Affiliate Disclosure Statement: The Ins and Outs

In December 2009, the U.S. Federal Trade Commission (FTC) updated their “deceptive advertising” guidelines in relation to affiliate marketing.

In short, the FTC said that if an affiliate marketer has a material relationship (i.e.; making commission) to a product that’s reviewed on his/her website, that the affiliate must fully disclose that relationship to his/her readers.

These guidelines themselves were not new, having been already in place for other areas of e-commerce such as email and spam.

The FTC remains somewhat unclear about how they plan to enforce these guidelines. Regardless, questions about whether and how to create an affiliate disclosure statement are some of the most frequent questions I hear from people starting an affiliate marketing business.

Today we’re going to evaluate three things: whether you need an affiliate disclosure statement, where one should be located on your site, and what your statement needs to include.

Do I Need a Disclosure Statement?

In short, it’s not even worth evaluating this question. If you’re selling digital or physical products, or services, on your website, while also reviewing those products on your site, you will need to fully disclose your relationship to the product you’re selling. If you’ve simply posted a sidebar widget with a few products in it, you won’t need to disclose because those widgets are typically labeled as advertising.

Where Do I Place the Disclosure Statement?

While you don’t have to include the disclosure on every page of your site, you do have to make it obvious and conspicuous. Like most affiliates, you’ll probably want to create a link to it in the footer of your site. It’s not necessary to put the link in the primary navigation at the top of your site.

However, if you syndicate your blog to multiple sources such as RSS, Twitter, Facebook and Google Plus, you’ll want to include a link to your disclosure somewhere in the bottom of your content that’s syndicated. This will assure that you’re fully disclosing to your syndicated readers.

The Bones Of a Good Disclosure Statement

For affiliates, this has been the most puzzling aspect of adhering to these guidelines, simply because many feel the FTC hasn’t said exactly what they want affiliates to disclose. However, if you refer to this FAQ about the guidelines, you’ll see that FTC has said what they’re looking for.

The FTC says “if an endorser has been paid or given something of value to tout the marketer’s product – the ad is misleading unless the connection is made clear” and that if you’re making an endorsement “on behalf of a sponsoring advertiser.” So if you’re reviewing a product that’s given away for free, you’re fine.

But if your goal is to recommend products and services on your site, and make money from those recommendations, you’ll need something clear and simple, such as “this website often reviews products and receives compensation from the retailers of the products it reviews.” You simply need to tell your readers that you’re being paid by the retailer or manufacturer of the products you’re reviewing.

Here’s an example of a good affiliate disclosure statement from the blog

The Federal Trade Commission (FTC) requires the disclosure of any relationship that exists between one who endorses a product and the manufacturer or service provider of the product when writing a review about the product or service. Following are the guidelines that adheres to:

  • We at Acoustic Guitar Tips are not paid to do reviews on any products contained within this website.
  • If there are links to a product in any of the reviews, a commission may be paid to us if you purchase the product.
  • We will never write a review on a manufacturer’s product, nor will we promote a product, if we believe the product will not be beneficial to you.
  • Any commissions received as a result of Acoustic Guitar Tips promotional efforts will not impact opinions on a product. If, through research and/or use of a product proves to be a benefit to the end-user, we will promote it. If not, we do not offer it.

The Federal Trade Commission considers it important for the consumer to understand the relationship between the product reviewer and the manufacturer of the product and, hence, has made this disclosure statement a requirement by law.

Therefore, if you do not see a disclosure policy as part of a review of a product, the one who is reviewing the product may be in violation of the law.

And regardless of your content, whether it’s email, written blog posts, or videos, you need to make a disclosure. So if you’re an affiliate marketer (and if you’re reading this blog, it’s likely you are) and you don’t have a disclosure statement on your site, you need to get one quickly.