Posted on December 01, 2009 by Tim Schroeder

Today is December 1st 2009 and it’s the official day that some new endorsement and testimonial FTC rules go into effect. These rules won’t apply to every type of site or affiliate campaign but it will greatly effect the CPA affiliate marketing industry as a whole. I am NOT a lawyer and don’t take any of my comments as legal advice!

Here are a couple important snippets:

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

So basically it looks like saying “results not typical” in tiny text in your landing page footer isn’t going to be enough. This is going to a tough rule to follow if you are pushing diet products (for example). There are hardly any diet advertisers that don’t boast exaggerated claims of weight loss and people don’t like to buy “Typical” results. This rule also applies to testimonials found on many affiliate sites. Here are a couple ideas:

1. Leave out SPECIFIC amounts or claims. For example, if you are a weight loss affiliate instead of exaggerated specifics use generic phrases like:

“Get A Flatter Stomach in 30 Days” That’s certainly possible.

“Get Ripped in Just A Few Weeks” This one is a close call but a few “weeks” could mean 4, 6 or more. Someone who is already in decent shape could conceivably get some nice abs in 6 weeks time. Just make sure you also include somewhere that at least some working out is required or this could fall into the deceptive category. If someone actually believes they can get ripped abs in 2-weeks without any type of workout they need a reality check.

2. Use only testimonials found on the advertisers website (there’s no need to use a fake comments section). For example, “When doing my research on these products here are some things actual users had to say…”

3. Get real testimonials sent to you from the advertiser. Most advertiser don’t do this but it would make things a whole lot easier.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed.

This guideline should be pretty easy to follow. Just add something like “yoursitename.com is an affiliate of “product name” and receives compensation from orders through this website.” If you are a blogger you now must also disclose the material connections you share with the seller of the product or service.

FTC states a possible fine of up to $11,000 per infraction.

What does this mean for the future of rebills and the future of affiliate marketing?

The game has already and continues to change for the good in my opinion.

You have the Google Bans:
It’s a good thing that Google is cleaning up their sponsored ads. However I certainly don’t agree with all the lifetime Adwords account bans. As long as the landing pages are FTC compliant they should allow most rebills in my opinion.

Yahoo and MSN are cracking down:
Yahoo has recently been cracking down more on ads sending messages such as “All price claims made in an ad must be clearly and accurately substantiated on the landing page. Ad creatives or landing pages that contain “free,” “complimentary” or synonymous offers must disclose the pertinent terms and conditions associated with the offer in close proximity to the offer.”

Affiliate Networks Are Losing Offers Like Crazy:
Many advertisers (including some of the biggest) are pausing or removing their offers all together until they are updated for FTC compliance. Although some advertiser simply don’t care and they are making so much insane amounts of money that a law suit means very little to them.

Ad Networks :
Many ad networks such as Adsonar/Quigo require strict guidelines (and they have for awhile) for affiliate landing pages (not mention of the word free without an *, advertisement text on the top of the page, full re-bill terms in the footer).

Re-bills/continuity programs are not the problem. Re-bills will always be around and they are certainly not all shady or lump into one group.

It’s the non-compliant advertisers with completely hidden terms and impossible cancellation policies that caused most of the current problems in my opinion. Some advertisers also need to drop all the crappy invisible upsells. If you have to pay affiliates less then we’ll deal with it. Heck, you might even have more affiliates pushing your offer if customers didn’t get the upsells and you could actually cancel the trials. Charge a higher price on the front end if you need to. The affiliate networks and some of us affiliate ourselves hold our share of blame. Without each other as a group the shady re-bill offers would go nowhere.

Most affiliates flock to the highest paying and highest converting advertisers which often times is also the shadiest. The compliant advertisers who also may not have the invisible upsells just can’t compete because of the lower payouts and lower conversion rates. If the networks refused to work with those non-compliant advertiser and those that add non-visible upsells this wouldn’t be as much a problem. Many CPA Affiliate networks already have and will continue take a revenue hit with all these changes as well. How fast will they evolve?

By the way, you are probably assuming that based on my examples above that I am currently running weight loss re-bills. The answer to that is no, I am not. I study ads, landing pages and methods in various verticals everywhere. I do run some re-bills (along with tons of non-rebills) in other verticals but I believe it is up to the individual person to decide how and what offers they feel comfortable running.

What’s your thoughts on the new FTC rules and the future of re-bills in general?