 Will // Oct 9, 2009 at 7:56 pm
Before you all start closing down your affiliate sites, I think it is important that you read the latest update from the FTC regarding this issue. There has been some confusion over the whole thing so yesterday FastCompany interviewed the FTC representatives to clarify some of it’s rulings.
Check out the update on Michel Fortins blog at:
http://www.michelfortin.com/affiliate-marketing/#update
Chris, maybe you can publish some of this or link to the update in your article above for those that don’t see this comment.
Thanks
6 Gavin // Oct 9, 2009 at 7:57 pm
Hi Chris,
I’ve got the conduit method, vip essentials, and confessions, and am in the process of putting it all together now.
I’d love to see an example of how to deal with the compensation issue on a conduit blog. I obviously will not take it as legal advice, i’d just like to see how you are approaching it.
Thanks
7 Nando // Oct 9, 2009 at 7:57 pm
Hey Chris,
Very poignant and well laid out. This explanation of the situation works well in conjunction with Frank Kerns’ explanation.
Thanks for taking a professional approach and showing enough concern to reiterate these important events.
To your continued success
P.S. Gorillas in the midst?
8 Jay | WA Platinum // Oct 9, 2009 at 8:01 pm
Any info on how this affects affiliates outside of the US? I think this is both a good and bad situation for different reasons.
Good in the sense that people will be more careful with their hyped up reviews and misrepresentations of a product and bad because I don’t like how they’re policing the internet as if we couldn’t be more accountable to ourselves as marketers.
9 Pat // Oct 9, 2009 at 8:04 pm
Good post, Chris.
I agree this will weed a lot of marketers out. Namely the unethical ones which is a good thing.
What I don’t understand, though, is exactly how to disclose the relationship between myself and the vendor.
The guidelines say that the disclosure can be placed at the discretion of the blogger so I’m a little unsure as to where I should be placing it and also if I should use a larger font or highlight it or something like that.
Have you thought about how you’re going to display it?
10 canuck // Oct 9, 2009 at 8:06 pm
Does this whole thing affect Canadians?
FTC is a US body right?
11 Dan Grossman // Oct 9, 2009 at 8:09 pm
I really don’t like scare mongering.
The $11,000 fine threats are scare mongering and not true.
Richard Cleland, assistant director, division of advertising practices at the FTC has said:
“That $11,000 fine is not true. Worst-case scenario, someone receives a warning, refuses to comply, followed by a serious product defect; we would institute a proceeding with a cease-and-desist order and mandate compliance with the law.”
“Disclosures can be made in different ways, whether you make it outside of the text but in proximity to blog, or incorporate it into the blog discussion itself–those are the issues that bloggers will have discretion about.”
“We’d alert Web sites to potential problems and then invite them to contact us about questions of compliance.”
12 Miranda // Oct 9, 2009 at 8:11 pm
Oh Chris, that was a great post!.
Since it was first announced a couple of months ago, the people I have asked have all poo-pooed it and said Frank’s post (was it Frank first or Perry? …can’t remember) was a bit of a storm in a teacup. I didn’t think it was because there certainly are a load of really dishonest review sites out there - as we all know!
Your post has been very helpful - thanks.
13 Dan Grossman // Oct 9, 2009 at 8:12 pm
FTC Responds to Blogger Fears: “That $11,000 Fine Is Not True”
http://www.fastcompany.com/blog/jennifer-vilaga/slipstream/ftc-bloggers-its-not-medium-its-message-0
14 FTC’s New Advertising Standard | Affiliate Radio // Oct 9, 2009 at 8:19 pm
[…] Rather than bore you with the details, read Chris Rempel’s post entitled The Sky is Not Falling. […]
15 Greg // Oct 9, 2009 at 8:19 pm
Hey Chris,
The Gorilla image, cracked me up.
Any link to the FTC rules?
Thanks,
Greg
16 Cynthia // Oct 9, 2009 at 8:20 pm
Chris,
I actually think this may be a good thing. It creates accountability & will HOPEFULLY stop the marketers who sell theory-based products disguised as the methods they used to make their online fortune. Then they’d have to disclose, “The average user can expect to make squat!” And perhaps it will slow down those commission hungry affiliates (Guru’s included) who jump on board to praise worthless junk as the greatest thing since sliced bread when they never took a look at it themselves. Even though I don’t like the idea of the Govt intervening, I do think this make $10,000 in 24 hours hype that is so prevalent in IM now is getting to be a little bit too much & needs to be reeled in.
17 Ryan // Oct 9, 2009 at 8:24 pm
http://www.convert2media.com/blog/2009/10/09/ftc-11000-fine-for-bloggers-is-false/
18 Richard // Oct 9, 2009 at 8:25 pm
Any idea or opinion on whether, how and to what extent this might affect network marketing distributors?
I assume it will be similar talking about the income opportunity - but how in the world can you talk about an average of earnings for all MLM distributors?!
And what about presenting the features and benefits of the product? If some product should help someone’s health, to varying degrees, in general, but that hasn’t been proven medically or scientifically, or verified by the FDA, is it sufficient to say as much … that “This is not meant to diagnose, treat or cure”, and that “These statements have not been evaluated by the FDA” … or whatever?
Thanks,
Richard
19 Rahul // Oct 9, 2009 at 8:31 pm
Thanks Chris..Does it mean I need to modify the existing blogposts or does it apply the future blog articles?
