Affiliate marketing is one of the most common ways for someone to earn money from home. Some people earn by adding this income stream to their primary one for some extra money. Others spend all of their time building websites or posting on social media to promote other people’s products.
And while affiliate marketing is completely legal, there are specific legal requirements imposed by the FTC for all affiliate marketers. In essence, the FTC requires that like other types of advertising, affiliate marketers are required to let readers and followers know that they are posting an ad in order to sell a product or service.
The FTC’s documents are a bit difficult to decipher so here is a breakdown of what is required.
- Disclosure must come before the links on your page. Having a disclosure in the footer, header, or sidebar is not enough.
- The disclosure must appear before the first instance of the affiliate link, and applies to all device types.
- Each vendor has rules interpreted from the FTC, so consult with your vendor as to where they prefer disclosure placement to be. They will let you know if your disclosure is not in the right place for their legal team.
- Your disclosure must be noticeable; you can’t put it in a lighter color or smaller font.
- You must use language that the majority of people can understand. No legalese.
- You must use full sentences or phrases; #affiliate or similar tags are not enough.
- The disclosure must be on the same page as the affiliate links; having a clickthrough to another page is not enough. (You can have a one-sentence disclosure on the page which links to a full-page explanation on a separate page.)
- Disclosures are not implied; you must have them on all documents including newsletters, social media, etc.
For Social Media
Disclosures on social media channels are also required. Given that these sites often have character limits, you are allowed to use reasonable abbreviations to indicate that a post is an ad. The FTC does consider affiliate marketing and sponsored posts in the ad category, even if you think you are just offering a referral.
For sites such as Twitter with limited characters, the FTC has said,
Starting a tweet with “Ad:” or “#ad” — which takes only three characters — would likely be effective.
Therefore, any site that has limited characters (or only shows limited characters on its main page) requires the word “Ad” or hashtag “#ad” before the actual social media post. You can use this method on Twitter, Pinterest, Facebook, Instagram, and other sites. However, you can note that paid advertising on those sites has the word “sponsored” or something similar to denote an ad.
Podcasts and radio programs also require disclosure at the beginning of the program. You may note that many podcasts announce their opening introduction and then quickly add in who is sponsoring the podcast. They may also have commercials throughout the audio cast, but the beginning announcement of sponsorship is still required.
What is Considered an Ad by the FTC?
The FTC considers any type of compensation by a company or organization in return for an announcement, commercial, post or social media post as an ad.
It is not required that you receive monetary compensation for your post. You can also receive coupons, gift cards, products or a service in return for your post. These still require disclosure. Some bloggers receive free products in return for a review or food products in return for a recipe. These are considered ads by the FTC and require disclosure.
In most cases, your sponsor will designate the language required at the beginning of your post in order to receive compensation for posting. Often they will tell you to write, “This is a sponsored post,” or something similar at the beginning. Some go further and instruct you to write, “This post is sponsored by XXX Company in return for this recipe.”
Other considerations that require disclosure include:
- Endorsing a free product or service
- Writing a negative review
- Mentioning a brand preference
Items that Don’t Need Disclosure
Obvious advertisements do not need disclosure including:
- Banner ads
- Sidebar ads
- Google Adsense and similar programs
What to Do If You Aren’t Sure
In the end, there are always some gray areas. If you aren’t sure which category your post falls under, then put a disclosure at the top of your page, or better yet, contact an attorney. In fact, if most of your site consists of affiliate marketing, then put a general disclosure on the top of every page, then add a more specific one if needed on single posts.
Contact us for more information on FTC rules of disclosure.