FTC Disclosure for Affiliates: The Definitive Guide
When affiliate marketers or other people who might be compensated for mentioning brands and products on the internet talk about the brands and products which they are paid to talk about, the FTC requires that this relationship is disclosed.
That means, basically, that you have to tell your audience that you are getting compensated. The reason for this is that people naturally are more skeptical of paid endorsements than they are of those freely given. If someone is just talking about a product because they like it, but not getting paid, you are more likely to believe them.
This article will discuss this requirement and what you need to do to comply.
- 1. Who is the FTC?
- 2. What is Affiliate Marketing?
- 3. FTC Disclosure Applicability
- 3.1. Who has to Disclose?
- 3.2. What Do You Have to Disclose?
- 3.3. When Do You Have to Disclose?
- 3.4. No Exceptions
- 4. Clear and Conspicuous
- 4.1. Clear and Conspicuous to Whom?
- 4.2. No Loopholes
- 4.3. Why Clear and Conspicuous Disclosures are a Good Thing
- 4.4. How to Ensure Your FTC Disclosures are Clear and Conspicuous
- 4.5. Proximity and Placement
- 4.5.1. Same Screen
- 4.5.2. Scrolling
- 4.5.3. Hyperlinked Disclosures
- 4.5.4. Interactive or Dynamic Disclosures
- 4.5.5. Disclosures in Relationship to a Purchase Process
- 4.5.6. Space-Constrained Ads
- 4.6. Prominence
- 4.6.1. Evaluating Prominence
- 4.7. Avoid Distraction
- 4.8. Repetition
- 4.9. Multimedia
- 4.9.1. Disclaimers should generally be contained within the media that they reference
- 4.9.2. Display Visual Disclosures for an Appropriate Length of Time
- 4.10. Understandable Language
- 5. Summary
Who is the FTC?
The FTC is the Federal Trade Commission, an agency of the United States federal government. Its primary mission is consumer protection.
In pursuing its mission, the FTC creates and enforces rules concerning how corporations and individuals conduct business. Anti-trust regulations, truth in advertising, and many other commonly encountered consumer-protection mechanisms originate with the FTC.
As part of its role in protecting consumers from deceptive marketing practices, the FTC requires that affiliate marketers and others using the internet and social media to promote products and brands disclose their financial relationship to the products and brands they mention.
What is Affiliate Marketing?
Affiliate marketing is a type of marketing in which affiliates promote a brand or product, drive internet traffic to a sales site, and are rewarded when a visitor purchases a product.
Often affiliate marketers will blog, create videos, post on social media, or otherwise talk about the products and brands they are promoting. They might write product reviews, or casually mention the product in various contexts.
It used to cost money to disclose and distribute information. In the digital age it costs money not to.
If you blog, make videos, Tweet, post to Facebook, or otherwise communicate online about brands or products, and if you have ever received any type of compensation for doing so - commission, advertising fees, free products discounts, special privileges (or if you hope to get those things in the future) - then you are engaging in affiliate marketing.
FTC Disclosure Applicability
Who has to Disclose?
If you are being compensated in any way by the makers of a product or the owners of a brand which you mention, then the FTC Disclosure rules apply to you.
And it isn't just direct affiliate marketing commissions, either. Lots of things qualify as compensation:
- Cash payments
- Free products
- Store Credit
- Free Services
- Special Access
- Favors of any kind
If the president of the company took you out to a nice dinner, if you were invited to the super exclusive launch party, if you got mailed a swag bag, if you get a year of service for free... if you get any benefit at all from the company or product which you didn't pay for, any benefit that might have come to you as a result of your online mentions of the product or brand, then you are required to disclose this fact.
It doesn't matter if you are a small time blogger, a casual Tweeter, or just someone who mentions things on your personal Facebook account from time to time.
It also doesn't matter if the value of compensation is relatively low, or relatively infrequent.
What Do You Have to Disclose?
You have to disclose the fact that you have received some form of compensation from the company whose products or services you are posting about.
It is best to describe the nature of your relationship to the company. If you are an employee, say so. If you get a commission from sales, say so. If the company paid for the advertisement, and you neutrally accept any ads that pay the fee, say so. If you own stock in the company, say so.
When Do You Have to Disclose?
Right away, and every single time.
Disclosure must be done as close to the claim that triggers the disclosure as possible. And it must be done every time a triggering claim is made.
So, for example, if you Tweet about a product, the Tweet itself (yes, within the 140-character limit) needs to include the disclosure.