20 Charles Peavy // Oct 9, 2009 at 8:32 pm
History tells me there will be a concerted attack on free enterprise itself. And this ‘concern for consumers’ by the FTC is the beginning. Its “unfortunate” the SEC wasn’t concerned enough to insure the safety measures that would have prevented “lenders” from destroying our economy.
21 Jay // Oct 9, 2009 at 8:35 pm
Internet marketers have gotten away with so much crap.
In particular with health products.
It was when my mom asked me about this “resveretrol thing” she saw online, how it was “endorsed by Dr. Oz”, how it was “free”, so long as she paid S&H. She almost put in her CC, but decided to ask me about it first.
To see my mother on the other end of that scam put the situation in a new light.
There have always been a subset of marketers with sleazy tactics. And people have always had the choice to avoid them or submit their gullibility.
With internet marketers it’s technically no different. But I think IMers come with added responsibility, which is being abused. The internet is a less transparent medium. You can make unsubstantiated claims and hide behind the veil of anonymity. You can claim your professionally-designed product was endorsed by Oprah, while you sit in your boxers behind your computer, having never met the woman, solely concerned with that psychological high you get from every email with the subject line: “You’ve made a sale!”
In a sense, the FTC rule is bullshit and a violation of free speech. In another sense, it might put some money-leechers, who provide nothing to society, in their place.
Either way, I have a question. How exactly does the FTC plan to enforce this vague rule? Almost a decade worth of web content is in violation of this rule–are the owners now required to go back and make changes?
22 Rex // Oct 9, 2009 at 8:35 pm
While I applaud the idea of getting rid of ridiculous flogs (lies) and unethical marketing, usually attempts by the government to handle situations such as this fall short. It is tantamount to gun control where only the law abiding comply and criminals find guns anyway.
So it is easy to predict that in the future we will find more networks and affiliates moving out of the US so they can keep up the unethical (but profitable) behavior. The “Federal” trade commission has no teeth overseas.
Just another hurdle to jump but we’ll get over this one too.
Rex
23 Concerned // Oct 9, 2009 at 8:42 pm
Chris,
It sounds as though the FTC is taking aim at the wild claims of products that claim to make money - like the Internet Marketing and Forex type products. How on earth can we prove someone got rid of a yeast infection? - can someone really try to sue, if their infection did not go away? How can we even know such a person followed the instructions? This does sound like a disaster in the making. I am going to go an retrofit all sites with appropriate language as you recommended. Thank you for the very great post about this.
24 Bob // Oct 9, 2009 at 8:44 pm
Chris, Thanks for sharing this as I was under the impression the law was mostly for paid bloggers giving reviews for compensation.
It certainly makes me look closer at any products I promote and I just hope it doesn’t turn into a witch hunt.
Bob
25 Harry // Oct 9, 2009 at 8:47 pm
The FTC proposals should have been implemented long before all the *Get-Rich-Quick* BS got a hold, complete with solicited testimonials and false income statements. What some do not seem to appreciate is that making false declarations to derive financial benefit amounts to fraud. Fraud has always been a serious offense. This also applies to Clickbank’s liability too - and yes. I do have a law degree.
26 NEW FTC Affiliate Marketing Guidelines: Can A Retarded Gorilla fix a Swiss Watch? : Michael's Online Success Blog // Oct 9, 2009 at 8:55 pm
[…] I understand it, (and as Chris Rempel states in his blog) in summary, the new guidelines state […]
27 Howard // Oct 9, 2009 at 8:59 pm
This is great info and many affiliate should take this seriously.
28 John // Oct 9, 2009 at 9:18 pm
Well I hope they go after Dish network scammers first!
29 Norman // Oct 9, 2009 at 9:19 pm
There being so much dishonesty and double dealing around the net these measures are probably overdue. No doubt though anyone outside the US will escape attention (at least from the feds) so there is likely to be lots more dubious claims still being made in the future!
30 jeremy // Oct 9, 2009 at 9:19 pm
If the FTC is going to do this, then they should extend this to TV, infomercials, radio, mail order,
display ads ect. Not just on the internet.
All the other forms of media make big claims too, without saying what the results are of the typical user is.
31 Robert // Oct 9, 2009 at 9:23 pm
Hello,
Is there a sample for me to see how to disclose my relationship with the merchants or “disclosure compensation”?
And where should I put the “disclosure compensation”? On the footer of my website?
Thanks!
Robert.
32 Steve // Oct 9, 2009 at 9:28 pm
The big problem with this is that it immediately gives every website outside the USA a HUGE advantage over us because they will still be able to use specific testimonials whether they are bogus or real.
33 Options Trading - Tony // Oct 9, 2009 at 9:29 pm
Yup. Just cleaned up one website. 20 more to go.
Good point. They will be looking to make examples of people - whatever their motivation is. Who cares. We need to play the game. And work with them while also letting them know that they should protect the business owner as well since we are the ones who provide jobs and income to the ‘consumers’ they say they protect.
But overall this is good, in a way -this will clear up many advertising spots and help keep those click costs down.
Once you get big it’s a very good idea to hire a lawyer or two.
34 Options Trading - Tony // Oct 9, 2009 at 9:31 pm
Oh and thanks Chris. This article here made the most sense of all that I’ve read - really
35 Michael Canfield // Oct 9, 2009 at 9:52 pm
Hey Chris,
Truth in Advertising … its about time…
Check out http://www.JITLA.com see how merchant claims and any sales agency (affiliates) will profit in the future…
or take a look at: http://www.mysafemedia.com/Jitla/
Let me know what you think about rating actual advertising claims and other unique selling opportunities?
