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A Jeer, And A Cheer, For Government Policies Affecting Affiliate Marketing
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A Jeer, And A Cheer, For Government Policies Affecting Affiliate Marketing

Since the United States government decided to establish a high-level consumer protection agency, its Federal Trade Commission has gotten a little busier. They have started to enforce a decade old policy, and have instituted a new one, affecting how online marketing is done.

The older guidelines, first formed in 2009, have to do with written testimonials, reviews, and endorsements on affiliate Web sites. When I began working with vendors in one particular niche, some of them said that the FTC requires that any written promotion or review of their products on my Web site would have to be accompanied by a compensation disclosure. The FTC furnishes these examples:

  • Disclosure: We are a professional review site that receives compensation from the companies whose products we review…
  • Disclosure: We are compensated for our reviews. Click here for details.

Problem Number 1: Affiliates do NOT receive compensation for their reviews. Those who do are not affiliates: they are either sales representatives (if they also get a commission on any sales they make) or advertising copywriters (if they don't). Affiliates get paid when -- and only when -- people purchase their vendors' products by clicking through their sites' affiliate links. While they do aim to persuade people to buy via their articles and reviews, that isn't what affiliates are actually compensated for.

Problem Number 2: Most affiliates run ads on their sites, too, but the guidelines don't affect online advertising. Why not? Doesn't the public also have a right to know that site owners could be compensated when their ads are clicked through, or if the site owner was paid to place the ad? Why the discrimination – because advertisers can make bigger political campaign contributions?

But there's some good news from the FTC, too -- they've started cracking down on joint venture/upsell scams. That's when you get an e-mail from a vendor whose list you're subscribed to which links to the site of a friend offering to sell you a product at an extra large discount.

Problem Number 1: Most vendor joint ventures have little to do with "friendship." Vendor A offers to pay either a fee or affiliate commissions in exchange for having his product mentioned on Vendor B's e-mail list. Vendor B returns the favor, and both get to pat themselves on the back for not violating anyone's e-mail privacy.

Problem Number 2: The discount seems too large to be true, and usually is: What you actually buy is functionally useless unless you are "upsold" additional products at a much higher price.

After getting too many complaints, the FTC and major digital marketer Clickbank formed a joint venture of their own. Among other things, Clickbank has agreed to pre-approve all vendor videos on their site, verify price changes, and require immediate opt-outs on any upselling. That should go a long way in cleaning up that aspect of affiliate marketing.

Becoming a legitimate wealthy affiliate is not hard to learn, and you can even take an online Internet marketing course at no cost to you. And here's hoping that enough affiliates will either refuse to work with compensation disclosure vendors, or limit their promotion of them to advertising only.


Street Talk

Someday soon I will understand what you all are talking about here. You guys are priceless to me.

Reply
  about 1 decade ago

Quite funny how the USA seems to think it's their responsibility to govern everything. Who made it that they were to rule the Internet? Google can do that without them. LOL

Reply
  about 1 decade ago
Kyle  

I agree...maybe the don't realize the Internet is GLOBAL?

Reply
  about 1 decade ago
Kyle  

I wonder how this applies to groupon which is essentially earning a 50% commission from every vender that runs a promotion on their site. I don't see any big disclaimers on their end. In fact, they are a multi-tiered affiliate program that pays people for referrals as well. Maybe the FTC should look into this as well perhaps?

Reply
  about 1 decade ago

The FTC probably considers Groupon to be an advertiser since it relies on affiliates placing ads on their sites. Anything their affiliates published on their sites about Groupon itself is what would require a disclosure.

Reply
  about 1 decade ago
Kyle  

They are taking a 50% cut from the merchant. As an affiliate you are an advertiser as well. There really is no difference at all. The end user has no idea that groupon is getting a cut of the commission meanwhile groupon is actively promoting the service on their site. No difference really...they are a glorified affiliate coupon site.

  
  about 1 decade ago
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