This will be covered in more detail later on in this guide, but the main point is that you can't hide your disclosure on a separate page or after three screens of scroll. You have to make your disclosure within close proximity to the "triggering claim" - that is, to the statement or endorsement that causes you to have to make a disclosure.
The most important thing to remember is that there aren't any exceptions to the FTC disclosure policy. No one is too big, or too small, to be unaffected.
Clear and Conspicuous
One of the more important aspects of FTC Disclosure Rules, and the one that many advertisers try to skirt whenever possible, is that disclaimers of any type need to be "clear and conspicuous."
You cannot hide or obscure your disclosures.
Clear and Conspicuous to Whom?
Disclosure messages must be clear and conspicuous to "a reasonable consumer." Not to an industry insider, not to the FTC, not to highly savvy and sophisticated power-user.
A "reasonable consumer."
Another worthwhile FTC phrase is "a substantial minority," as in: If a substantial minority of people reading the ad would miss the disclosure, then it is not clear and conspicuous.
The question is not "is it possible for someone to find the disclosure," but rather "is it highly likely that the average consumer will see and understand the disclosure."
Many people, when trying to deal with rules like this, start looking for loopholes. The thinking is something like, "There must be a way to follow the exact letter of the rule, while still obscuring the fact that I'm being paid for this endorsement."
There's a problem here: there isn't a "technical, by the letter of the law" set of rules to follow. This approach is doomed to fail because it makes no sense.
The rules don't provide a bunch of technical descriptions about colors, font sizes, or measurements. The rule describes the intention. The letter of the law is the spirit of the law. Or, as the FTC puts it:
The ultimate test is not the size of the font or the location of the disclosure, although they are important considerations; the ultimate test is whether the information intended to be disclosed is actually conveyed to consumers.
If you are attempting to obscure the information included in the disclosure, then you are breaking the rules. All of the additional material provided by the FTC (and this guide), covering specific cases and examples, are guidelines to follow - not rules to work around.
That's why the FTC uses phrases like "a reasonable consumer," and why violations, when they are prosecuted, are judged by human beings looking holistically at the entire set of circumstances, not by computers ticking off items in a check list.
Why Clear and Conspicuous Disclosures are a Good Thing
The FTC guidelines take the time to point out that clear and conspicuous disclosures are not just good for consumers, they are good for vendors and advertisers as well.
Negative consumer experiences can result in lost consumer goodwill and erode consumer confidence. Clear, conspicuous, and meaningful disclosures benefit advertisers and consumers.
Most people don't mind advertising, as long as it is honest and relevant. FTC Disclosure rules are intended to ensure honesty, but you shouldn't need them in order to be honest. For the most part, the type of disclosure required by the FTC is something that you should be doing anyway.
In fact, most people who aren't complying with the FTC Disclosure regulation aren't trying to be dishonest. Most of the time, they simply didn't know what the rules were, or they thought everyone understood their relationship with other companies. (If you're an affiliate marketer, its hard to understand how people could be confused about getting paid for links to products.)
The FTC's rules and guidelines are there to assist everyone, to ensure that everyone is on the same page and speaks the same language when it comes to disclosing compensation relationships that might lead to a conflict of interest.
They also remove the competitive advantage of dishonesty, which helps ethical advertisers - people who would never dream of trying to mislead their potential customers.
In short, complying with FTC Disclosure regulation isn't just a legal requirement - it's the right thing to do.
Now, sure - an honest and ethical advertiser might have (if there weren't these rules in place) implemented their disclosure in a way different than the FTC requires it. And yes, sometimes FTC's requirements are a little annoying. It can be difficult to stuff your disclosures into a 140-character tweet, and the text of your disclosure might make your sales page a little less attractive.
But overall, FTC Disclosure requirements are positive for both consumers and advertisers.
How to Ensure Your FTC Disclosures are Clear and Conspicuous
The next several chapters cover what exactly is meant by "clear and conspicuous," and how to ensure you are meeting this requirement.
Generally, though, in determining whether disclosures are sufficiently clear, the following should be considered:
- The placement of the disclosure in the advertisement and its proximity to the claim it is qualifying;
- The prominence of the disclosure;
- Whether the disclosure is unavoidable;
- The extent to which items in other parts of the advertisement might distract attention from the disclosure;
- Whether the disclosure needs to be repeated several times in order to be effectively communicated, or because consumers may enter the site at different locations or
- Travel through the site on paths that cause them to miss the disclosure;
- Whether disclosures in audio messages are presented in an adequate volume and cadence and visual disclosures appear for a sufficient duration;
- Whether the language of the disclosure is understandable to the intended audience.