36 Bill // Oct 9, 2009 at 10:00 pm
Great! Another “reason” to call Obama a fascist. I’m sure this crap started long before he came into office OR some jerk at the FTC finally got enough gumption to do something about overzealous claims, and AS USUAL, the government did a whipsaw and reacted too harshly too late.
37 Geoff Slingsby // Oct 9, 2009 at 10:24 pm
Hi there…
Never heard of this before. Copied the article from TechCrunch and added them to my reader, along with Mickael Fortin’s RSS Feed.
I’m down under and like “canuck” from Canada wonder if it affects the Aussie brigade. (Haven’t met a Canadian in years).
Don’t have a problem with disclosure as when I was in direct sales of financial services products disclosure was a requirement.
Thanks Chris and yes even though I’m learning this online game it’s true that being up front gets rid of the sob story, high maintenance, refund types.
Cheers
Geoff Slingsby
38 Duncan // Oct 9, 2009 at 10:50 pm
Chris - good post, if for no other reason than to put this issue on our radar.
I think the details of what the feds will ultimately do is a way off, but getting into the ‘truth in advertising’ mind set has to be a good thing, at least for ethical marketers.
As to marketers who are non-resident in the US, I’m not so sure they will have the advantage some in these comments suggest. In technical terms those of us who fall into that category may be beyond the long arm of the US feds, but in practical terms, the American standards will become (are) the defacto standards by which American consumers will assess or guage what they see online. The US market is bread and butter to all of us, so even those of us not subject to the threat of US sanction (whatever it may turn out to be) will have to be ever mindful of US standards in this arena.
I havn’t read what Frank Kern has to say about this issue, but given his experience with the Feds, I wouldn’t too readily discount what he has to say.
Keep up the good work!
39 Mike // Oct 9, 2009 at 11:07 pm
As pervasive as this is does anyone actually think the FTC will be able to enforce it?
This is a small brush fire compared to the many forests ablaze in the country so I don’t see the government allocating the time, money or resources to tackle it.
Maybe if what you are doing is so blatantly raising red flags you should be worried, but for the vast millions who would come under this, I doubt they have much to be concerned about.
40 Mike // Oct 9, 2009 at 11:19 pm
Oh, and I would expect you should all get ready for the marketing and launch of a new program or programs that will address this non-issue. Watch and see.
41 Paul // Oct 9, 2009 at 11:19 pm
Really, I don’t understand why people are freaking out! Surely you’re not deceptive in your campaigns??? You’re not trying to pretend to be someone or know something and convey that information to someone purely on an altruist level but at the same time, collecting a hefty commission?
As far as I see it, if you practice “deception” in making your scratch, then you’re probably feeling the heat right now! If you’ve taken a moral stand to a) promote offers of “real” value and b) are forthright in your promotion, then there’s nothing to worry about.
I have absolutely no problem in disclosing any association, financial influence and the like. Why? because I won’t promote crap, I know what I’m doing, so I’ll get x uniques per day and I will convert regardless!
When I go into Best buy and the sales guy has listened to my concerns, understands what my “NEED” is and recommends a product that meets my needs, I don’t leave with the sense that “that dude was just trying to sell me the highest commissioned product”. If anything, I’ll go away and tell anyone who has a similar “NEED”, to go and see Frank @ Best buy!
Yes the argument can be made that the “Hot KY Jelly” couple on TV aren’t really a couple and that’s a level of deception but it’s a commercial… you know it’s a commercial… you’re not watching some National Geographic episode that expounds the holistic healing power of KY Jelly! Get my point?
42 Greg // Oct 9, 2009 at 11:22 pm
Everyone on the web, who is selling something, is gaining something by it. If Wal-Mart sells a book or a toothbrush, then everyone and their dog knows that Wal-Mart is only doing so because they make a profit. The web is the same, it’s a big store, and any time you buy something off the web, or take someone’s advice to buy somthing off the web, the person who owns the website, or who stears the customer to the selling site, gets paid. Only a MORON in Washington DC would think that those actions online would require a disclosure.
ps. Probably some politician in DC who’s thingy didn’t really get bigger when he bought some Cialis… Why do people have to be protected from themselves? LOL
43 BILL // Oct 9, 2009 at 11:30 pm
Thanks Chris, Damn Gorillas.
44 Duane at Aquarium Fish Tanks // Oct 9, 2009 at 11:45 pm
What my take on this topic is one thing and one thing only. Build your sites ethically and honesty, follow the correct white hat standards and you should be fine. I agree with Dan G, the Gorilla will not come beating on your door and lock you up forever on a deserted island feeding you bananas. They would first contact you and let you know what is up. But as long as you comply with the rules, what is there to worry about.
Hey Chris, great article and thanks for sharing it with us! I look forward to creating my own Conduit empire with your direction!
45 Mike // Oct 9, 2009 at 11:50 pm
What about sites with just adsense on them? Are they good or do we have to put a disclaimer here too.
I would like to hear your opinion.
46 chazza // Oct 10, 2009 at 12:36 am
Does this affect web sites outside the US ?
47 http://www.jobssearchengine.us // Oct 10, 2009 at 12:43 am
Chickens !!!!!!!!!!!!
Yes, that’s what you are.
What if all of us keep WORKING as nothing happened.
Who is going to sue 1,000,000 infractions every day ? All over the world ? Every day ?
$ 11,000 ? How are they going to collect them ?
