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Affiliate Marketing and the FTC

I am surprised how little the affiliate marketing crowd understands or is aware of the FTC's agenda on deceptive advertising, especially as it relates to business opportunities - buying yourself a job.

People are just not getting it.

Here is Brian Clark, a former attorney, writing at his blog Copyblogger, about testimonials and endorsements for business opportunities.

Brian, who is a smart guy, writes about disclosing your affiliate links:

"Many of my friends in the affiliate marketing industry did not take kindly to my legal observations at the time.

And a lot of people are upset right now, but the FTC will still remove all doubt about the fact that disclosure of compensation and conflicts is required.

Now it becomes clear that even something as small as an Amazon affiliate link to a book or DVD requires disclosure. That represents a big shift in the way things have worked so far."

This is not the big story for affiliate marketers like Brian Clark.  Brian, among many others, markets business opportunities, such as Teaching Sells, which I actually joined.

But here is the problem.  Testimonials, like this:

I joined Teaching Sells on day one, and after completing the core program I successfully transitioned my flagship SEO Book into an interactive learning environment. The results have been stunning so far." ~ Aaron Wall, SEOBook.com

The "results have been stunning so far" is usually accompanied with a standard disclaimer - "your results may very", or something like that.

This standard disclaimer about earnings potential simply isn't going to work any more. From Hugh Latimer writing about disclaimers.

"At a hearing of the Senate Commerce Committee's consumer protection subcommittee on July 22, 2009, controversy burst forth over the FTC's proposed changes to its advertising guidelines, particularly with respect to consumer endorsements representing a non-typical experience and whether a bare disclaimer of "results not typical" would continue to be permissible.

Current Federal Trade Commission endorsement guidelines provide that a consumer endorsement will be interpreted as representing that the endorser's experience is representative of what consumer's "will generally achieve with the advertised product," for which the advertiser must have adequate substantiation, or "clearly and conspicuously disclose the limited applicability of the endorser's experience to what consumers may generally expect to achieve." § 255.2 (a).

The FTC's pending proposal to significantly curtail, if not eliminate, the use of "results not typical" disclaimers has provoked the controversy.

At the Senate hearing, David Vladeck, Director of the FTC's Bureau of Consumer Protection, testified that § 255.2 (a) of the FTC's current guidelines inadvertently extended an "open-ended invitation" to advertisers to make inflated claims through consumer testimonials that should have been prohibited.

He added that FTC research has shown that the bare "results not typical" disclaimer has not been effective in eliminating consumer deception.

Here is Vladeck's testimony before the Senate about misleading advertising.  Read it and as a marketer of business opportunities, you will realize that disclaimers are simply not going to cut it any more.

Related articles by Zemanta

• FTC to Close Loopholes in Blogger-Marketer Relationships (technosailor.com)
• Some Bloggers Welcome FTC Scrutiny for Paid Reviews (pbs.org)
• U.S. plans to monitor blogs for biased claims, payments (cbc.ca)
• Marketers Manage Bad Blogger Press with Trade Groups (businesspundit.com)
• FTC's Vladeck: The Era Of Self-Policing Online Ads Is About To Change (paidcontent.org)
• Internet Marketer Alert! The Government is Coming! The Government is Coming! (marketingpilgrim.com)

Full post as published by Misleading Advertising Law on August 20, 2009 (boomark / email).