Proximity and Placement
A disclosure is most effective if it is placed in close proximity to the triggering claim or the relevant posting. Proximity makes it more likely that consumers will:
- See the disclosure
- Understand that the disclosure relates to the relevant brand, product, service, or company
Proximity is easy to think about with print ads, where the physical distance between a claim and a disclosure is easy to measure. Even online banner ads, if they are comprised of a single linked image, are fairly straightforward.
Websites, however, as well as mobile applications, present some complexity:
- They are interactive
- They have multiple pages
- Single pages can be of limitless length
- Popups, tooltips, hover-overs, and animations create dynamic graphic environments
Mobile devices create an additional layer of complexity because of space constraints and scaling:
- Less content can be placed on the screen at one time
- Images and text that is legible on a large screen may be too small to read on a small mobile phone screen
The best placement, from the standpoint of proximity, is to have the disclosure on the same screen as the triggering claim.
With affiliate marketing, often there is not a single word or phrase that fully constitutes a "triggering claim," but rather a large piece of content. If there is any single word or phrase that can be considered the "trigger" for disclosure, it is the affiliate ad link - the hyperlink that actually leads to a sale process.
Ideally, the hyperlink and the disclosure should appear together on the same screen.
It is common, especially in the case of blog posts, for affiliate marketers to assume that a disclosure at the end of a post is sufficient, even ideal.
The problem with that is the user is required to scroll to the bottom of the blog post to see the disclosure, while the triggering links are actually contained within the body of the post. It is highly likely that the user will decide whether or not to click on the links before making it to the bottom of the page (if, indeed, the user even gets that far, which is not certain).
Therefore, the FTC generally does not consider "below-the-fold" disclosures sufficient.
Instead, place your disclosure at the top of the blog post. This can be a detailed explanation of your relationship with the brand or product, but it can also be a very simple word or phrase, like:
- Sponsored Post
- Please note: This post contains affiliate links.
Sometimes, however, the disclosure notice may need to be longer, and it doesn't make good sense to place it at the top of the post. Sometimes, scrolling is unavoidable.
In these cases, several practices are strongly are encouraged:
- Visual or textual cues to indicate the need for scrolling. (The FTC specifically makes clear that scroll bars are not a sufficient cue to indicate this.)
- Partial disclaimer language above the fold, linking to or indicating the more complete disclaimer below the main content. For example, you might place the phrased "Sponsored Post" above the content, and link that text to a fuller explanation below the content. This can benefit you as an advertiser by giving you the opportunity to explain your relationship to the brand or product in a favorable way.
- Unavoidable disclaimers, which will be seen by anyone who moves through the sales process. For example, if you have a long post about a product, but only link to it at the end of the post, placing the disclaimer directly next to or right above the link ensures that it will be seen by anyone actually purchasing the product.
Site designers and advertisers are strongly encouraged to keep abreast of the latest research regarding usability and user interaction, and to use that information to ensure that users will see and understand disclosures.
Hyperlinks can allow disclosure information to be placed on an entirely separate page. This can be advantageous, but there are potential problems as well.
The right circumstances for a hyperlinked disclosure are:
- A lengthy disclosure that cannot easily be displayed in its entirety in the context of the triggering claim
- A disclosure that needs to be repeated because of many triggering claims throughout a site
However, a hyperlinked disclosure may not be sufficiently clear and conspicuous. The anchor text (that's the text that you click on to follow the link) needs to be prominent, and in close proximity to the triggering claim. Moreover, it needs to be clear what the general content of the disclaimer is going to be. It is not enough to simply have a link on the word, "Disclaimer" or "Click here for more info."
In the case of affiliate links or sponsored content, the anchor text needs to make clear that the publisher (you) is being compensated. The linked disclaimer can explain the nature of that compensation in more detail, but there needs to be enough information on the originating page to make it clear to consumers that there is a potential bias due to a financial motivation.
When evaluating the overall effectiveness of hyperlinks for disclosures, the FTC follows these key considerations:
- The labeling or description of the hyperlink;
- Consistency in the use of hyperlink styles;
- The placement and prominence of the hyperlink on the webpage or screen; and
- The handling of the disclosure on the click-through page or screen
They also offer the following advice about labeling links:
- Make it obvious - It should be clear that the hyperlink is, in fact a hyperlink. Underlining alone is usually not sufficient. Rather, underlining along with a special color should be used. The specifics will vary depending on site design and other context, but there should be no way that a reasonable consumer would not know that the linked text is clickable.