Think a little…
48 Peter // Oct 10, 2009 at 12:58 am
A lot of the gorillas go under the label of gurus. If this controls their extravagant claims it has to be a good thing. Get an “offer” and your inbox suffers a bombing of spam. The new rules are in line with the spirit of Web 2. Be honest and you should prosper.
49 Mikael // Oct 10, 2009 at 1:12 am
Where can we find these FTC guidelines? Just want to make sure that it only applies to the US
50 Mona // Oct 10, 2009 at 1:27 am
Hi Chris,
Thanks for this informative article!
Is there a spesific date for when this new rules will be up and running? and what about old articles and blog posts. I suppose we can’t be expected to go into each and one to check if we need to correct anything.
I agree that in the long run this is good.
Mona
51 chris // Oct 10, 2009 at 1:29 am
Will this only apply to the USA. What about UK or Thailand. Is any advertising anywhere truthfull anyway. I think its too big an area to police.
52 Mona // Oct 10, 2009 at 2:30 am
Hi again,
I suppose we all need to do some work. We should all have a policy for our blog - I found this useful page: http://disclosurepolicy.org/
Here you will find help with making a disclosure:
What is disclosure?
The act of making something obvious. Disclosing (divulging or explaining), the purpose and interests of a blogger in his/her published posts: written, audio or video.
Here is another interesting blogpost “Disclosure on Old Posts? DPs to the Rescue “: http://blog.disclosurepolicy.org/
I am already working on my policy.
Mona
53 Jeff // Oct 10, 2009 at 2:45 am
What about non-us affiliates? Does FTC have a power to fine or shut down our sites?
54 Sebastian // Oct 10, 2009 at 2:48 am
Luckily for me i live in Europe.
Guess i should swipe all the landing pages there are and promote the products since nothings gonna happen to me even if i break the FTC rules.
55 Dan B. Cauthron // Oct 10, 2009 at 3:23 am
No fear here - a direct result of living and operating on top of the table, even when no one has been forcing me to do so.
56 Jeff // Oct 10, 2009 at 3:25 am
I ‘m going to follow the new FTC rules, even if I live in Europe. 90 -% of customers come form US. They deserve better.
57 Al // Oct 10, 2009 at 3:36 am
In principle I have no problem with the scammers in I.M. of which there are many, being shut down but as always the devil is in the detail.
The idea that we can all put a disclaimer in a 140 character tweet is too silly to comment on and I cannot see that we are going to be judged differently from any other sector of business.
We are in the early stages of the Internet revolution and it’s no surprise that excess occurs and has to be corrected.
I agree with many of the questions above - there is no average user of an info product and we will find a way forward.
For now check all your copy and ask yourself - is this honest?
58 RichyJ // Oct 10, 2009 at 3:52 am
WhilstIi can understand the reasoning behind the FTC rules, I believe that - as usual with anything concerning policing the internet - the legislation has not been properly thought through.
As a UK marketer, I don’t see how the FTC rules will apply to me - anymore than the UK’s Advertising Standards and other cosumer protection legislation would apply to a US website.
The end result could be that US marketers lose market share to foreign sites.
And how exactly does one work out the ‘average results’ for any product, system or service? This implies that you have obtained data from all of your customers.
If you haven’t, then the data you present is not accurate.
The FTC rules have plainly been drawn up by people who have no idea how the real world actually operates.
RichyJ
59 Dave Hill // Oct 10, 2009 at 4:05 am
Hi Guys
I have read all your comments thus far. I live in the UK and, it appears, almost immune from the FTC… but thats not why I am posting this.
I am obviously in experienced and illustrious company here, but it strikes me hard that newbies, being forced into trying to earn from this Internet by our Governments lack of Brain Cells forcing us all into recession, will fall into the trap of violating these rules.
Newbies wont know of these rules! They will, however, see foreign-to-the-US websites making unsubstanciated claims on affiliates pages, and go right in, sign up and promote their clone of that affiliates page.
BANG! $11,000 [ or whatever ] fine.
Who is responsible now?
I am not anywhere near as experienced as you guys, but I see problems stretching way into the future with this.
You guys in the US are being forced to fight on an uneven battlefield..
This needs International cooperation to work, or there will be chaos.
Dave
60 Colin // Oct 10, 2009 at 4:19 am
Thanks Chris. Truly enlightening.
Nice attitude Sebastion!
61 Mark // Oct 10, 2009 at 4:41 am
Thanks for the heads up - and the subsequent comments. The positive side surely is that this is another step to clean up and support genuine Affiliate Marketing (AM). Outrageous claims diminish the effect of the genuine marketing activity. Like Spamming - there needs to be codes of conduct. And that needs teeth in order to gain compliance.
Is there a positive standard for AM yet - like a Kite mark, or a DMA endorsement, to allow genuine AMs to show their true colours?
62 Nikola // Oct 10, 2009 at 5:05 am
Good info, and I do not see this as an end to affiliate marketing, we can even use this to our advantage and increase our credibility. Since I’m from Croatia and I see a lot of Canadians and Aussie colleagues are wandering how this affects us?!
This is my take on this, if you are outside US and promote an affiliate program that is not US based, and you do not have your website hosted or registered by US based company then probably FTC can’t touch you.
However how many of us can say that, so it is better to cover ones a.., be a good boy and actually provide some value to your visitors.
