New FTC Guidelines for Bloggers & Internet Marketers – The Good, The Bad, and Everything Else You Need to Know

December 14, 2009 - Written by Gyutae Park  

ftc-disclosure-scrillaIf you haven’t heard about the new FTC guidelines regarding the use of endorsements and testimonials in advertising by now, you better get up to speed fast. On December 1, 2009, the new regulations went into effect and they have big implications for bloggers and Internet marketers.

You can see the full text of the FTC’s final guides governing endorsements and testimonials (link to PDF on the right sidebar). It’s an 80 page document, but it may be worth going through if you’re doing any kind of advertising or endorsing online through your blogs, sales pages, marketing campaigns, etc.

The new guidelines state the following:

1. Endorsements must be based on the honest opinions and experiences of the endorsers. Paid actors must be disclosed if they are used.

If you’re a blogger offering paid reviews, you can’t write glowing recommendations (against what you really think) just because you were paid for it. Reviews and endorsements must reflect true opinions and any money being exchanged must be disclosed (described in #4).

2. Endorsements may not contain any representations which would be deceptive, or could not be substantiated, if made directly by the advertiser.

If you’re an affiliate of a certain product, you can’t claim any benefit or result unless it’s something that the advertiser can say directly. For example, you can’t say that a weight loss product helps people lose 20 pounds in a week unless it can be proven by the advertising company.

Believe it or not, a lot of shady affiliate marketers used to write fake reviews of products with outlandish claims, just so that they could make more commissions. This sort of practice is very deceptive and wrong, but there’s no denying that it works in terms of making money. Thankfully, under these new guidelines, this sort of thing is now banned.

3. Endorsements must be representative of what most consumers can reasonably expect to achieve. Any claim made by the endorser must reflect the opinion or experience of a significant proportion of consumers. Disclaimers like “results not typical” are no longer sufficient.

A common marketing tactic is to display testimonials or case studies where amazing results were achieved. Examples include how a certain diet pill helped someone lose 50 pounds in 6 months or how an online training course helped someone else make $1 million. Advertisers frequently used these types of stories to lure people in – without having to clearly specify that similar results are actually very difficult to obtain (other than a tiny “results not typical” disclaimer).

Under the new guidelines, any claim made by endorsers must be indicative of results for the majority of people, not just a select few.

4. All material connections between the advertiser and the endorser (including research or medical organizations) that consumers would not expect must be disclosed, including free products or monetary compensation.

All payment for reviews or endorsements must be disclosed, including monetary compensation and free products/services. This is especially relevant for bloggers and celebrities who write paid reviews/tweets/whatever.

Who Does This Apply to?

If you make money online, chances are pretty high that these new regulations affect you in some shape or form. Bloggers must be transparent and honest, advertisers can only claim “typical results”, and affiliate marketers must stay within the confines of those advertiser claims. And in case you were wondering, these new regulations apply to all areas of the web – including blogs, social media, sales pages, emails, PPC and banner advertisements, etc – but only in the US.

Apparently you need disclaimers on tweets and Facebook status messages too. But paid links (for SEO purposes) and affiliate links by themselves are likely okay.

The penalty? Fines for violating the new rules could be up to $11,000 per instance. However, keep in mind that the FTC guidelines do not have the force of law (although the FTC can still sue for violations) and are mainly for advertisers (not individual bloggers). In fact, back in October, Mary Engle, associate director for advertising practices at the FTC stated that they will not be patrolling the blogosphere or investigating bloggers. Responsibility falls on the advertisers and that’s who the FTC will be targeting with the guidelines.

My Thoughts on the Guidelines

The Good
I’m definitely all for the FTC cleaning up spam and protecting consumers from shady marketing scams online. I’ve seen this sort of stuff first hand, and it really isn’t pretty. It’s easy for people to be tricked by the deceptive ploys online – which could negatively affect their health or finances. If anything, the regulations will instill confidence in the minds of online shoppers and further legitimize the real businesses out there doing it right.

Bloggers especially stand to gain. Being transparent is never a bad thing, and I think the disclosure will make bloggers more trustworthy overall. After all, it’s okay to write paid reviews – but readers deserve to know the motivations of why a certain product or service is being featured (sponsored or not).

The Bad
That being said, marketing online will become much more difficult with these regulations in place. For example, effective marketing tools like hype, case studies, and testimonials will take a major hit. How do you get people excited about something if your claim is something unspectacular like “lose 0.5 pounds in 3 months” or “make $10 working from home on the Internet”?