- Label the link to convey the importance, nature, and relevance of the information to which it leads. - The text should make it clear that the linked information is relevant to the context in which the disclaimer is triggered.
- Don't hide the ball - Linking a single word within a body of text is usually not sufficient, as it does not provide enough information about the nature of the disclaimer. Likewise, a generic word or phrase like "Terms" or "Fine Print" does not communicate the nature of the disclaimer, and is likely to be ignored. Often, the best solution is to include a partial disclaimer in the anchor text.
- Don't be subtle - Many publishers and site designers would like to use an icon to indicate their disclosures, such as (for example) a green dollar sign to indicate a sponsored post. This is unlikely to be sufficient from the FTC's view because the meaning of the icon is not clear. Even if the icons are explained somewhere, it is usually possible for users to miss these explanations.
- Account for technological differences and limitations - Disclosure solutions need to work on all likely user platforms, or each platform needs its own working solution. One example of disclosure that simply doesn't meet this criteria is a tooltip that appear when hovering over a link. This can seem like a good idea - displaying the message "Affiliate Link" as a tooltip when the user hovers over an affiliate link as is about to click on it. Unfortunately, touch screens have no hover function, so this method fails on phones and tablets. (When paired with other disclosures, it may be a helpful additional form of communication with your users. However, it is not sufficient on its own.)
The FTC also admonishes publishers to track click-through rates for hyperlinked disclosures. They maintain that a low click-through rate (not many people viewing the disclosure) is evidence that the anchor text and link placement is not clear enough.
Interactive or Dynamic Disclosures
It's possible to place disclosure notices into floating sidebars that will follow the user as they scroll up and down on a page. You can also place disclosures in pop-up windows, or in an auto-playing video that launches when someone arrives on your page.
"Technical difficulties" or "user error" do not absolve publishers of their responsibility to provide clear and conspicuous disclosures.
Disclosures in Relationship to a Purchase Process
Disclosures must be presented to users before transactions are completed. However, displaying disclosures to users only during the checkout process is usually not sufficiently clear.
Rather, most disclosures, especially those related to compensation and conflicts of interest, need to be presented to the user before the sales and checkout process is begun - that is, before the user clicks the "Add to Cart" button. In the case of affiliate links, the disclosure needs to be made before the user encounters the coded affiliate links.
In the context of affiliate marketing, the needed disclosure on teaser ads can usually be provided by simply prepending the ad with the word "Ad:". This is especially helpful in the case of Twitter, when there is a character limit.
The important consideration is that it is clear that the Tweet, post, or message is being published with an underlying financial motive, and that the poster or publisher isn't simply an enthusiastic customer of the product.
Lack of space is not considered an adequate reason to omit required disclosures. In fact, the FTC goes so far as to say that if a particular media format makes it impossible to provide necessary disclosure, then the right solution is simply to not use that format.
The FTC makes it very clear that it is the advertiser's job to make disclaimers prominent enough to draw the attention of the user. Disclosures should be placed prominently so as to draw the attention of the user.
Some design details that contribute to effective disclosure prominence include:
- Size - Disclosures should be "at least as large" as the content they are triggered by.
- Color - Use of contrasting colors is highly recommended. Placing disclosure text in a color too similar to the background color may cause the disclosure to be missed by the user.
- Graphics - While not required, the creative use of graphics can help draw user attention to the disclosure.
It is the responsibility of publishers and advertisers to ensure that disclosures are prominent enough to draw user attention. The FTC offers the following suggestions for evaluating the prominence of a disclosure:
- Evaluate the size, color, and graphics of the disclosure in relation to other parts of the website, email or text message, or application. Context is very important. The size of text needed to make a disclosure appear prominent isn't an independent variable, but rather it depends on the surrounding material and the overall design, as well as the medium.
- Account for viewing on different devices. Users are likely to view your website, email, or other content on a variety of devices and screen sizes. It is important to keep this in mind when determining if a disclosure is prominent enough. Especially keep in mind how a responsive design changes on different screens. For example, a disclosure that appears in a sidebar, directly next to the primary content on a large desktop screen, might appear below the content when the design elements are reconfigured for a single-column mobile design.
