The Legalities of Affiliate Marketing

So, you want to get into affiliate marketing? If yes, do you understand the difference between EPC, CPC, CPM, CPA, PPV, ROI, and the rest of the affiliate marketing alphabet soup? Perhaps most importantly, do you know what legal pitfalls to look out for when starting an affiliate marketing business?

If not, don’t worry. This article will outline a few key things, both legal and general, to consider before jumping into the ocean of affiliate marketing.

Affiliate Marketing Verticals (Niches): Which Laws Affect Each Niche

Before you decide on a specific vertical or niche to jump into, ask yourself, “How profitable is this vertical for other affiliates?” If it’s profitable for a bunch of other people, there is a possibility it could be profitable for you, too. But like most things in life, your success depends on the effort you put in to your affiliate campaigns.

Some of most popular verticals include:

  • Dating
  • Weight loss – including colon cleansing products
  • Financial services — credit repair, credit scores, and mortgage loans
  • Skincare
  • Penny auctions

If you plan on setting up a dating, weight loss or skincare affiliate marketing program, there’s a good chance you’ll want to use testimonials on your site. And though it may be tempting, it’s important that you don’t make-up testimonials out of thin air. The FTC gets very prickly about that — and doing so could end up costing you thousands of dollars in damages.

Now, that’s not to say that you can’t use testimonials that are based in fact. You just need the proper FTC disclaimer on your site. An experienced Internet lawyer is the most appropriate person to contact about making sure your site’s terms of service comply with various FTC statutes about testimonials and online marketing.

If you’re leaning more towards penny auctions or financial planning, make sure you’re up to date on all federal and state laws that deal with online privacy as it relates to the disclosure of personal information. Again, its best to contact an Internet lawyer when thinking about starting a business that involves finances.

Affiliate Marketing Legal Compliance

If you’re looking to get involved with affiliate marketing, complying with all federal, state, and local laws, in addition to advertising and consumer protection regulations, is a must. If the Federal Trade Commission (FTC) suspects your affiliate business of running afoul, they’ll be on your doorstep almost as quickly as it took to load this page . (Well, maybe not quite that fast, but you get the point.)

Trying to make sense of all the laws regulations that encompass advertising on the Internet can be overwhelming – especially when you’re trying to get your toe in the ocean of affiliate marketing. The last thing you want is to be accused of false advertising, misleading consumers or defending yourself in court as a result of an FTC investigation. That’s why having an Internet lawyer on your side, one who is also into affiliate marketing, makes perfect sense.

An experienced Internet attorney with affiliate marketing industry experience can also help equip you with some safeguards no affiliate site should be without.

Terms of Service: Having a “Terms of Service” page on your affiliate website tells visitors what is and is not acceptable use on your website. The terms of service for your website are a set of ground rules that explain the purpose of the site, the rights and responsibilities of you, the publisher, and site visitors. The terms of service explain the relationship you have (or don’t have) with third-party advertisers and whether or not you make a commission from those ads.

The terms should let visitors know how their information is being used or tracked by cookies or web beacons, in addition to letting users know how they can opt-out of having cookies or web beacons track their web surfing preferences. The terms of service should also define the manner in which legal disputes are to be settled between you, the affiliate, and the end-user. You don’t want to have a pending lawsuit brought against you in a place where your business isn’t physically present.

Privacy Policy: As part of your affiliate marketing venture, you may need to collect personal information such as: first and last name, e-mail address, telephone number, street address, and whether or not the user is 18 or older. You’ll need to give users the assurance that you are doing your due diligence to keep their information safe. Also, you must disclose if you plan to retain any personally identifiable data for any length of time. Your site’s privacy policy should also assure users that you will not use their information to spam, scam, or any otherwise naughty thing.

There is a lot more to affiliate marketing than what’s contained in this article. To get a better understanding of the legal issues affiliated with affiliate marketing, contact a fellow affiliate and experienced Internet lawyer today.

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