FTC Guidelines and Internet Marketing

As of late, a fair number of questions coming from clients have to do with the latest Federal Trade Commission Guidelines as they pertain to blogging and Internet marketing. The questions specifically ask whether a blogger or affiliate marketer is required to disclose certain types of information on their website. If so, how must the disclaimer be presented? Highlighted in this article are several parts of the latest FTC Guidelines and what to do to make sure your website complies with FTC regulations regarding the disclosure of certain types of information.

In short, these questions focus on the new FTC Guidelines geared toward stopping misleading and false advertising. The Acai Berry, for example, runs ads claiming, “New Diet Pill Helps you Lose 50 pounds in 4 weeks.” The FTC applied their new guidelines to crackdown on Acai Berry and its affiliates along with other products claiming to have fantastic results as a weight loss supplement. Such advertising practices include:

WARNING! AcaiPure Is Fast Weight Loss That Works. It Was Not Created For Those People Who Only Want To Lose A Few Measly Pounds. AcaiPure was created to help you achieve the incredible body you have always wanted …USE WITH CAUTION! Major weight loss in short periods of time may occur.

False advertising isn’t the only thing at issue here. The FTC is concerned about “rebills” occurring accounts of customers. Not only did the advertisement lead customers to believe they would experience dramatic weight loss, the advertisement also indicated there was no financial risk to the customer. However, Acai Berry clients were billed for the product without their knowledge – sometimes thousands of dollars – for something they were led to believe was “Risk Free.” Without a doubt, the FTC will clamp down on these false claims as a way to curb someone else from doing the same thing.

FTC Guidelines and Blogging

The FTC isn’t only concerned with false advertising (blatant or otherwise), but they’re also concerned with persons who endorses a product and fails to disclose that he/she is a compensated endorser. Large scale operations have always been on the FTC’s radar, but smaller fish like bloggers and affiliate marketers receiving payment from websites engaged in false advertising should beware. According to FTC Guidelines, bloggers must post a disclaimer or make a disclosure regarding a “sponsored communication.” Unfortunately, an example of such a disclaimer regarding a “sponsored communication” is difficult to sum up with one article. However, the FTC Guidelines provide a few things to remember:

• Only “material connections” must be disclosed.
• Connections are material if the reviewer received some consideration for the review (e.g., cash, merchandise, etc.).
• Guidelines impose liability on: (1) advertisers, (2) advertising agencies, and (3) endorsers (including celebrity endorsers)
• The “results may vary” safe harbor is gone – advertisers are responsible for the claims made by endorsers.

Do I have to have a disclosure or disclaimer on my Blog?

Those who are paid bloggers, affiliate marketers, or receiving pay for advertising should put a disclaimer clearly displayed on your site. That begs the question, “What kind of disclaimer is needed on your website or blog?” The answer isn’t so clear cut. Some sites might have the ability to by with a disclaimer regarding advertisements displayed on your site for which you are paid. As long as the disclaimer is “clearly and conspicuously” placed according to the FTC Guidelines, then your site should be in the clear. Having a link in small type that just so happens to be the same color as the background color of your page won’t do. Remember, the disclaimer must be “clearly and conspicuously” placed. Neither do you want your site to have disclaimer taking up a whole page followed by a tiny link at the bottom of the page that links to your product. There’s no specific template based on “approved” methods for disclosing certain information. The FTC Guidelines simply say the disclaimer must be “clear and conspicuous” when disclosing the material relationships between endorsers and sellers – especially when such relationships aren’t otherwise clear to people visiting the website.

For bloggers, it’s important for the disclaimer to follow the blog post because the post can possibly be opened without having to access the main site. Not to mention the disclaimer/disclosure statement might be on a secondary page connected to the main site apart from your post. So, put a disclaimer on each post disclosing the material relationship you have with advertisers.

As a surprise to some, the FTC Guidelines govern advertising done on Twitter. So, make sure to disclose material connections with every Tweet.

How you can comply with FTC Guidelines

The revised FTC Guidelines dictate that advertisements for services and products must not be misleading or false. Advertisers must disclose when the advertisement showcases results that are not typical. Furthermore, marketers using word of mouth or electronic media must disclose any material relationships between themselves and the advertisers they represent in so consumers aren’t misled. When these guidelines are violated, the FTC will investigate the matter by taking into account the “totality of the circumstances.” That means the FTC will take a look at the advertised product, what the advertisement claims the product can do, and whether or not a “reasonable consumer” should be able to determine from the disclaimer if there is a material connection between the advertiser and the affiliate. So, be careful. Even though the truth can hurt…the truth doesn’t hurt as bad as the FTC crashing down on you.