The FTC (Federal Trade Commission) passed new regulations that will affect Internet Marketers in regards to the Guides Concerning the Use of Endorsements and Testimonials in Advertising section.
The changes they’ve made affect bloggers and website owners who use testimonials or those with celebrities. If you’re an affiliate marketer, it affects you, too. While most of the buzz was about celebrities who fail to disclose they’re being paid or receiving freebies when touting a certain product, it’s smaller entrepreneurs we’re concerned about.
You’ll want to do ample investigating on your own before you start promoting anything for a paid commission. This article isn’t meant as legal advice for you – it’s simply an observation about the new rules and how we might feel their impact.
The point of the changes is to connect the dots for consumers between advertisers and endorsers. Not everyone has an Internet marketing background and can spot an affiliate review compared to an unbiased, unpaid one.
This will affect marketers who make up their testimonials. Some of them have written up their own testimonials and bought a stock picture of the “testimonial giver” – falsely making the consumer believe people have gotten good results with the product, when it fact not a single person had tried or purchased it yet.
Traditionally, advertisers could simply put an asterisk next to a real testimonial with the words “results not typical” in fine print. This was still shady because it wasn’t blatantly exposed on the site.
Now, if you get paid a commission, or if you got a freebie in exchange for recommending a product, then you’d better openly disclose that connection to your readers or you could face an FTC fine.
There’s no broad laws governing bloggers and marketers, though – the FTC says each case will be investigated individually. Aside from the payment being disclosed, you also have to be honest. You can’t say something helped you make $10,000 in revenue if it didn’t – and if you get caught, you could be forced to pay up.
Now if you’re caught, the burden is on the FTC to prove their case and how it violates the FTC Act. You can order a copy of the FTC’s updated Act here: FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The bottom line for 2010 is – don’t cheat your readers out of an honest review, even if that means you admit you’re getting paid for your opinion!