Tricia Meyer

Affiliate Marketer, Blogger, and Consultant

Affiliate and Influencer Disclosure Cheat Sheet

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Now that we have had some time with the newly revised FTC Disclosure Guidelines, we are starting to think about the practical application in addition to the big picture. One of the questions that I have been asked the most is about what exactly the FTC has said can and cannot be used for disclosure.

It’s a little tricky because the actual “Guides Concerning the Use of Endorsements and Testimonials in Advertising” themselves do not give us examples but rather just the overall rules. So we have to look to other resource documents like “FTC’s Endorsement Guides: What People Are Asking” and “Disclosures 101 for Social Media Influencers” to find specific examples right from the mouths (or keyboards) of the FTC. In addition to the shortened cheat sheet examples I give below, those documents give a LOT of other examples of “natural language” disclosures that can be used when speaking in videos, writing long-form content, etc.

Which Hashtags Can Influencers and Affiliates Use to Properly Disclose?

The FTC has given us three specific hashtags that are approved: #ad, #Brand_Ambassador, and #Brand_Partner. These assume that “Brand” is the advertiser name. The FTC clearly favors #ad, saying that the other two are “more understandable” than just #Ambassador or #Partner. That’s not a lot of specific hashtag examples that the FTC does approve, but they do give us a lot of which they do NOT approve.

Which Hashtags Should Influencers and Affiliates NOT Use?

The FTC gave us a LOT of examples of hashtags that it does not consider to be clear enough for one reason or another. These include:

  • #Brandad
  • #Endorsement
  • #Client
  • #Advisor
  • #Consultant
  • #Ambassador
  • #Partner
  • #FreeProduct
  • #Comped
  • #Hosted
  • #Spon

How Else Can Influencers and Affiliate Properly Disclose?

Although the FTC was stingy with the hashtags, they did give us a lot of other words and phrases that can be used. One of their biggest complaints with hashtags in general seems to be that smushing all of the letters together makes them hard to read and understand. So merely separating out some of the words makes a lot of things more usable. Here are some specific examples that would be in compliance:

  • Ad:
  • Paid Ad
  • Advertising:
  • Sponsored by Brand
  • Promotion by Brand
  • BrandPartner
  • Brand Ambassador
  • Paid Post by Brand
  • Advertisement
  • Gifted by Brand
  • Paid Link
  • Thanks Brand for Free Product

What Other Disclosures are Not Approved?

Although there are a lot of disapproved hashtags, there are only a few other phrases specifically disapproved by the FTC due to them not being clear enough to consumers:

  • Gifted
  • Affiliate Link
  • Buy Now
  • Commissionable Link

Which Disclosures Depend on Context According to the FTC?

In addition to all of that, there are some places where the FTC has said that specific disclosures depend on context. One of these, Sponsored, is particularly interesting because they say it is fine in the Influencer 101 document but then say that it depends on context on the most recent document. Some of the others are going to depend on what they look like when written out (#PaidforByBrand) or what exactly the endorser is getting from the brand (Thank You Brand). Best just to stay away from these in the gray area:

  • #PaidforByBrand
  • Sponsored
  • Promotion
  • Thank You Brand
  • Brand Asked me to try Product
  • Brand_Consultant
  • Brand_Advisor

As a reminder, ALL of these disclosures are still contingent upon following the FULL set of disclosure guidelines (clear and conspicuous, unavoidable, etc). In addition, we sometimes get more specific examples through Twitter chats, FAQs, Letters, and other proceedings. We may even see some updates regarding these words specifically as people ask the FTC questions. See my full disclosure recap post for all the rules plus any recent updates!

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FTC Updates Disclosure Guidelines for Affiliates and Influencers

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FTC Guidelines

We have been waiting for this update for a LONG time and it is finally here! The FTC has updated its Endorsement Guides, which are the source of the disclosure rules that affiliate marketers and influencers (among others) must follow. I think my favorite part of this new update is the reference to “dog influencers.” Most of this is what we expected when we saw the proposed guidelines changes back in May of 2022.

I’m breaking this down into two sections– what I think is most important for affiliate marketers and all of the other interesting stuff. It’s 80 pages of Guidelines talk plus another whole site of FAQs, so there is a lot to cover!

