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Rakuten Marketing Blog

Q&A: 8 FTC Disclosure Answers for Affiliate Marketing Advertisers

Posted on Mon, Jan 30, 2017 @ 12:01 PM by Jennifer Moor

Disclosure is a two-way street, meaning that advertisers and publishers both need to know about disclosures in content in order to be successful in affiliate. In this blog post expert Jen Moor provides answers on some of the most common questions advertisers have about FTC disclosures and compliance. 

All materials have been prepared for general information purposes only by a non-attorney.  The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.  If you need legal advice, please contact an attorney directly.

8 Questions and Answers about FTC Disclosure/Compliance for Affiliate Marketing Advertisers

(All materials have been prepared for general information purposes only by a non-attorney.  The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice.  If you need legal advice, please contact an attorney directly.)

Okay, so what’s the first thing I should know with disclosure?

The first thing you should know about disclosure are the “4Ps.” Outlined by the FTC, the 4Ps are a quick evaluation you can use to help identify key compliance/disclosure practices to ensure your publisher is following them.

The 4Ps are:

  • Prominence – Essentially, another way to think about prominence is, ‘Is the disclosure easily visible for the readers?’ The big thing with disclosure is making sure every reader has an opportunity to understand the conditions behind a piece of content, so that if the content is a sponsored post, the reader can easily identify what they need to know.
  • Presentation – Have you ever read something, stared for a second, and thought, ‘What did I just read?’ only to read it again and discover you have no idea what the thing you’re reading is talking about? Disclosure language should be the opposite of that confusion – visitors should be able to easily understand what the disclosure is saying without having to thumb through a dictionary every few words, or rereading the same information four or five times just to understand what it’s saying.
  • Placement – You know the phrase, ‘In real estate the three most important things are location, location, and location?’ The same rules apply to disclosures, according to the FTC — the disclosure shouldn’t be hidden in some strange location on a post, out of where a visitor might normally find it.
  • Proximity – How close is your disclosure to the publisher’s offer? If the offer is front and center, but the publisher has stuffed the disclosure in a footnote somewhere, that’s a problem. Disclosures need to be close enough to an offer or easy enough on page for the visitor to find so that there’s no question or second guessing about where the post came from – and who sponsored it.

If you have any questions about these 4Ps, be sure to refer to the FTC blog post on full disclosure.

That’s great! What should I do with that information?

While publishers have to put these rules into practice, advertisers/brands (such as yourselves) need to ensure publisher partners understand how to do that with your brand. Help your publishers adhere by setting up standards for disclosures with your brand, and ensure those standards adhere to FTC guidelines. Having terms and conditions that your publishers need to follow is a great way to facilitate compliance within your affiliate program.

That makes sense. Anything specific I should include?

There’s a lot you can incorporate within your terms and conditions, so we won’t be going over everything in this Q&A. However, you may want to include topics like:

  • Disclosures: Outlining what disclosures mean for your brand and how they should be made.
  • Privacy Policies: Use these to ensure publishers will do what they say they’re doing and will let consumers know.

The key here is to adhere to the FTC’s standards for compliance and disclosure and to make sure that your publishers are doing the same by participating in your program.

Is there anything I should watch out for?

Lots. Verbiage is a big one, and one that should be called out specifically. We discussed verbiage in the but, just as a publisher needs to be vigilant about the language that they use, your brand needs to be just as watchful.

But if the publisher uses the wrong language, aren’t they responsible?

 It’s not as clear cut, but keep in mind that the buck does stop with the advertiser. Consider this: if an advertiser has 40 publishers, and one publisher is violating FTC disclosures, the advertiser may be at fault but the publisher can get blamed if it’s apparent that they’re violating disclosure terms and conditions. However, if an advertiser has 40 publishers and 30 of them are violating FTC disclosures, that falls on the advertiser because they’re not paying close enough attention to their affiliate program and ensuring compliance.

So what happens if my program is found to violate FTC regulations? What gets enforced?

To give you a quick overview, the situation can look something like this: the FTC will utilize funnels for complaints about a particular publisher who is violating practices. These funnels could be the Better Business Bureau, a Facebook page, or somewhere else they hear about it. They look into and identify trends that they received complaints about. The FTC will then reach out to the advertiser (you) and tell the advertiser (you) to address the violations in the program. Long story short, you have the opportunity to clean up violations and get your publishers compliant – but failing to do so will result in a lot of trouble with the FTC.

Sounds serious.

It is.

Do you have any examples of cases where the advertiser wasn’t compliant with the FTC?

Sure do. A quick Google search can yield plenty of results, but two specific brands made headlines recently. One, a popular social media company that violated compliance by telling their users one thing and doing another, was iconic not just because of the scope and popularity of the platform, but because their violations also resulted in a settlement which included that the company participate in a program that would be monitored by a privacy professional…for the next 20 years! Another example was with a popular entertainment company that violated FTC regulations through influencer marketing. The case notes that the company hired influencers to promote a product but dictated that they could only talk about the product in a positive light and not show any issues or defects with the product. They also didn’t require the influencers to properly disclose the nature of the relationship between the company and the influencer, telling the influencers to place disclosures in the description of their videos rather than the videos themselves. This is a huge no-no as far as compliance is concerned because disclosure must be made in the same medium as the content that’s being sponsored.

So where can I learn more?

You can always refer to FTC.gov for any questions, or if you're looking for examples you may want to check out sites like Truth in Advertising to see examples, read case studies, and more. Additionally, be sure to continue using the Rakuten Affiliate Network resources, including the Help Center, webinars, and this blog. Finally, if you're joining us at Symposium Scottsdale this week then be sure to stop by the strategy sessions, hosted by Daniel James and myself, to learn about influencers and disclosures. If you need to register click below to sign up.

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Tags: Advertisers, FTC, FTC disclosure guidelines, Affiliate Marketing

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