FatCow Affiliate Disclosure Requirements, and FTC Frequently Asked Questions.
In 2009, the Federal Trade Commission (FTC) published Guides Concerning the Use of Endorsements and Testimonials in Advertising (the "FTC Guidelines"). These FTC Guidelines require companies and individuals who receive compensation for endorsing a product or service to clearly disclose this connection to the consumer. As a result, any affiliate who receives compensation for endorsing or promoting products or services using reviews, rankings, blogs, videos, articles, or other testimonials must clearly and conspicuously disclose this financial incentive.
FatCow requires all of its affiliates to comply with the FTC Guidelines. Failure to do so may result in removal from our affiliate program and the cancellation of all outstanding commissions owed to the affiliate.
We realize that, on the surface, some of these guidelines may seem onerous, but not only are they required by U.S. law, but we believe such transparency ultimately creates happier, long-term customers, which works towards everyone’s best interests. We certainly value long-term customers over short-term customers, and our most profitable long-term affiliates are those who deliver long-term customers.
To comply with the FTC Guidelines,you must disclose that you are receiving commissions, and these disclosures must meet four basic requirements: disclosures must be frequent, clear, conspicuous, and require no scrolling or other type of user action to locate.
Frequent: Your disclosure must appear on every page that has a review, recommendation, comment, graphic, widget, sidebar, "native ad," or other content that promotes a product or service for which you receive compensation. Such content includes articles or other informative pages that mix promotion with unrelated technical advice or recommendations, pages containing affiliate links or graphics, and pages displaying thumbnails, previews, teasers, links, or feeds that lead to promotional content or contain such content themselves.
Clear: If you receive compensation for your review or rating, it must be immediately clear (i.e., unavoidable) to the consumer.If commissions, conversion rates, or any factors other than those listed in the body of the rankings, comparisons, or reviews are influencing the information on your site or how it is arranged, then you must clearly explain this. Whenever possible, incorporate disclosure language directly into promotional claims and recommendations rather than putting it in a separate disclosure.
Do not promise or imply neutrality or independence when, in fact, commissions and/or conversion rates are determining or influencing the presentation of information. If you are receiving commissions from all of the brands listed on your site, you must state this. You must disclose that your business incentives are driving placement or ratings if that is the case. In addition, disclosures about your business incentives should be consistent with all other content on your website. For example, if one part of your website makes a factual claim or suggests that the information you present is objective, that claim must be true -- you can’t undermine, contradict, or otherwise "go back on" it in a separate disclosure.
Finally, if your site mixes content related to a product or service for which you receive compensation with other, unrelated content, a visitor should easily be able to tell which parts are influenced by compensation and which are not. This may require placing multiple disclosures on the same page -- for example, next to each promotional item in a news feed, or at the beginning of an article within a news feed and next to a "Top Sites" widget appearing in a sidebar further down the page. Vague catch-all statements such as "the commissions we receive may affect certain articles or rankings on our site" are insufficient.
Conspicuous: The disclosure must be easy to see, distinct, and unavoidable. It should begin with a self-explanatory signal - e.g., "Disclosure," "Paid Advertisement," or something similar. No scrolling away from the promotional content should be necessary to locate the disclosure. For example, a site with multiple affiliate links should have a disclosure visible on the same screen as each affiliate link, and a website with promotional articles or lists should display disclosures in close proximity to that promotional material, not tucked away in a sidebar or footer.
Disclosures must be prominently displayed so they are noticeable to consumers and should be of a size, color, and graphic treatment that sets the disclosure apart from other parts of the webpage. For example, disclosures should be in a font size that is at least as large as the main text on the page and in a contrasting style and/or color to the surrounding text.
Require No Action: Your disclosure must be immediately evident to a typical visitor to your site who views a review, ranking, or endorsement. A visitor should not need to scroll, click, or hover to learn that you receive compensation. In certain circumstances, you may be able to include a clickable link for additional information when a visitor hovers over text, provided that the language of the link itself reveals the fact that you receive compensation -- e.g. "Advertising Disclosure: We are compensated for our reviews. Click here for details."