First, the tl;dr for Short Attention Spans

  • Affiliate marketing and influencer marketing were heavily targeted
  • Everyone can now be liable–bloggers, influencers, affiliates, agencies, advertisers (no mention of tracking platforms/networks unless they are also acting in the capacity as agency)
  • “Clear and Conspicuous” means “Unavoidable”
  • Advertiser and intermediary responsibilities include 1) provide guidance on the rules, 2) monitor compliance, 3) take  action in the event of non-compliance
  • Reliance on disclosure tools built into social media platforms may not be adequate
  • Review sites cannot accept payment for rankings
  • Effective disclosure is based on who is being targeted as the audience (children, elderly, etc.)

FTC Guidelines Updates Most Important to Affiliate Marketers

  • Saying this loud for the people in the back because I see this wrong on so many “expert” sites. “Affiliate link” is not an adequate disclosure. Which means “Affiliate” also would not be adequate. Other related terms that are not adequate include “Buy Now” and “Commissionable Link.” However, “Paid Link” is adequate.
  • Endorsers can be held liable for a review when they represent falsely that they personally used the product.
  • Tags in social media posts can be considered endorsements that have to be disclosed if the influencer has a material connection to the brand. For example, if you post a picture of your outfit and tag the brands you are wearing but you are also getting paid by them or sent free products. Simply tagging the brand is also not a sufficient disclosure.
  • An influencer cannot simply disclose connections to a brand on their profile page. The disclosure has to be done on the post and be unavoidable when viewing it.
  • Endorsers cannot rely on the built-in disclosure tools of a social media platform if anything in those tools would make the disclosure not satisfy the “unavoidable” and “clear and conspicuous rules.” Use them but add to them if what they have isn’t sufficient.
  • Whether a disclosure is effective will be evaluated from the perspective of the TARGET audience (e.g. kids or elderly or people who speak a foreign language).
  • So what about affiliate managers and agencies? We sort of got an answer. “Advertising agencies, public relations firms, review brokers… and other similar intermediaries” can be liable when they “create or disseminate endorsements” that they either knew or should have known were deceptive. But they can also be held liable when they “hire and direct” endorsers who do not properly disclose. Your company must have “reasonable programs in place to train and monitor the influencers you pay and direct.”
  • What is the standard for monitoring endorsers? They won’t give specifics. They say “reasonable efforts” and if you can’t periodically search for what the endorsers are saying, you should consider having to pre-approve all posts.
  • Affiliate review websites that rank brands higher based on the site accepting money from the brand are deceptive and both the website owner and the brand can be held liable. The site can use affiliate links in general and disclose them as long as payments are not taken for higher rankings. Any “methodology that results in higher rankings for products whose sellers have a relationship to the operator because of those relationships” is misleading.

FTC Guidelines Additions and Clarifications That Are Interesting

  • For disclosures to be effective, they must be “unavoidable.” 
  • Some examples given for adequate disclosure for videos are “This video is paid for by brand” or “brand paid me to tell you about it.” Also “Company X gave me” the product or “The products I’m going to use in this video were given to me by their manufacturers.”
  • Some examples given for social media are “Ad:” “Paid ad” “#ad” “Advertising:” “Advertisement” “Sponsored” “Promotion” “Sponsored by X” or “Promotion by X”. Adding “ad” to the end of the brand name to create a hashtag is NOT enough. (#BrandAd) Saying “thanks” to the brand is not enough but saying “Thanks Brand for the free product” would be. The hashtag #endorsement is NOT sufficient. The hashtags #ambassador and #partner work only if you include the brand name in the hashtag (#BrandAmbassador). The hashtags #comped and #hosted are not sufficient for free travel.
  • Podcasters do not need to disclose content that is “obviously a commercial” and is fine as long as the podcaster upholds any views expressed.
  • A little more information was given about free products. If a brand sends a coupon to an influencer for free product and asks the consumer to feature the brand in their feed, any resulting posts would need to be disclosed. (this is where the “dog influencer” came in)
  • Advertisers are required to 1) provide guidance to endorsers on the rules, 2) monitor compliance, 3) take  action “sufficient to remedy non-compliance and prevent future non-compliance.”
  • Advertisers need to not only instruct endorsers about the need to disclose their connection, they also need to give guidance that any statements made by the endorser are truthful and substantiated. 
  • If the endorser is an “expert” in the field, there are a lot of clarifications about how that should be handled.
  • There is an example about a woodworking influencer who is sent a lathe and for free by a brand and ends up using it in several videos and “comments favorably.” The FTC says that if a “significant minority of viewers” is “likely unaware” that he got it for free, it needs to be disclosed. There isn’t any type of exception made in the example for videos that may be made using that same lathe for years in the future. The Q&A page indicates “each new endorsement made without a disclosure could be deceptive because viewers might not have seen the prior posts.”