63 Abhik // Oct 10, 2009 at 5:10 am
Hey Chris,
I understand placing a disclaimer in TOS about the fact that we’ll be compensated if they buy through our links etc….but about the “average results” stuff…how in the world do you even conclude what average results are when it comes to topics other than the obvious “opportunity for scam” topics like weight loss, making money etc?
I mean what the heck is the average result if you sell dog training products or dating products?
What do I say?? …” the average results you can expect from this dog training guide if you apply the methods is, your dog will typically stop shitting on the carpet and stop biting…but it’s certainly possible that your dog will still create a stink farm in your living room and may continue to try and bite your neighbors balls off!” WTF??!?
Or for dating/seduction guides? “Yes John in the testimonial slept with a boatload of women…but the average user may find himself continue to fail at pulling a single woman!”
This FTC stuff is beyond ridiculous. In most topics it’s impossible to figure what the average users results actually are anyway. I mean money stuff and weight loss is very measurable….but most other stuff can’t really be verified.
I mean what’s FTC going to do to verify…call up customers and ask..”you bought this, how to hook up chicks guide for passionate sexual encounters….well Mr Jones…how many times did you get laid last month after reading the guide…that’s right we’re verifying the results!”
Apart from me having fun…this is a serious question…what the heck do you actually write for these kind of markets??
Cheers,
Abhik
64 Tom Low // Oct 10, 2009 at 5:29 am
How about countries in asia or Singapore, will it be affected?
65 Mike // Oct 10, 2009 at 6:37 am
Is the FTC just going after internet affiliates or mainstream media as well?
I have just watched an infomercial for the Ab Circle Pro and it is total hype and the product like all those other ab machines is crap … and the users results are not typical … and it doesn’t just take 3 minutes a day. … and it doesn’t work every muscle in the body … and it doesn’t burn more calories than everything else …
Is the FTC going to hammer them?
By the way this is just my opinion of course, lol
66 Jake // Oct 10, 2009 at 6:46 am
Like every other good idea, this whole review site/affiliate marketing thing has been sullied by the jerks who have no sense of proportion. Enouhg consumer complaints and the government feels compelled to step in. Like that’s going to stop: 1)the jerks in this country, and 2) the jerks in every other country in the world.
67 nancy @ princetoncryo LLC // Oct 10, 2009 at 6:59 am
We manufacture liquid nitrogen storage devices. Is there any way we can start affiliate marketing for our products?
68 Marc // Oct 10, 2009 at 8:17 am
So if you have a purely informational html website using xsitepro, you’re not a blog and none of this applies?
69 Tom // Oct 10, 2009 at 9:06 am
The good news is the FTC is NOT nailing people with a $11,000 fine.
http://www.fastcompany.com/blog/jennifer-vilaga/slipstream/ftc-bloggers-its-not-medium-its-message-0
I do agree that they should go after mainstream commercials and infomercials as well. You know those ab machines don’t make you look like the models they portray.
70 Daniel // Oct 10, 2009 at 9:13 am
Chris, when you say “clearly disclose your relationship with the merchant”; do you think sticking a general note sidebar would be sufficient; if you use a php include for that?
71 Pellet Stove Parts // Oct 10, 2009 at 9:34 am
Not to doubt anything that’s been said here, but doesn’t this all seem a bit insane?! I’m totally against dishonesty in marketing and I do believe that being straightforward and honest w/possible buyers will weed out the disillusioned, but the thought of clarifying every statement made within a salesletter or blog post or tweet is absolutely insane! Why should we be punished for the general public’s stupidity? Sorry- had to get it off of my chest. I guess its only natural for retarded guerillas to protect their own and us swiss watchmakers are screwed. Wait… maybe I can’t say that. On average, most retarded guerillas will defend other retarded guerillas but swiss watch sales will be down a considerable percentage. I stand to make no money off of the above statement and have no way to validate my non-earnings.
72 Sandra // Oct 10, 2009 at 10:44 am
2 requests for your “opinion” please with a cherry on top!
I have one of your weight loss conduit sites, so without asking for legal advice I would like your opinion on the testimonials we have at the bottom of each page listed as user feed back. My thought is if I xxx out the amount anybody claims to have lost in pounds, would that be good for the testimonial part since it isn’t my product anyway?
I of course will add that these results are just a few gleaned from my our research and that they should do there own due diligence blah blah… and at the bottom put that if someone buys from my site I will receive compensation, blah blah or did you say it had to be next to the link? that’s kind of ridiculous as there are four on a page. What if I have a link to the bottom next to the aff link that says “see below disclaimer”. What’s your opinion on that?
Glad to hear we’ll probably get warned first with request to change before being fined. Whew!
Thanks for your help!
Sandra
73 Carole // Oct 10, 2009 at 10:51 am
Well, the CanSpan act has certainly worked to reduce the body part enlargement, luxury watches, and all the other crap email that seems to slip through the system - hasn’t it? Yeah right.
I know the target is the fake blogs - but they’ll never get those people - just like they can’t stop all the spam emails.
Probably the trigger will be a complaint of some type - and then you’re up a creek without a paddle.
I’m most concerned about what Frank Kern and Michael Fortin have called ‘rogue affiliates’. We can’t humanly check every affiliate’s site for compliance, yet we might be liable for what they do or say?
That’s why companies like Melaleuca (sp?) do not allow you to mention their name, or make any claims, or use any advertising without their specific approval. That really ties your hands. How can you recommend a product if you can’t give the name or talk about results? And even so, how can they possibly monitor all members?