It’s the extraordinary claims and possibilities (even though they represent uncommon results) that sell people on an idea – and these claims don’t necessarily have to be deceptive or misleading. The new rules essentially take this option away and advertisers will need to find new ways to play on people’s emotions. Product Launch Formula guru Jeff Walker recently had to take down all of his students’ case studies.

The Uncertainties
confusedguyI understand that the FTC’s intentions are good, but the steps for implementation and enforcement of the new guidelines are vague at best.

For example, what exactly is a “typical result” and how is it defined? How will the FTC police all of the marketing and advertising activity that goes on online? What about the offenders who operate outside of the US? Furthermore, can a review or endorsement truly be “honest” if money changes hands?

The FTC has stated that they will only go after advertisers in cases that are black and white and that they are “not interested in playing gotcha in gray areas”. But really, with such vague guidelines, what’s black and white?

Practical Applications
Alright so now that you’ve spent some time learning about the new FTC guidelines and how it applies to your business as a blogger, affiliate marketer, or advertiser, what are some things you should be doing now?

If you’re a blogger who accepts compensation for posts, create a disclosure policy page. For ideas, John Chow has a humorous one here and Jim Kukral has a more serious one here. You can generate your own at DisclosurePolicy.org. Also, be sure to disclose your affiliations with the product or company at the end of reviews or endorsements – whether you were paid up front, paid affiliate commissions, or even scored free review products. Michael Gray recently listed one out at the end of a review post.

Disclosure: This was not a sponsored post; however, I was comped a subscription to easytweets. A positive review was not required or incentivized in any way.

Again, the FTC will not be going after any individual bloggers, but this is all good practice so that advertisers will be willing to work with you under the new guidelines.

As for the “typical results” claim (#3), be sure to frequently survey your customers so that you have a better understanding of what you can realistically offer. Of course, you never want to stretch the truth, but you can always present the data in a way that is favorable for your marketing (e.g. amount of money made by users who finished an entire Internet marketing training program AND started an online business).

What do you think about the new FTC guidelines? Do they significantly affect the way you run your online business? Leave your thoughts in a comment here below.

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Comments

27 Responses to “New FTC Guidelines for Bloggers & Internet Marketers – The Good, The Bad, and Everything Else You Need to Know”

Chris Peterson on December 14th, 2009 Subscribed to comments via email

Thank you so much Gyutae Park for providing the information about New FTC Guidelines for Bloggers & Internet Marketers. Very helpful information…I feel a lot better about what I can and can’t do, and appreciate the way you made this available to so many at no cost. You have helped many people through this thoughtful contribution.

 
Joan Miller on December 14th, 2009

Thank you for the overview. Regarding the $11,000 fine – apparently that isn’t true. Jim Edwards recently interviewed a FTC official which helped clarify and dispel many of the rumors. The interview here: http://www.igottatellyou.com/blog/ftc-change-interview/

 
John Paul on December 14th, 2009

If you build your business with moral ethics and a “no bs” way then you will be fine.

Now if you push the line with ridiculous headlines and crap testamonials, then yes you will feel the hit.

But like everything else, I’m sure smart IM’s will work around this, and great new ways to attract attention will be rolled out.

 
AffPortal on December 14th, 2009 Subscribed to comments via email

I will be interesting to see the follow up action by the FTC on affiliates who still run flogs and farticles.

I’m hoping in the long terms it levels the playing field for new affiliates to find success in the industry. It certainly has become more complex than a few years back when I started…

Good recap of the new regulations.

~ Corey

 
poorwebguy on December 14th, 2009 Subscribed to comments via email

Great information. I agree with the “vague” thought on some of these new guidelines. Something did need to be done regarding alot of way over the top advertising but I feel there would have been greater benefit from more targeted and defined guidelines.

Another thought…knowing the FTC can’t possibly enforce this everywhere will this negatively effect US marketers ability to compete with some overseas?

Probably not much but just a thought.

 
Dianne Binford on December 15th, 2009 Subscribed to comments via email

Thanks for the great summary Guy. What are your thoughts on Bantoff – a news agency whose sole focus is creating news articles to post on websites in order to improve SEO rankings. Any ideas about their integrity, client base, effectiveness, etc?