Important Links

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FTC Issues Proposed Changes to Endorsement Guides

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FTC Disclosure Changes

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In February 2020, the FTC solicited feedback on the “Guides Concerning the Use of Endorsement and Testimonials in Advertising.” On behalf of the Performance Marketing Association, I submitted comments. Today the FTC voted to release proposed changes to the Guides and open that proposal up for public comment. You can read the full document here. 

The document is 77 pages long, so I am going to attempt to break down what I consider to be the most important parts for affiliate marketers. Comments can be filed online here.

Key Takeaways

If you want a TRUE tl;dr, here it is:

  • “Affiliate Marketing” as an industry is being specifically added to the Code of Federal Regulations endorsement guidelines.
  • Influencer marketing is heavily on the FTC’s radar.
  • The Guides are codifying liability for advertisers, affiliates, and even agencies.
  • Affiliates and influencers cannot rely on the disclosure tools built into social media platforms.
  • “Clear and conspicuous” means that the disclosure is “unavoidable” in any way by the consumer.
  • Affiliate managers are being told more specifically that they must educate affiliates, monitor affiliates, and take action when there is a violation.

And now for more of the details!

Definition Changes

The FTC proposes to add “marketing” and “promotional” messages as endorsements. This specifically includes when a brand is tagged in a social media post. 

The FTC proposes defining “clear and conspicuous” as “difficult to miss (i.e. easily noticeable) and easily understandable by ordinary consumers.” The focus will be that the disclosure is “unavoidable.” When the endorsement is visual the disclosure must be visual. When the endorsement is audible, the endorsement must be audible. When the claim is both, the disclosure must be both (think in terms of videos).

Although this is similar to the informal guidance the FTC has given, it codifies into the actual Guides.

Another addition (that will be particularly important as they meet to discuss children and advertising later this year) is that if an endorsement targets a specific audience, the disclosure will be evaluated from the perspective of that group. Consider specifically ads that target older adults.

Affiliate Marketing Specifically

Although it doesn’t come until halfway through the document, I’m bringing this up early because it obviously impacts every one of us. “Multiple commenters” asked for “affiliate relationships” and “affiliate links” to be addressed (American Financial Services Association, BBB, Shirley Boyd, Council for Responsible Nutrition, Consumer Reports, Jim Dudukovich, Maastricht University, and News Media Alliance). A new example (Example 11) will specifically address affiliate marketing.  This isn’t new information, but it does make it clear that affiliate marketing is being targeted as a part of the Guides and almost 10% of the commenters included something about affiliate marketing needing to be included.

“Example 11: A coffee lover creates a blog that reviews coffee makers. The blogger writes the content independently of the marketers of the coffee makers, but includes affiliate links to websites on which consumers can buy these products from their marketers. Whenever a consumer clicks on such a link and buys the product, the blogger receives a small portion of the sale. Because knowledge of this compensation could affect the weight or credibility site visitors give to the blogger’s reviews, the reviews should clearly and conspicuously disclose the compensation.”

Advertiser Liability for Endorser Actions

Advertisers can be liable for the failure of the affiliates to disclose. Advertisers should take 3 important actions regarding endorsements made on their behalf. 1) Provide guidance regarding appropriate disclosure, 2) monitor for compliance, and 3) take action to remedy non-compliance and prevent future non-compliance.

Affiliate/Influencer Liability

A new section will be created for endorser liability. This line is interesting: “The level of due diligence required by the endorsers will depend on their level of expertise and knowledge, among other factors.” Section 255.1(e) would specifically state that an endorser may be liable for “failing to disclose unexpected material connections between themselves and an advertiser.”

Intermediary Liability

Regarding specific intermediaries such as agencies and PR firms, a new section will be added. The key line in this is that intermediaries may be held liable for “hiring and directing the endorsers who fail to make necessary disclosures.” I’m interpreting this to mean that an affiliate manager COULD be held liable depending on what they tell the affiliate regarding endorsement. The footnote cites a case where the intermediary “recruited, hired, and instructed influencers…but did not require the influencers to disclose compensation.” Another change would be to make clear that these provision apply to “paid consultants.”

Platform-based Disclosure Tools

The PMA comments included a desire for the social media platforms to build in disclosure tools that would satisfy the Guides. Currently many of the tools deployed by the platforms are not in compliance but affiliates and influencers rely on the tools. Although they did not codify it, the FTC stated in this proposal and the meeting that both the endorser and the platform could be left open to liability if the tools are not sufficient. The FTC stated in its commentary that some of the existing built-in tools are “too poorly contrasting, fleeting, or small, or may be placed in locations where they do not catch the user’s attention.” This reiterates what I have been saying about affiliates needing to understand the Guidelines and not rely on the platforms.

