The New FTC Rules and Transparency

If you haven’t heard already, the FTC (Fed­eral Trade Com­mis­sion) will be imple­ment­ing some new rules tomor­row that directly effect blog­gers, affil­i­ates and mar­keters. I didn’t find out about it till a cou­ple days ago and I’ve been look­ing through some infor­ma­tion on it this weekend.

I’m no lawyer or any­thing but this is what I think it basi­cally comes down to: For any endors­ing, tes­ti­mo­ni­als, or affil­i­a­tions, you need to be very clear of your rela­tion­ship with it. You need to be trans­par­ent with your ads and affiliations.

This infor­ma­tion I’m post­ing here is just from what I have read from other sources, so I would sug­gest doing your own research on this. This is only what I’m get­ting from what I’ve read so far. It’s a basic overview of what I have gath­ered. So if I goof up on some­thing let me know.

Affil­i­ates

This one is two fold. If your an affil­i­ate for a pro­gram or prod­uct, you’ll need to have some­thing that will let poten­tial cus­tomers know that you are an affil­i­ate and if they buy this you will get a commission.

On the other hand if you have affil­i­ates sell­ing your own prod­ucts, you will want to let them know these rules as well. At least cover your rear end any­ways, as you are just as liable as the affil­i­ates pro­mot­ing your product.

Tes­ti­mo­ni­als

When we get tes­ti­mo­ni­als, we want to use the best ones. These are the ones that we received from some­one that found our prod­uct or ser­vice extremely use­ful. If they bought your pro­gram and made a ton of money from it, then sent you a tes­ti­mo­nial about it, of course your going to want to use it. A tes­ti­mo­nial that holds you high regards and says they made a ton of money with your pro­gram, is very aspi­ra­tional for new poten­tial customers.

And while it’s not lying in any way, not every­one is going to get the same results from it. Some­one else that buys your prod­uct and doesn’t imple­ment it as well, isn’t going to make near as much. So it varies from per­son to per­son. This is what you need to relay to poten­tial cus­tomers. I’m not sure on the details of this par­tic­u­lar change, but I do know that just sim­ply putting “results may vary” isn’t going to work anymore.

Endorse­ment

They also cover endorse­ments, and it goes a lit­tle some­thing like this. You may buy a cer­tain prod­uct all the time and then try a new one. If the new one is much bet­ter then what you were using, and you decide to blog about it, that’s fine. But if you were to say sign up for a pro­gram that sends you free prod­ucts to review, then you need to make that clear.

Basi­cally if you spend your own money on some­thing and make a review about it by your­self it’s okay. But if you are given some­thing from a com­pany specif­i­cally to make a review about it then you need to state that somehow.

This is just a small por­tion of the updates, but are pretty impor­tant. And I thought I would share the infor­ma­tion I have gath­ered with you. As I said, I’m no expert, but this is what I get from my own research.

Basi­cally it means that online mar­keters need to be trans­par­ent on their rela­tion­ships with adver­tis­ing. It’s so that when you click on a link, you know what you may be get­ting into. It’s to stop decep­tive adver­tis­ing basically.

Which I think is a good thing in a way. If you are hon­est your busi­ness ven­tures and your busi­ness (which you should be) then I think this is a great idea. Peo­ple are slow to trust a lot nowa­days, and I believe this may even­tu­ally help with that. Even­tu­ally peo­ple will come to trust peo­ple that sell things online. At least a lit­tle more anyways.

Trans­parency is impor­tant any­ways. It cre­ates trust and cred­i­bil­ity. And peo­ple are more likely to buy from some­one they trust and know then a ran­dom encounter.

With that said, here is some more infor­ma­tion about the new FTC rules that may clear things up. I haven’t got into great detail on the rules here on this post as I’m still doing some research myself. And I’m no expert on these things and prob­a­bly never will be. But this effects every­one so I thought it was impor­tant to help spread the word about it.

Here you can find more infor­ma­tion and the rules from the FTC site.

http://www.ftc.gov/opa/2009/10/endortest.shtm

After look­ing over that a bit, here are a few posts that I found that explain things a lit­tle bit more.

http://www.joelcomm.com/new_ftc_rules_for_testimonials_1.html

http://www.theinternetpatrol.com/the-new-ftc-rules-on-bloggers-blogging-testimonials-and-endorsements-explained/

http://www.clicknewz.com/2061/ftc-update

These are just a few resources I have found that may help explain things a lit­tle bet­ter. I would sug­gest look­ing up some more info on google if it’s still not clear. And I would con­sider going over every­thing with a pro­fes­sional if you can. Such as a lawyer.

So now, as mar­keters, we need to become more trans­par­ent in our rela­tion­ships with other peo­ple. And I think that is a good thing really. If you are run­ning an hon­est busi­ness, there shouldn’t be any­thing to worry about. Becom­ing more trans­par­ent is a good thing. It cre­ates trust. Which seems hard to come by these days.

Peo­ple are nat­u­rally skep­ti­cal of things and I can’t say I blame them. There are a lot of scams out there. But there are also a lot of peo­ple mak­ing an hon­est liv­ing online. I think this move by the FTC will help those people.

~Chris

Have the new rules affected your busi­ness at all? If so how?

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