74 Sandra // Oct 10, 2009 at 11:30 am
Now that I’m thinking about it and reading the referenced articles from your post, what about just some asterisks next to the affiliate link with the explanation below will suffice, just so it looks less tacky. Your opinion?
Saadra
75 Daniel // Oct 10, 2009 at 12:24 pm
I’m wondering if this affects me at all. Sure, I’ve made the necessary changes, but this is the FTC; an American governmental agency, and I’m a citizen of the United Kingdom; surely I’m just a little bit outside their jurisdiction?
It’s not just the Internet that’s home to outlandishly ridiculous claims and falsified results anyway. Newspapers, TV, magazines are just the same.
Grrrrrrr >_<
76 Mark // Oct 10, 2009 at 1:02 pm
Let’s be honest, there is a huge industry out there built on lies and hype; faked up testimonials, faked up pictures of Clickbank earnings, fake claims about easy earnings, fake claims about businesses that make thousands of dollars a few weeks after they start up - I could go on and on…
If Internet based businesses are ever going to shake off their Snake Oil Salesman image then the industry needs to clean itself up someday so what about making that day NOW?
77 stevieod // Oct 10, 2009 at 1:12 pm
The operative word here is ‘responsibility’. Internet marketers who are upset about the the new FTC rules and regulations are those who are shady scammers and unethical con men.
I myself fully embrace the new FTC rules and regulations, as this will enable honest, ethical internet marketers such as myself to now actually make money.
So if you aren’t comfortable with being upfront, honest and ethical and being totally transparent to your customers, then you have no business sense.
Read the new FTC rules and regulations, though Americans being Americans, that’s not going to happen. Something to do with illiteracy and ignorance I suppose.
But read them anyway, and you will see that all this noise is nothing but Chicken Little crying “the sky’s falling, the sky’s falling!!!”.
78 Canuck2 // Oct 10, 2009 at 3:10 pm
Although the FTC is an American body and would have a more difficult time enforcing fines on international residents, don’t forget that they could probably have your host shut down your site or block US IP addresses from accessing your site…especially if your host resides in the US.
79 Tracy // Oct 10, 2009 at 4:08 pm
Marketers may as well say that the “average” user will spend more money than they ever make. You can’t be average and successful at the same time:
Main Entry: average
Part of Speech: adjective
Definition: normal, typical
Synonyms:
boilerplate, common, commonplace, customary, dime a dozen, everyday, fair, fair to middling, familiar, garden*, garden-variety, general, humdrum*, intermediate, mainstream, mediocre, medium, middle of the road, middling, moderate, nowhere, ordinary, passable, plastic, regular, run of the mill, so-so, standard, tolerable, undistinguished, unexceptional, usual.
Antonyms:
abnormal, atypical, exceptional, extraordinary, extreme, outstanding, unusual
Tracy
80 Harry // Oct 10, 2009 at 4:51 pm
It is a poor reflection on society to note the majority of comments on this blog actually support the promotion of falsehoods, dishonesty, and outright fraud. The FTC is definitely needed. As for the UK we have Trading Standards and a Police Force to prevent criminal activities. Furthermore, Clickbank and others will be forced to ensure compliance, regardless of where you are in the world, you will ALL need to comply. PS. Good for you *Stevieod* for the best comment.
81 FTC’s New Rules for Marketers – Do You Know What to Do? | Building from Nothing // Oct 10, 2009 at 5:00 pm
[…] The Sky is Not Falling – But this is Definitely a Game Changer […]
82 Mark // Oct 10, 2009 at 6:10 pm
The comment from Harry is right on the money; in the UK they have strong consumer laws enforced by the Trading Standards Officer in each district and none of this stops honest people earning an honest living from an honest product.
The whole world of hype and dishonesty among Internet Marketers has become like an arms race where everyone has to outgun and out-lie their competitors to try and secure business supremacy. As with everything else in life though the real wins come from building trust and value in relationships with others whether that’s friends and loved ones or a customer that buys a Clickbank e-book from you.
83 admin // Oct 10, 2009 at 6:18 pm
A couple things…
1. The government has a tendency to shoot first and ask questions later. Just ask Frank Kern - there was no “warning notification” in his case. Not only did they fine him a crapload of money (six figure fines), they also shut down his business AND seized all his assets (customer lists, etc)
Remember, all it takes is for one government agent who’s having a bad day or something to vent all of their frustrations at a visible “target”.
This isn’t about ethics as much as it’s about the letter of the law. Most affiliates are honest and ethical, and only promote “good stuff”.
But all it may take is one complaint…
2. Being Canadian myself, I personally know of marketers and businessmen up here that have been hauled down to the courts in Washington and had their asses federally handed to them.
In fact, one guy (now a retail store owner) in Kelowna used to be in the direct mail business. They were selling supplements, and the FTC went after them for the usual stuff…
He ended up getting fined about 600K , not including the 20K in legal fees.
Bottom line - don’t think you’re immune, and don’t “trust” that the feds won’t shoot first and ask questions later.
Happens all the time.
-Chris
84 New FTC Rules about the Use of Testimonials | Gary Harvey Blog // Oct 10, 2009 at 6:24 pm
[…] http://www.thelazymarketer.com/blog/2009/10/09/the-sky-is-not-falling-but-this-is-definitely-a-game-… […]
85 Simon // Oct 10, 2009 at 6:46 pm
What exactly does ‘FTC’ stand for? I suspect it’s some USA body that has little relevance on the the vast majority of us who live elsewhere in the world and are not bound by US restrictions.
