Virtual World has many business opportunities for people to make money from. You may be a blogger, site owner or even an affiliate marketer, you will look for a business opportunity in promoting a product or a service. If the users check your blogs and get impressed to buy the product, they may go to the link that you have mentioned to buy the product.
Technically, this is called a call for action and you have done it successfully. Now, the user goes to the website that is directed by the link and they buy it. You get a commission for this sale. It sounds good and easy at first look. Of course, it requires a lot of effort and also user footfall to realise this.
This particular process has legal norms now. If you are an affiliate marketer of any form, you must follow the legal norms set by the Federal trade commission (FTC). If you are an affiliate marketer, supporting merchants from US, UK or Canada, it applies to you. It is considered illegal if you do not follow that.
What is FTC legal norm now?
It is called Affiliate disclosure. Federal Trade Commission has set up this legality of you disclosing that you shall be getting a commission if the customer goes through the link to purchase the product. Ideally, the process is in between 3 parties.
The affiliate marketer or the publisher in simple terms will promote the merchant’s products. The consumer buys it and the commission is paid by the merchant to the publisher. Now, FTC says, you must disclose that you will be paid commission while the consumer is buying the product. The disclosure must be clear in any form in the blog or the site from which you are promoting the merchant’s products.
It is said that this policy has come up to retain the trust between the merchants and the consumers.
What does the Disclosure policy clearly state?
The FTC disclosure policy states that
‘If you are an affiliate marketer in the US, UK or Canada, promoting the products or services of merchants who belong to the US, UK or Canada must disclose your relationship with the merchant, brands or products on your website’
This means to say, you will tell all your visitors that you shall be paid commission if the user becomes a customer to buy the product.
Please Note: This holds only good only if the user uses the affiliate link to purchase the product.
What does FTC tell regarding this Policy?
Federal Trade Commission has released the Affiliate disclosure requirements in the year 2009. FTC feels it is a point of deceiving if the consumer is kept blind on the process. The consumer must be sure about whom he/she is buying from and through what channel does it happen.
FTC also clearly states that the disclosure statement must be very clear and conspicuous. There must not be any hidden facts in it. The statement must be clear to a reasonable customer even if the website is well known for many that it is an advertising website.
Further, the affiliate link is pretty clear that it leads to the merchant website. That does not mean that you will not make any affiliate disclosure. What may be clear to you and few consumers cannot be taken into account. It is for all and everyone must know this fact that you are paid a commission for any sale that happens through your blogs, website or reviews. In this regard, even the ‘buy now’ button and similar kinds also are not sufficient.
So, Who needs an Affiliate Disclosure Statement?
It goes for anyone who endorses brands or products or services of other companies and gets a commission in the name of compensation must display the disclosure statement. It includes the following
- Affiliate marketing
- Any Sponsored Posts that fetch revenue from the merchant
- Claims that are sensational that promotes a product on a commission basis
- Influencer Campaigns
This holds good for people who do these for merchants who belong to US, UK or Canada.
Further, if you are planning to add an affiliate link in your blog post, you must have the disclosure statement.
If you are planning for a marketing video on Facebook or Twitter that helps promote a product for the consumers to buy, it needs an affiliate disclosure statement that has to be clear.
Of course, if you do the same in any of the social media platforms other than the ones that we had mentioned above will abide by it.
Your information on the disclosure must contain if you have received any commission earlier. On the same lines, if you have received any advertising fees, free products, discounts or any other privileges must be mentioned.
Now, it is a must to clarify the word called ‘Compensation’.
Compensation need not be the direct affiliate commission funds. There are a few that come under that category. If you are receiving any of this kind must be mentioned in your disclosure statement.
Compensation can be
- Payments that are made in Cash
- Demo Products that you receive from the Merchant
- Any store credits that the merchant website has
- Any gifts from the merchant
- Free Give away items to consumers
- Gift Cards
Disclosure Procedure – When to disclose?
It is required of you to set the disclosure if you are recommending or endorsing any product or service. It can be a simple term but must be clear enough for everyone.
For Eg: ‘I am paid a commission for the purchases made through the links that are present in the post’
FTC requires the disclosure must be clear all the time. It must be easily understandable too. Alternatively, you can also set a link that can navigate to your disclosure statements. The link must be available in the post that you are recommending or endorsing any product.
Meet the FTC disclosure with these Best Practices Mentioned Below
- Have your disclosure statement very clear and conspicuous so that the consumer understands it before making any purchase through your website.
- Ensure this information is present in all the devices like mobile phones, tablets and PCs
- If you find any difficulty concerning space constraints have a disclosure link. Let the disclosure link be highlighted as ‘suggested post’ or ‘Advertisement link’
- Always have the disclosure statement on top of the post. It saves you from the clarity factor
- If you are using a disclaimer page and you want the consumers to navigate and check. In such cases please avoid misleading statements like this
- Click here
- Fine Print
- Terms and Conditions
The above-mentioned terms are not clear. Moreover, they are misleading and does not convey the message. This could be a violation of FTC’s policy towards Affiliate Disclosure.
- Also, track the CTR. This is called Click Through Rate. By tracking it, you will be able to understand whether people can understand and navigate the page or not. Also, it shows whether the disclosure statements are clear and visible.
- You can also add a disclosure widget on the sidebar. Or you can also allow a pop up to appear which shows the relationship between you and the merchant. This helps consumers to understand what they are planning to communicate.
- You can also use a plugin for affiliate statement
FTC’s policy is clear and it also has an element of trust. This is a good move indeed. The consumers, on the other hand, would like to get associated with people who are trustworthy too. This shall enhance the user and affiliate marketer relationship boom a little. Let us give way for authentic sellers with genuine intentions.