Compliance in The Affiliate Marketing Industry
Affiliate marketing is built on fostering relationships between brands and publishers — and providing something of value to the consumer such as a coupon, a special offer, cash back or product advice. The channel affords advertisers some of the best opportunities to reach consumers in a unique environment, but understanding the boundaries within which affiliate marketing operates is critical.
With evolving laws and policies from the Federal Trade Commission, networks got to make sure that their programs ar aligned with federal necessities. To provide a lot of insight into however affiliate selling is monitored by the Federal Trade Commission and ways in which marketers will keep their programs compliant, I interviewed my colleague, Jennifer Moor, who leads Rakuten Affiliate Network’s complete Quality and regulative Compliance service.
Before we tend to begin, Moor wants to remind readers that she is not an attorney, and thus this interview should not be considered legal advice. She recommends consulting your own legal counsel to work out your company’s craving for risk. Q: I recently saw a stat on eMarketer that only 11 percent of marketers are aware of or understand the FTC guidelines around influencer marketing. In your experience, has this been the case?
Absolutely. the bulk of influencers ar unaware of what the rules need. We see YouTube channels of popular influencers shut down every day for not complying with the guides. Unfortunately, most of the time, the influencer didn’t know these guidelines even existed. However, my hope is that the stat will be much higher by next year. With all the recent cases brought by the Federal Trade Commission against advertisers, we are seeing a shift in the industry around ensuring influencers are aware of what is required of them and complying with the guides. Q: If I’m AN adman that doesn't work with influencers, do I need to be aware of the FTC requirements around influencers?
Yes, as you're reading through the Federal Trade Commission web site, you'll see multiple references mentioned, as well as endorser, affiliate, publisher and influencer. From a regulation perspective, they are all the same. If there's a cloth affiliation between the adman and also the affiliate, influencer, etc., then that relationship needs to be disclosed to the consumer. Q: You mentioned disclosures. Do the Federal Trade Commission guides provide any counseled language that publishers got to use to disclose their affiliation to advertisers?
No, the Federal Trade Commission doesn't provide any specific language that you’re needed to use. They just say the revealing must be “clear and conspicuous.” They also state that it should be in unambiguous language that stands out (e.g., not using light gray font on a white background). They provide what they decision the four postscript to assist marketers:
Prominence — is that the revealing sufficiently big for customers to scan easily?
Presentation — is that the revealing worded in a very means that customers will simply understand?
Placement — Geography matters. Is the revealing wherever customers ar probably to look?
Proximity — is that the revealing about to the claim it modifies?
Q: ar disclosures the sole factor advertisers ought to bear in mind of?
No, the Federal Trade Commission Act, section 5, may be a basic client protection statute that says, “unfair or deceptive acts or practices in or affecting commerce, is declared unlawful.” This is a fairly broad statement, so the FTC issued guides for advertisers to better understand how to market products to consumers to help mitigate the risk of misperception. Some of these guides include: created within the USA labeling, environmental claims, free claims, etc.
It’s necessary that publishers United Nations agency ar selling product on behalf of a complete perceive what the rules say. More significantly, it's essential that publishers ar compliant with all the necessities for supportive claims. For example, the utilization of superlative language like “best jeans within the world” may be deemed deceptive if the claim isn't corroborated by scientific proof. Q: What happens if the Federal Trade Commission finds a program that's out of compliance?
The Federal Trade Commission utilizes completely different funnels to mine complaints, like the higher Business Bureau, their Facebook page and their own complaints hotline. In general, if the Federal Trade Commission receives multiple complaints concerning AN adman, they will send an informal communication letter.
However, if the Federal Trade Commission continues to receive complaints and also the issue is constant to occur, they'll issue a proper letter referred to as a CID (Civil Investigation Demand) that basically says they want to check all of your selling round the space of concern. At this point, advertisers can choose to quash the investigation. If the Federal Trade Commission decides to maneuver forward, they may potentially:
freeze your assets.
require you to submit all of your selling and oversight to them for following ten to twenty years. This accustomed be 5 to ten, but now the standard has been set at 10 to 20 years.
Q: And last, who is ultimately responsible for ensuring that an affiliate program is compliant?
One of the foremost necessary things advertisers got to perceive is that they're accountable for what affiliates say concerning their product on-line. The Federal Trade Commission says that as long as there's a cloth affiliation, advertisers are liable for what publishers are saying or not saying about their products.
The Federal Trade Commission conjointly says that advertisers got to create an affordable effort to observe what publishers ar spoken communication concerning their brands. They conjointly state advertisers ought to instruct publishers to disclose their material affiliation to them.