Why would I suspect this? Because virtually any reference on the web to things with the assumption that it’s universal means its really only a US citizen thinking he/she represents the world. Only USA citizens seem to think USA = World. Most other citizens have a broader field of reference.
BTW, don’t take this as some gripe or attack on good ol’ USA. It’s not. I go there regularly and have good friends there. I’m just pointing out a cultural blind spot that they seem to suffer.
86 Brad // Oct 10, 2009 at 7:24 pm
I know that if you are in a competitive niche and your competitors see that you’re faking up everything you do expect a lot of complaints coming from competitors to draw attention to your actions.
87 Norene // Oct 10, 2009 at 7:57 pm
As a relatively new IM, I am happy to see anything that will ‘encourage’ marketers to be honest. I’ve lost a ton of money to the hype, before learning how to research and discern what is real and what is not. As an IM myself, I have always tried to be as honest as possible. I see every person as a possible long-term customer, and I try to treat them accordingly. Thanks for the post, Chris. It is good to be in-the-know. -Norene
88 Ken // Oct 10, 2009 at 8:27 pm
“Chickens !!!!!!!!!!!!
Yes, that’s what you are.
What if all of us keep WORKING as nothing happened.
Who is going to sue 1,000,000 infractions every day ? All over the world ? Every day ?
$ 11,000 ? How are they going to collect them ?
Think a little…”
Right. Exactly.
Ethical marketers police themselves. A good thing? When the govt steps in it’s very rarely a good thing.
I do not condone flogs, etc. But all this uproar over flogs makes me think of TV commercials, infomercials, etc.
Fake people. Fake stories. Fake, fake, fake.
What’s the FTC gonna do?
Have the producers scroll a disclaimer across the screen while the fakemercials are rolling?
HA. You kidding me?
I’ll do business as usual and the hypocrits can give me a warning, first. Then I’ll do something.
Come on, people. Get a pair.
89 Carlos // Oct 10, 2009 at 9:29 pm
How does this affect affiliates outside the U.S.? Are they also covered by this?
90 Mike // Oct 11, 2009 at 2:56 am
So when does your new product come out Chris that will save everyone from the 10 million federal agents they would need to police this?
Get real. Those who blatantly are doing something wrong could become targets. For the other 99.9% doing business on the internet you can proceed as you have been. This is just a bunch of scaremongering to set you up for a new product that I am sure is already in the works. Right Chris?
91 admin // Oct 11, 2009 at 3:04 am
Wow, Mike, you’re so clever.
And wrong.
I’m working on affiliate armory, which you can see at AffiliateArmory.com and then tell me if it somehow fits into your stereotypical prediction.
And you, my friend, need to “get real”.
Check out who the FTC has sued on sites like PACER or even their own press releases.
It’s not just the blatant crooks.
It’s honest businesses that have had rogue affiliates, fake complaints, etc.
So whenever you decide to graduate from the typical “I hate gurus” mode and start treating this like a real business, you will clearly see that this is anything but fear mongering.
I posted this as a simple heads-up for my clients.
The only “vested interest” I have in doing so is a continuing effort to build trust and provide helpful content.
If there’s any more life-changing insights that you’d like to share, go ahead.
-Chris
92 Daniel // Oct 11, 2009 at 6:06 am
I’ve made the necessary changes, and to be honest, have no problem in doing so. I don’t try to hide anything and am honest in all that I do. If this just helps add that extra layer of transparency and credibility; I say bring it on.
93 The Mad Webmaster // Oct 11, 2009 at 7:52 am
I’m not going to even comment on Mike’s comment.
Anyone with a lick of sense knows better.
Thanks Chris for the heads up. For the rest of the world, you’ll have to excuse us Americans for about 3 more years as we have to deal with a Socialistic invasion and the change we did not count on.
The masters of deceit have decided to lecture the rest of us about deceit as a slide of hand for getting into our pockets but we will soon straighten this out.
In the mean time “cover your asses” is the best legal advice anyone can give who’s not part of “legal man’s world”.
This isn’t about ethics or fairness, it’s about money grabbing since no new taxes was the promise of the year.
If you don’t earn much money on the net you have nothing to fear. If you earn a substantial income, you might want to take that target off your back by listening to this “heads up”.
All the best,
“The Mad Guy”
94 The Game’s Changed for Affiliate Marketers | The Affiliate Marketing Undergrad // Oct 11, 2009 at 1:27 pm
[…] the Jason Gazaway’s Bloggers Payback launch up over the last few days and I JUST read this post and this post […]
95 Finch // Oct 11, 2009 at 7:04 pm
Meh, you might want to read this:
http://www.fastcompany.com/blog/jennifer-vilaga/slipstream/ftc-bloggers-its-not-medium-its-message-0
It’s not something to lose any sleep over.
96 Simon // Oct 11, 2009 at 8:27 pm
I gather this is only relevant to the USA and its citizens, not to the larger world.
97 Dax // Oct 11, 2009 at 8:39 pm
Simon,
Good point, I’m in Malaysia but I will be putting the recommendations up anyway. It may only apply to the US but if your server is in US, your hosting company may be worried. It is just a simple change.
98 Richard // Oct 12, 2009 at 2:42 am
Its ok having to clean your own sites up, but how about sites like Squidoo & Hub Pages that have tons of pages that include direct affiliate links … who is liable for those pages, Squidoo or the author … what about promotional vids on You Tube, or articles distributed to directories or blog sites? This is a nightmare … a marketer could have his name on content all over the web that is beyond his control now!