Marketing to Children

A lot was said about marketing to children and how to appropriately disclose material connections and endorsements. If you are a merchant or affiliate who specifically markets to children, this is something that will be addressed throughout this year and again specifically in October.

I’ll continue to update my post Affiliates Take Note: New FTC Disclosure Guidelines to be the central location for the latest disclosure information. Overall, I don’t think this is really significant except that the FTC wants to be sure that they can make pretty much anyone in the chain liable. This allows them to go after anyone involved. Given that this is the CFR and not their supplemental documents that give extra examples and guidance, I’m not surprised they didn’t go further into the weeds. But I would have liked to have seen them give us more specific language on exact, simple disclosure options as well as how advertisers/agencies should be monitoring endorsement. They also specifically mentioned affiliate marketing but did not go so far as to say that “affiliate” would be a sufficient disclosure. There’s still work to be done!

FTC Proposes Changes to Disclosure Guidelines

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FTC Disclosure Changes

The FTC came out with two documents this week that are significant for affiliate marketers, influencers, and merchants. For all of the background information on where the FTC currently stands, check out my post Affiliates Take Note: New FTC Disclosure Guidelines. It includes 7 years worth of statements, settlements, and updates from the FTC in one place.

Right now the FTC is talking a lot about “influencers” and doesn’t distinguish how they are paid. In affiliate marketing, we might want to know if they are being paid when people click on their links or use their exclusive coupon codes or whether they are flat fees (or maybe a combination of both). But for purposes of this discussion, the FTC does not seem to care about payment details and is more concerned in general about the practice of influencer marketing and how brands are using the influencers to get away with advertising that doesn’t look like advertising (they actually call it “launder advertising” and “illegal payola” which makes it sound even more sketchy!)

Statement of Commissioner Rohit Chopra

Let’s start with the Statement released on February 12, 2020. Regarding the Endorsement Guides Review.

The Commissioner cites that influencer marketing will reach $15 billion for 2022 and that it is getting harder for families and small businesses looking for truthful information. It also believes the tech companies are part of the problem and not the solution right now.

In an interesting statement and a change from the website that was fined last week, the Commissioner says that they want to “focus on advertisers, not small influencers.” Specifically “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern.” Chopra seems most frustrated that past enforcement (like the Lord & Taylor settlement) isn’t “deterring misconduct in the marketplace” and wants to be able to pursue larger sanctions against companies in violation.

Chopra wants to review the Endorsement Guides and would like the FTC to:

  1. Develop specific requirements for any technology platform that facilitates or in any way profits from influencer marketing.
  2. Turn the “guides” into codified rules that will allow for both civil penalties and damages.
  3. Give specific contractual requirements that all influencers will have to follow in their campaigns.

So after a long time of wondering if the FTC was going to actually take the disclosure guidelines seriously, I think we have our answer. There’s just too much money being made not to.

FTC Looking for Public Comment

As mentioned in Chopra’s statement, the Commission wants to review the current Endorsement Guidelines and is now seeking public comment: FTC Seeks Public Comment on Its Endorsement Guidelines

This is an opportunity for our industry to officially tell the FTC what we like and don’t like about the Guidelines. What is possible for us to do and what isn’t.

A proposed Federal Register Notice gives a lot more detail about what the FTC is going to be considering. The questions are just a starting point and not a limitation on comments. Further, the FTC would like commenters to submit any available evidence and data that they have, including consumer complaints. You can read all of the proposed questions yourself but these are the ones that stuck out to me with my comments in the parentheticals:

