Whether you're getting commissions on online courses, health and wellness products, or enterprise software, being an affiliate marketer can bring in some serious cash.
But are you sure you're following the letter of the law?
In the US, the Federal Trade Commission (FTC) requires all affiliates to have special disclaimers on their blogs, newsletters, videos, product reviews, and anything else they might be publishing. Without a disclaimer -- or without one that covers all of the necessary details -- you could wind up in some hot water.
It's a written statement that explains your relationship with any companies, brands, or products that you're mentioning in your online content. Specifically, it tells your readers that you're receiving some type of compensation -- like commission on certain products, payment for blog posts on certain topics, or free products to review -- so that they have the full story.
Check out this disclaimer from Xeriscapes:
The team at Xeriscapes has covered all of the bases here. They mention that they could receive money if you click on one of their links and make a purchase, and they also mention "complimentary products" as a form of their compensation.
Readers tend to approach content a little bit differently if they know that the author is receiving some sort of compensation. This doesn't mean that your readers will think you're some kind of slimy snake oil salesman, but it could mean that they'll take a closer look at the brands or products that you write about.
After all, would you blindly buy a product that you saw reviewed in a blog post if you knew the author had received it for free? Would you click feverishly to purchase a product that was recommended by your favorite blogger if you knew he was getting a commission? Maybe. Maybe not. Even if you trust the author, you'd probably do a little bit of Googling to see if this particular product or company is really worth your hard-earned money.
On the bright side, though, a good affiliate disclaimer can help build trust with your readers. After all, you're being completely honest about the links in your content and what happens if they click on them.
And, of course, if you're recommending quality products and services, your readers likely won't mind that you're getting a small commission. Or, if your readers really love you, they might buy a product they've had their eye on through your affiliate link just to make sure you get the commission.
Consider your affiliate disclaimer as a reminder to ONLY refer your readers to products and services that they can truly benefit from.
Because they're the federal agency in charge of protecting America's consumers, they've come up with rules that make things crystal clear. If you comply with the FTC's requirements, your readers will know exactly what you stand to gain from their clicking and purchasing.
In 2009, the FTC released its Guides Concerning the Use of Endorsements and Testimonials in Advertising. While there were complaints about all kinds of advertisements at the time, the FTC created these Guides specifically in response to the complaints consumers had about bloggers and people posting on social media.
While you won't find the word "affiliate" used in these Guides, they definitely apply to affiliate marketers.
In the Disclosure of Material Connections portion of the Guides, the FTC uses a member of a street team as an example:
If you're an affiliate marketer, this example should sound very familiar. Just replace the words "street team" with "affiliate" and you'll see that you have as much of a duty to create and publish affiliate disclaimers as this young man does.
In September 2017, the FTC updated its "What People Are Asking" page to specifically mention affiliate marketers. The FTC says affiliate marketers must have a disclaimer that "clearly and conspicuously" explains the relationship between the affiliate and the company/brand/product.
That way, "readers can decide how much weight to give your endorsement."
But are affiliate marketers really endorsing products? Aren't endorsements something that only fancy celebrities do?
According to the FTC, an endorsement is any kind of message that consumers are "likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser."
In other words, a simple recommendation for that skin cream you're an affiliate for falls under the legal definition of an endorsement. That means you're required to have a disclaimer that explains your affiliate relationship.
OK, so your disclaimer has to be clear and conspicuous. What else does the FTC require?
For starters, you have to put your affiliate disclaimer in a spot that's not considered "obscure" by the FTC.
For example, you could put a big, bold affiliate disclaimer at the bottom of your About Me page, but how many of your readers go onto that page? Are readers likely to find that disclaimer? Probably not. Instead, the FTC prefers to have disclaimers and affiliate links in the same place.
Also, don't think that you can bury your affiliate disclaimer in the fine print of your Terms of Service page. In order for your disclaimer to adhere to the FTC's Guides, it has to be in a place where readers aren't forced to hunt for it.
Putting your disclaimer at the end of your blog post is frowned on by the FTC, too. There's no guarantee that your readers will scroll all the way down to see it, and even if they do, they've already read your post.
Had the affiliate disclaimer appeared at the beginning of your post, your readers may have approached the content differently. Or, if you had posted your disclaimer close to the affiliate link itself, readers could have learned about your affiliate relationship and then decided whether or not they wanted to click on the link.
It's also important to place an affiliate disclaimer on every page where you make an endorsement or share an affiliate link. Posting a single blanket affiliate disclaimer on one random page of your website isn't good enough.