- Don't bury it. Placing a disclosure within a larger paragraph or page of unrelated text is likely to make the user ignore it or otherwise not recognize its importance. This (maybe especially) includes disclosures contained within a large Terms of Service document, even if the user has to agree to the terms.
A disclosure notice might be clear and conspicuous on its own merits, but then be obscured or obfuscated because there are other, more attention-grabbing distractions on the screen at the same time.
Elements that may distract a user from noticing a disclosure include:
- Graphics - especially animated graphics, or graphics which appear to provide more important information
- Video - if the triggering claim and related content is in a video, but the disclosure only appears outside the video (for example, in a YouTube description or on-page text), the video may distract users from noticing the disclosure
- Buttons and links - especially if they are much larger or more visually interesting than the disclosure
In many cases, a single closure, no matter how well designed or prominently placed, is not enough to satisfy the "clear and conspicuous" requirement.
This might be the case, for example, if there are multiple "paths" through a site which a user might take, or multiple entry-points. In this case, depending on placement and site design, a user might actually avoid encountering the disclosure. The remedy for this is to repeat the disclosure - to display it multiple times.
In some cases, the best approach may be to simply repeat the disclaimer on every page.
Ads and online content may consist of one or more different media types. It is common to mix text with video, or animations with audio. Increasingly, users are provided with a rich media experience, with many different types of interactive content operating simultaneously.
Concerning multimedia messages, the FTC provides some important considerations:
Disclaimers should generally be contained within the media that they reference
That is to say, if a triggering claim is made within a video, the disclaimer should also be within the video. If the triggering claim is in an audio recording, then the disclaimer should also be contained in the audio.
This is not a strict requirement, depending on the specific case. However, it is a good rule of thumb. This is especially important in the case of media which may be embedded out of context.
For example, a video on YouTube may allow for disclaimers to be placed within the description. However, it is possible to for a video from YouTube to be embedded on another webpage without the description.
While that example is somewhat clear-cut, consider another case that may affect YouTube videos:
YouTube allows for two different types of text overlays on videos (called "Cards" and "Annotations"). These text overlays are not formally part of the video, but they do appear if the video is embedded onto another page. This maybe fine, but what if someone were to download the video and watch it apart from YouTube? If you make this type of access available, then you need to make sure that any required disclosures are contained within the video.
Another issue that affects video specifically, regardless of where or how it is posted, is that video contains both a visual component and an audio component. It is not always the case that everyone will consume both aspects of the video.
Besides the (perhaps) obvious example of blind or deaf users, there is also the case of people watching videos with the sound turned off or people listening to videos on one screen or window while working in another window or while away from their computer screen.
For these reasons, it is important that disclaimers be in the same modality as the triggering claim. If a claim is made in the audio portion of a video, while the disclaimer flashes on the screen, that probably isn't clear and conspicuous enough.
Display Visual Disclosures for an Appropriate Length of Time
A text-based disclosure that appears on a screen as part of a video or media interaction needs to be on the screen, in full view of the user, for a period of time sufficient for the user to:
- Notice it
- Read it
- Understand it
You should not assume that the user is a particularly fast reader, nor assume that the user will be notice and begin reading right away.
Disclosures need to be clear. That doesn't just mean how they look, but also the specific words used. And that clarity of language needs to be aimed at normal users, not lawyers or even the especially tech-savvy.
In the case of affiliate marketing, not all consumers know or understand what "affiliate marketing" is, or fully grasp phrases like "tracking link."
It is usually clearer to use words like "ad" or "sponsored" for short-form disclosures, and then link to a longer disclosure statement that clearly states something like "we get money if you buy something after clicking on a link on our site."
It isn't enough to make a disclosure. It is also your responsibility as a publisher and advertiser that the disclosures you make are clear and conspicuous, that users notice them, and are able to understand them.
To that end, it is much better to ask yourself, "How can I make sure that my users and site visitors understand what we're doing, honestly?" rather than trying to find a way to deceive your users while adhering to the "letter of the law."
Ultimately, clear and conspicuous affiliate disclosures improve the user experience, because they promote honesty and help users understand the nature of the media and content they are consuming.
While it may seem that it would be better for publishers and advertisers to be able to pretend that their reviews or other statements are 100% unbiased and uncompensated, in the long run it is more lucrative and satisfying to build a transparent relationship with a loyal audience who understands how your site, app, blog, or video channel earns money. And if you provide real value to your audience, they are usually more than happy to support your work through the purchases you are helping them to make.