Special Guidance for Consumer Reviews and Endorsements:
If you include consumer reviews, feedback, or endorsements about products or services listed on your site, you must comply with the FTC Guidelines prohibiting the biased manipulation of consumer reviews, including the following:
- Consumer reviews and endorsements should be representative of the types of experiences potential consumers (i.e, your audience or visitors) can generally expect to have when purchasing or using the product or service being reviewed or endorsed. Otherwise, if the reviews or endorsements do not represent typical circumstances, that information should be clearly and conspicuously disclosed, along with supplementary details regarding the more general type of experience or performance potential consumers can likely expect.
- You should not offer inducements or incentives in return for positive reviews; you should not pretend to be a consumer yourself, nor should you write fake reviews (including about a competitor).
- You should clearly state how reviews are obtained and verified, and you should publish all reviews, including the negative ones, provided that they are genuine and truthful. You should also explain the circumstances under which reviews might be edited or not published at all (e.g., if they include abusive language or defamatory remarks).
- You should ensure that reviews are current (i.e., not stale, not too old), and you should have appropriate procedures in place to detect and remove outdated or fake reviews.
Select excerpts from FTC Endorsement Guides FAQs:
The FTC has published answers to Frequently Asked Questions applying directly to the FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising. For your convenience, we have reproduced some of the most applicable ones below. Still, we encourage you to read the FAQs from the FTC in their entirety.
I’m an affiliate marketer with links to an online retailer on my website. When people read what I've written about a particular product and then click on those links and buy something from the retailer, I earn a commission from the retailer. What do I have to disclose? Where should the disclosure be?
If you disclose your relationship to the retailer clearly and conspicuously on your site, readers can decide how much weight to give your endorsement.
In some instances - like when the affiliate link is embedded in your product review - a single disclosure may be adequate. When the review has a clear and conspicuous disclosure of your relationship and the reader can see both the review containing that disclosure and the link at the same time, readers have the information they need. You could say something like, "I get commissions for purchases made through links in this post." But if the product review containing the disclosure and the link are separated, readers may lose the connection.
As for where to place a disclosure, the guiding principle is that it has to be clear and conspicuous. The closer it is to your recommendations, the better. Putting disclosures in obscure places - for example, buried on an ABOUT US or GENERAL INFO page, behind a poorly labeled hyperlink or in a "terms of service" agreement - isn't good enough. Neither is placing it below your review or below the link to the online retailer so readers would have to keep scrolling after they finish reading. Consumers should be able to notice the disclosure easily. They shouldn't have to hunt for it.
Is "affiliate link" by itself an adequate disclosure? What about a "buy now" button?
Consumers might not understand that "affiliate link" means that the person placing the link is getting paid for purchases through the link. Similarly, a "buy now" button would not be adequate.
I guess I need to make a disclosure that I’ve gotten paid for a video review that I’m uploading to YouTube. When in the review should I make the disclosure? Is it ok if it’s at the end?
It’s more likely that a disclosure at the end of the video will be missed, especially if someone doesn’t watch the whole thing. Having it at the beginning of the review would be better. Having multiple disclosures during the video would be even better. Of course, no one should promote a link to your review that bypasses the beginning of the video and skips over the disclosure. If YouTube has been enabled to run ads during your video, a disclosure that is obscured by ads is not clear and conspicuous.
Do the Endorsement Guides apply to social media?
Yes. Truth in advertising is important in all media, whether they have been around for decades (like, television and magazines) or are relatively new (like, blogs and social media).
I’m a blogger and a company wants me to attend the launch of its new product. They will fly me to the launch and put me up in a hotel for a couple of nights. They aren’t paying me or giving me anything else. If I write a blog sharing my thoughts about the product, should I disclose anything?
Yes. Knowing that you received free travel and accommodations could affect how much weight your readers give to your thoughts about the product, so you should disclose that you have a financial relationship with the company.