It's also not good enough to simply say that you're an affiliate. A lot of readers don't know what an affiliate is or how affiliate marketing works. As a result, they may not understand that being an affiliate means you're being compensated.
All of these rules also apply to social media postings, comments on other websites, or anywhere else where you might endorse a company, product, or brand.
In fact, in April 2017, the FTC sent out nearly 100 letters to celebrities and other social media influencers reminding them to clearly and conspicuously tell their followers about any relationship they have with certain companies or products.
Even if you're not receiving a commission through your affiliate links, you could still be responsible for publishing a disclaimer. That's because the FTC wants consumers to know about ANY type of compensation you receive, including free products, discounted products, store credit, special access, favors of any kind, and any other privileges that the general public doesn't get.
And finally, when in doubt, think about what a reasonable consumer would think. That's the standard that the FTC uses when investigating possible violations. If your average reader can't figure out that you're promoting affiliate products, you need a disclaimer that clears everything up.
The Guides themselves aren't an official law. However, if you don't adhere to them, the FTC has the power to investigate you under Section 5 of the FTC Act, which prohibits "unfair or deceptive acts or practices." From there, you can be required to give up all of the money you made while you violated the rules.
You can also be forced to adhere to additional rules and regulations in your future affiliate marketing efforts.
Even if you don't live in the US, you can still be held accountable to these rules.
According to the FTC, if it's "reasonably foreseeable" that American consumers will see your blog post, watch your YouTube video, read your social media post, etc., the FTC Act applies.
Plus, several other countries (like the UK) have their own rules regarding affiliate disclaimers, so make sure yours is comprehensive. After all, it's better to be safe than sorry!
You may be thinking that there are so many websites out there that the FTC will never know whether your affiliate disclaimer is there or not. While they do perform random spot checks, there's always a chance that someone could report you to the FTC, and if you haven't dotted all of your I's and crossed all of your T's, you could end up in some hot water.
However, there is one bright side that may surprise you. Contrary to popular belief, the FTC doesn't hand out fines for people or businesses who violate their Guides. Plenty of websites out there say they do, but the FTC has come out and said there are no financial penalties:
But it's not just the FTC you have to worry about.
In addition to the FTC, many of the companies that have an affiliate program require their affiliates to have specific disclaimer language. If you don't follow their rules -- on top of the FTC's -- you could lose your commissions or be removed from the program entirely.
In Section 5 of Amazon's Associates Program Operating Agreement, the disclaimer rules are crystal clear. They even give you a specific sentence to use in your affiliate disclaimer:
Udemy also has specific rules for its affiliates, and they make it very clear that if you don't adhere to them you run the risk of getting kicked out of their program:
Legacy Learning Systems has created a specific policy that's based on the FTC's Guides AND conversations that they've had with the FTC. They go into even more detail than the FTC Guides do because they cover everything from specific words to use, the size of the font you use, and even the font color you use for your disclaimer:
Lindsay over at Pinch of Yum has a great disclaimer on her website:
Lindsay has a resource page that lists a bunch of the products she uses to create and maintain her successful food blog. She makes it clear that she has affiliate links on the page and that she will make some money if you click on a link and make a purchase.
However, the best part of this disclaimer is where she says that she has personally used all of these products and that the companies that sell them are "helpful and trustworthy." That extra sentence gives her a lot more credibility than if she had just simply followed the FTC's Guides.
You can take this idea one step further and inject some vivid personality into your affiliate disclosure. It can even help you separate yourself from the competition!
Take a look at the affiliate disclaimer that Ed Troxell Creative uses:
He begins his disclaimer by complimenting his readers for their curiosity. Then, he uses the situation to build more trust from his readers. By saying, "You know me, I love to research and learn something new," he looks nothing like a slimy salesman. Instead, he has made himself look like a guy who's eager to venture around the web, learn new things, and share them with his readers.
After that, he explains that his affiliate income enables him to keep "researching and helping connect people with the right resources." By the end, readers likely love the fact that Ed can keep serving up great content, and they probably don't judge him one bit for using affiliate links.
Jonathan Fields got creative in an entirely different way:
Chances are readers aren't going to forget this affiliate disclaimer! This kind of humor may not work with EVERY audience, but it must work with his because it's still there.
If you're making money or benefitting in any way as an affiliate marketer, you need to tell your readers about it. Not only will the FTC be happy, but so will the people who count on you to provide honest and valuable information!