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Looking Beyond the FTC Disclosure Rule

Today marks the day that the Federal Trade Commission’s (FTC) new guidelines regarding endorsements and testimonials in advertising take effect. The FTC wants bloggers and other social media users to reveal their relationship with the products, companies or services they are reviewing and writing about. When I first read the guidelines my initial reaction was it’s about time. Finally the FTC is addressing what has been a grey area. While we, in the affiliate marketing industry, all know about the paid or reciprocal relationships do those outside our industry? Do “outsiders” even care? Probably not, but they are entitled to know if there is a hidden relationship or ulterior purpose or meaning behind any post.

So what does this mean for affiliates and merchants? The FTC wants everyone to add a disclosure statement explaining the existence of any paid endorsements or reviews. Of course, everyone should read the FTC guidelines for themselves and I’ve provided a link at the end of this post. Determine how the guidelines impact you and add a disclosure policy. Simply indicate if and how you may be compensated and if that compensation affects your review. Make it short or make it long, just be honest.

But another question enters my mind as I think about the new guidelines. Will these new guidelines have any real impact?

As cynical or skeptical as any of us may be, we probably have all fallen for a paid endorsement at one time or another. How do any of us know what the real relationship is between any writer, blogger or tweeter and the product, service or company being spoken about? Should we pause and think about relationships every time we click a link?

Look at what happens on Twitter; sometimes you don’t know until you click a link if the person tweeting was just sharing or had some other motive.  Many times you will never know. And 140 characters is probably not enough to tweet any thing of substance and still have a disclaimer. Maybe we need to use a hashtag like #paidend.  Besides, what constitutes a paid endorsement? Is it just monetary or is it also other compensation? Isn’t it all just common sense?

As hard as the FTC tries, a grey area will still remain. The only ones that can really define good standards of practice and eliminate that grey area is our industry. We should not be relying on the government to step in and begin to regulate us. We need to define or modernize our current standard of good practices.

Unfortunately, common sense does not work; it would be much easier if it did. We need more defined rules and guidelines and more importantly, we need to adopt them. Policies on disclosure, toolbars, and advertising are just the beginning. We need to address the generally unbalanced affiliate-merchant agreement; we need to decide what is the real role of a network. I am sure any one reading this can think of several other key industry issues.

Do we want the government to define these guidelines and policies for us or do we want to steer the industry? And it doesn’t begin and end with policy;  we need to implement and enforce.

The modernization of fair and ethical practices will be a tough process. In my opinion, we need to act.  Challenges are not easy but we must face that challenge. I think our industry is ready. As we have seen, there are many who are willing and able to act.  New leaders are stepping forward and that is a welcome sight.

Read the Federal Trade Commission new guidelines concerning testimonials and endorsements in advertising.  http://ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf

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