99 Miranda // Oct 12, 2009 at 3:55 am
Does this affect us marketers in the UK - even if we promote stuff in the US?
100 FREE 10-page Income-producing e-book // Oct 12, 2009 at 4:20 am
You may well have hit the nail on the head when you say that this will clean up a lot of unsproupulous marketers. Unfortunately, it will also clean up a lot of honest marketers and make life much more complicated for those that are honest.
I suppose this applies in many other scenarios in this world of ours, where the majority have to pay the price for the minority that don’t know how to follow the boundaries of what they are doing, thereby stuffing up things for the rest of us.
Thanks for sharing your take of the new laws and regulations, even with your disclaimer that you are not a lawyer. I wonder if lawyers know all the answers? Did you check that your disclaimers apply to average people only, and not to everyone else? (Sorry - I couldn’t resist adding that
Have a great day !
101 Tank Johnson // Oct 12, 2009 at 5:54 am
HI,
Being a firm believer that the FTC is an arm of Homeland Security and several other therories. What happens if I as a UK resident, using a server in the USA sell to a client in JAPAN???
like an awful lot of people I dont think the FTC has quite worked out how the internet works….
having saud that here is an outstanding link to help you put up a disclaimer… nothing to do with me but it seems to provide a nifty set of detailing the relationship between yourself and what you promote.
http://disclosurepolicy.org/generator/generate_policy
Nick
102 jeremy // Oct 12, 2009 at 8:30 am
the FTC is not evil, they will give people a warning and give them a chance to correct their website,
plus a lot more discussion will occur I’m sure before anything real is done
outside of IM, how many people know what adwords are or ppc, do you think Google will say, we receive a commission every time someone
clicks on one of these ads on our serps
there are so many things they will have to work out first to make this all fair.
103 jeremy // Oct 12, 2009 at 8:33 am
a more level-headed article about this
http://www.john-carlton.com/
104 Devasish // Oct 13, 2009 at 3:58 am
I’ll always mention, I’m an affiliate.
105 chris // Oct 13, 2009 at 10:48 am
The FTC will only be going after the big guys, the ones earning big money. Most of us won’t have to worry just yet.
106 James Briggs // Oct 13, 2009 at 11:44 am
“Honesty About Average Results” - This just means that if you have a weight loss supplement and you have a testimonial on your site, the testimonial has to be realistic.
For Example: You can’t just say I lost 60 pounds using Nutri-slim. You have to say I lost 60 pounds using Nutri-slim, jogging 3 miles per day and eating only raw foods for 6-months.
That’s the example they used in the Official PDF writeup.
It doesn’t really matter what average results are for the product. What matters is that it sounds believable to them.
No one will use testimonials now.
If you wrote testimonials the way they wanted you to you would never get a single sale.
They’ve also stated in an interview that they will not fine individual bloggers $11,000. They said that they would just get an injunction and have your site shutdown after repeated warnings.
If anything an affiliate needs to worry about following the guidelines of their affiliate network and not the FTC. The FTC will probably fine the Affiliate Network forcing them to change their policies.
107 Sal // Oct 15, 2009 at 4:26 am
This will affect anyone who takes an online payment via Paypal, Clickbank, or any other online payment processor based in the USA. Of course the FTC is not going to bother with trying to chase you if you are not based in the USA. But be assured that they will follow the money, and if there is widespread offshore abuse of US law, they will simply turn off the taps by making it very difficult for you to get paid. Expect Clickbank, Paypal and others to start tightening up their terms and conditions. Once they do, and things are cleaned up in the USA (the big target market for most IMs) don’t expect US customers to pay via any other portal other than the ones they know are enforcing the rules for the FTC. As Chris and many previous posters have already said - the simple and right solution is just to be open, honest and transparent with your customers - just treat them the same way you want to be treated when you are given advice or sold something. Not a big deal!
108 BEWARE of Posting Affiliate Links on Your Blog-Part 2 // Oct 18, 2009 at 4:42 pm
[…] Chris Rempel Says-The Sky Is Not Falling – But This Is Definitely a Game Changer […]
109 Allen // Oct 20, 2009 at 5:16 am
Wells something kinda similar happened with Rimmel Mascara where Penelope Cruz was the model. They gave her false eyelashes in the advert and later had to start adding comments to the footer of the commercial.
TV has visual ‘testamonials’ although I don’t think they’re cracked on as hard as this. There are still stacks of abdominal exercise machines showing models with six packs using them… that’s certainly not typical especially if you’r downing a couple of thousand calories in cream cakes each day.
110 gonzo // Oct 23, 2009 at 9:27 am
Be carefull what you wish for….the move by the FTC is to ‘clean up’ those that are promoting fraudulant claims and sites and that may or may not be such a good thing.
What I mean is that once the government starts on the premece of ‘doing good’ it always ends up BAD!!
Like for example the postal service, Medicare, Social Security, etc….All of these started out as ‘doing good’ and now they are going broke. Beware the unintended consequences of big government and remember this “We’re from the Government and we’re here to help”
111 Edward // Oct 23, 2009 at 3:57 pm
Anyone know how you’re supposed to comply with these new FTC guidelines if you’re advertising on Twitter, Adwords, banners, etc where you have a limited space or a limited amount of characters. Google only gives you two lines or 70 characters, Twitter 140 characters and there’s not enough space to disclose that you’re getting paid.
Leave a Comment