  • Do the Endorsement Guides describe any practices that are not deceptive or unfair? (maybe for us, we think we should be able to use the word “affiliate”?)
  • What is the degree of compliance with the Endorsement Guides? Do covered businesses and others following the Guides’ suggestions self regulate…such as through trade associations? (We know that many, many affiliates do not comply. If most are not complying, what incentive is there for the ones that are?)
  • What burdens or costs have the Guides imposed on small businesses in particular (OPMs, I think this could include you)
  • There are a few questions regarding the reviews of free and discounted products as well as incentivized consumer reviews.
  • This is a big and important one so I am just going to copy it all in!! “Some endorsers (including the authors of some product reviews) include affiliate links that can be used to purchase the products they are endorsing. Should the Guides address such links, and if so, how? To what extent do consumers expect that these endorsers are compensated for purchases through those links? If so, what compensation arrangements do consumers ordinarily expect? To what extent would knowing of such compensation affect the weight or credibility given to those endorsements? Is there a distinction in terms of either consumer expectations or the weight ascribed to an endorsement between affiliate links to a product’s marketer and affiliate links to one or more retailers? If so, how, why, and how should that be addressed? “
  • What disclosures, if any, do advertisers or the operators of review websites or review platforms need to make about the creation, collection, processing, or publication of reviews or ratings in order to prevent those reviews or ratings from being deceptive or unfair? (This one seems to come out of that settlement from last week that I mentioned above. Does it mean they ARE focused still on the publishers when it comes to affiliate links versus the advertisers when it is social media influencer marketing?)

This is just a sample of the included questions. The FTC clearly knows that their Guidelines are not really useful, not being followed, and don’t have as much teeth as they want them to. Now is our opportunity to help set the course going forward. The Federal Register notice gives more information on how to submit your comments (including online or paper). While the date isn’t set yet, it will be around April 13, 2020.

How do you think the Guidelines should be changed? Should they be enforced more or less?

 

Key Takeaways from New FTC Disclosure Settlement

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Just when it seemed like things were getting quiet with the FTC regarding disclosure and I was thinking that the new administration didn’t care so much about it, a new settlement was announced today regarding commercial endorsements. (If you want to see all of my research and updates on FTC disclosure, this post tracks them: Affiliates Take Note: New FTC Disclosure Guidelines)

The basic facts are that PR firm Creaxion Corporation paid two gold medal Olympians (Carly Patterson Caldwell and Jake Dalton) to promote a mosquito repellent on their social media during the 2016 Olympics (back during the Zika virus outbreak). They also partnered with Inside Gymnastics magazine to get endorsers and promote the product. The PR firm “drafted, reviewed and monitored” social media posts and advertorials made by the endorsers, and the magazine often reposted the endorsements on its own social media.

The allegations that apply to us most as influencers or affiliate marketers were that 1) the endorsements were not “independent experiences or opinions of impartial users” because they were part of an ad campaign, and 2) the endorsers “failed to disclose, or disclose adequately” that they were being paid for their endorsements.

Here is an example from the appendices that is particularly interesting to me:

It says “Made it back to the US! Thanks fitorganicusa for protecting me during my trip in Rio!!” The FTC is reiterating that “thanking” the company isn’t enough of a disclosure because it doesn’t indicate clearly that you are being paid. Recall that they did tell us this in a press release back in 2017 “Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.” I bet I see 100 “thank you” type “disclosures” a week on Instagram. Not sufficient!

Click here to see all of the examples used in the complaint. 

Agency Responsibility

The results of the settlement were in line with what we have seen from the FTC thus far. It focused on the agency responsibilities.

  1. The agency has to provide the endorser with a clear statement of their disclosure responsibilities.
  2. The agency needs a system to monitor and review the disclosures.
  3. The agency must “immediately” terminate or cease payment if disclosure is not adequate. However, they can give an endorser time to remedy it they think it was inadvertent.
  4. The agency must keep reports of the monitoring.

We are seeing this same basic results in almost every disclosure/endorsement case.

Key Takeaways for Affiliate Marketers and Influencers

After diving into all of the documents, here are my key takeaways from the settlement:

  • The FTC is still pursuing disclosure cases, but it can take years for them to come to an end (this is from 2016 and is just now at the settlement phase). Does that mean we will be seeing more and more as influencer marketing gets bigger?
  • The influencers were not a party to this settlement but rather the PR Firm and the magazine. Did the influencers get out early or is the FTC still focused primarily on the brands? We did see them target the influencers with letters last year but no settlements yet.
  • Agencies are clearly bearing most of the responsibility (and sometimes the brands) in failure to endorse cases.
  • Instagram is a big target of the FTC.
  • This is the second time that the FTC has told us that “thanking” a brand is not a sufficient disclosure.
  • The FTC is establishing a very systematic approach to the education, monitoring, and tracking of endorsement relationships.

Although I don’t think that anything new came out of this settlement, I think that it gives the FTC more teeth to continue to go after others for actual money and not just cessation of activities in the future. The more that the FTC continues to lay this foundation, the better chance they have in future cases.

Are you still seeing affiliate marketers and influencers who fail to properly disclose? Do you think this type of action by the FTC will create changes?