By now you’ve heard that, as of December 1, 2009, the Federal Trade Commission (FTC) changed the rules regarding product endorsements, using testimonials in marketing, and affiliate marketing in general. If you live outside the United States, the rules still apply if you plan to sell inside the United State, even if you only sell online to Americans.
While you may know something about the changes, what you may not know is how much of a difference they will make to your business. What first got my attention were the postings in many forums about the new laws regarding the use of testimonials and payments to affiliates for promoting products. Under these new rules (put in place mainly because of Acai product abuse), you can no longer display the best results from an offer unless you also show the average results, and you also must disclose if you’re making a commission by recommending a product.
Also under these strict new rules, marketers can no longer make any claims about a product they endorse unless they personally use and can scientifically verify the results they’re claiming. Keep in mind that the rules were designed to protect the consumer, not hurt affiliates.
After reviewing the rules at length, to me, the bottom line seems to be that as long as your marketing is completely transparent, with no results-based testimonials, and you include a complete affiliate referral-fee disclosure … and you have your customers’ best interest at heart, you should be fine. Note that I’m not a lawyer and this isn’t legal advice. I just get advice from my friends in the industry who are lawyers, and you should do the same.
Now, what if you were able to make money as an affiliate without making a claim as to how amazing your product is, you fully disclosed that you are getting a commission, and used social media to market it, in complete compliance with the new FTC rules? It may seem like a tall order to do so, but I’m just asking, “What if?”
These new rules will change the market in a big way. My guess is that 75% of the online marketers who use fake stories, exaggerated income claims, flogs, and hype to sell their products will go away. In the end this will actually be better for the rest of us. It leaves the market available for people who sell in an open, honest way.
And it shows that telling the truth will get you longer-term profits in the long run every time.