 
Kai Lo on December 21st, 2009

This will be very interesting especially when it hits the news about blogs getting cracked down on fake reviews. It will stop a lot of affiliates because most of them do write fake reviews of products.

 
Dan Lew on December 21st, 2009 Subscribed to comments via email

Looks like FTC is starting to give clearer information. Sounds pretty explanatory, thanks for the breakdown

 
Melvin on December 22nd, 2009 Subscribed to comments via email

Up to now I still think all these ftc guidelines are ridiculous. Anyways, I live in Asia so it doesn’t apply to me right?

 
if i only commented 4 traffic on December 23rd, 2009 Subscribed to comments via email

Transperancy is great, but my only issue is if WE have to be transperant then why the F don’t banks, credit agencies and every two timing sneaky big corporation out there also have to…

I can’t help but feel that the FTC is focusing on less important areas. What we do is so small compared to how much crap big businesses get away with.

 
Jose Anajero on December 23rd, 2009 Subscribed to comments via email

Thanks Gyutae Park for your post dissecting the new FTC guidelines. Am right now studying web copywriting and I should read that guidelines.

You said “Endorsements must be representative of what most consumers can reasonably expect to achieve. Any claim made by the endorser must reflect the opinion or experience of a significant proportion of consumers. Disclaimers like “results not typical” are no longer sufficient.”

I think that makes a lot of sense.

I hope the implementation of the new FTC guidelines help clean the industry. I believe regulation has a significant role but it’s not enough. People themselves should also have discernment. Am just glad that after many months of pursuing dead-ends, after having been lured by deceptive advertising, I’ve now found good people who are teaching me real internet business.

Jose

 
The Net Fool on December 30th, 2009

Thanks so much for this update, I had no idea that there were legal changes in place for paid promotions! I’m pretty sure that not a whole lot of people are aware of this… but I think that all of the changes are thought-through and fair in nature. I don’t like shameless promotion one bit, so this should work out well.

I’ll try to re-post this in one form or another on my blog and give you credit for the idea, thanks for the heads up.

 
Niche Blueprint 2 on January 3rd, 2010

Ethics and No BS or Crazy “Hype” seem to be the way forward, thanks….

 
Tom - marketing tips on January 4th, 2010

I don´t think you will have any problems with FTC if you are honest and sincere.I guess FTC wants to weed out scammers and b*s claims with these rules.

 
Stuart Conover on January 5th, 2010

Wow, I’m glad I decided to stop by WTW to catch up on articles from the past couple of months…

While this doesn’t directly apply to anything I do online a few of my friends might be a little sketchy on how they do affiliate marketing and I think I’m going to have to quickly point them at this post :)

 
escorts-münchen on January 6th, 2010 Subscribed to comments via email

Thank you for your article. Now I am informed about the new FTC guidelines for Bloggers.

 
Link Wheeler on January 8th, 2010

I think it is a fair set of rules, it helps pick out the legitimate businesses from the scammers.

 
Joe on January 11th, 2010 Subscribed to comments via email

I think it’s a good idea that the FTC is getting involved in cleaning up the internet from shady scams. Hopefully, other countries will get involved as well.

 
Kristine on January 11th, 2010 Subscribed to comments via email

Here I am quite confused as per the regulations. I have just a question in mind – What if I have a blog that provides reviews of products and services? I will have to put up a disclaimer for each and every post that I am not doing this for the sake of money and just for letting my community aware of my opinions about the product or services? If that is right then there a many of us who have such blogs and sites. The question is that in countries where people who are into blogging will they be able to pay the monetary penalty?
Yes, I appreciate the fact that this step will cut down spam but wont it be the good who will suffer?

 
Manchester UK based SEO company on January 12th, 2010 Subscribed to comments via email

I don’t think this could really work. I guess its worth trying . I’ll give it a shot.

 
Jack of Tonerboss on January 13th, 2010

How about if I include posts about my company’s products – HP Toner Cartridges for example – but I am not directly paid for that post?

Or my post is purely informational based only from the internet?

 
Jack of Tonerboss on January 13th, 2010

How about if I include posts about my company’s products – HP Toner Cartridges for example – but I am not directly paid for that post?

Or my post is purely informational based only from the internet?

 
Joshua Andrews on June 11th, 2010 Subscribed to comments via email

I do not think these guidelines are being followed in US by any affiliate or online marketer. By the way, i agree with some of them claiming unrealistic claims but relating to other i think marketing does involve these whether it is offline or online.

 
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