FTC and Bloggers
The big news lately for anyone who owns a business are all the new rules the FTC which will be in effect December 1st, 2009.
Posts about it are ALL over the place. No point in linking to all of them. Do a quick search for “FTC and Bloggers” and you’ll be overwhelmed with posts.
You might have even heard it was the end of online marketing…the end of affiliate marketing…or the end of blogging.
Everyone has been yelling, “The sky is falling.”
The good news is that’s not true. It’s not the end of the world. The bad news is that you might have a few changes to your sites.
Here is a link to the FTC PDF about it.
Here is another PDF the FTC has published showing example testimonial scenarios.
Mike Young has published a PDF you can download for free here called, “How to Comply With the New FTC Compensation Guidelines.”
I’m not a lawyer…don’t play one on TV…and should be completely ignored when it comes to any legal issue.
What is causing the biggest issues and frustration for everyone involved is that the FTC seems to have purposely left everything as unclear as humanly possible. It’s so unclear in a few places that only the government could have created it. The example testimonial scenarios they released later makes a little more sense than the original.
This is likely so they have strong ammunition to go after whoever they want without regards to what’s ethical or not. They simply don’t like to lose.
I think the basic idea behind this is good. Get rid of the scammy fake blogs that are just there to promote garbage. Get rid of those overhyped testimonials from endorsers who may have never even used the product. Force people to honestly say when they’re making money from something instead of keeping it hidden.
Who could disagree with any of that? It’s the application that leaves some to be desired.
Because of this confusion, you even see many of the big internet gurus telling you to eliminate all testimonials – just remove them all.
They’re wrong.
Here are a few key points that may affect you.
#1 – Bloggers need to fully disclose any relationships with people, products, and sites they review.
On blogs I see this as a very good step.
You’ll notice I already regularly tell you I get an affiliate commission for some link, someone sent me a free copy of their product, or that someone is a friend of mine. This is a for-profit blog and I make no excuses for that. This change will simply mean I’ll be even more conscientious about making sure all readers know this.
I think Michel Fortin did an excllent job of posting his blog Disclosure Policy here.
This hits those bloggers who do paid reviews more than anyone else. In addition if you’re a reviewer and people send you free copies of their products, you need to state this now. Again no big deal. A lot of people talk quite a bit about transparency in blogging, so I don’t understand why they would get so upset about having to reveal this type of information.
The bigger difficulty comes when you move over to social media and sites like Twitter. How do you reveal your correct connection to something when you’ve very limited in the number of characters you can use? That’s going to more difficult and confusing about what needs to be done.
#2 – You can be held responsible for what your affiliates say about your products.
This one is another one that is going to cause a lot of hassles for us small businesses. You need to police everything your affiliates say about you on their sites, in their blogs, and in their emails. Wow…that’s a lot of work.
For some, it’s going to discourage them a little from having “open affiliate” programs. Instead they may focus on having invitation only affiliate programs or all affiliates have to be approved first (not a bad idea actually).
But the reality is that we should have already be monitoring what affiliates say about us. What promises are they making? Whenever I’ve seen affiliates making hyped up claims, we’ve contacted them with the threat to remove them completely. Now we’ll have to do more in this area in keeping an eye on our affiliates.
If you think about it, network marketing companies have already had to do that for decades. They had distributors and had to watch what their distributors shared. Now we have to do the same with any of our affiliate distributors (for those of you who run 2 tier affiliate programs there are even more similarities).
#3 – Testimonials must be more representative of typical results.
This is a hairy one. What is the typical results for example for someone who buys an internet marketing ebook?
In my OPINION the average result is that they completely ignore it and buy another one without ever using it. Then of course they generate exactly zero results.
But notice I said that was my opinion. From the FTC’s examples, it sounds like we simply need to be much more clear about the testimonials and how they achieved the results.
What else was behind the results that we’re not seeing.
For example, in the internet marketing field you sometimes see someone said, “I bought so-and-so’s product…and made $83,000 in just 3 days.”
Will the typical customer get those results? Nope. No way. Not going to happen. Why did they do so well?
Perhaps they already had a large customer list. Perhaps they already were making $300,000 monthly and one tip helped them bump the response way up. For example, with coaching clients I’ve found it much easier to take someone who is at $10,000 a month to $20,000 a month than it is to get a brand new beginner from $0 to $1,000. It’s because of momentum. Just making a few changes to their sales page can sometimes do that.
So the FTC wants to make sure we being more clear on WHY someone achieved much better than typical results to give people a better understanding. This means we will have to go in more detail about what happened and why.
Instead of being lazy and just letting testimonials come in, we need to contact our best ones and find out more details. In other words, turn them more into case studies instead of “hiding” anything going on behind the scenes.
Here’s another example. If you’ve ever looked at “weight loss” ads in men’s magazines, they often feature a man who makes an incredible transformation. Yet if you look closely he appears to be very muscular (such as an amateur bodybuilder who’s been training for 5 to 10 years) with just 20 pounds or so of extra fat on him.
He loses weight incredibly quick, but it’s quite possible he is USED to already doing that because of competitions. He bulks up and then loses weight. Perhaps the product they’re selling only influenced him with a couple extra pounds or he did it one day quicker (assuming the product does actually work). To not reveal that factor is being very deceptive.
Recently I asked my subscribers for testimonials and feedback. Below are some of the ones I received. Many of them seem like they would still be fine under the new regulations, BUT take notice of the first one. It is most definitely NOT what the typical customer can expect…not even close. This is one of the ones I’ll have to check more into.
Very few people ever generate $60,000 in 10 days. This means I’d need to contact David and find out more details about this before I could ever use it. The typical beginner won’t get that result. So how do I classify him and what sets him apart from the typical buyer? That’s what I’ll have to find out now.
"Terry Dean has played an instrumental part in my success online. His protege' instruction on Joint Venture Marketing alone led me to generate over $60,000 in sales in just 10 days! If Terry says "this is what's working", you can take it to the bank."
Dave Lovelace
Pinehurst, North Carolina
30DaysTo1K.com
Here are some of the other ones without specific income claims.
And a special thank you to EVERYONE who sent in a testimonial even if I don’t have yours listed here.
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LookSexyNow.com
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Fort Collins, CO
Smallbusinessvictory.com
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Onlinefinancialcopywriting.com
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Jakarta, Indonesia
Welly-Mulia.com
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Tal Fighel
Toronto, Canada
Work-at-home-income-directory.com
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Semmy Lauw
Myminisitegraphic.com
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Terris Business Consulting Worldwide
Waukegan, Illinois
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14 Responses to “FTC and Bloggers”
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Terry,
There’s so much rumor and nonsense floating around online about this now. I think your “end of the world” metaphor was apt.
I appreciate your well-reasoned and thoughtful explanation which is much needed in the current frenzy being whipped up by sometimes well-meaning but misguided folks out there.
God Bless,
Kevin
Hi Terry,
Thanks for keeping me informed about this kind of stuff. I can always depend on you to present this information in a reasonable, non-dramatic way.
Thanks again-
-Mary
Hi Terry,
I met you 10 years ago and you were the understated reasonable one even then – while Ted and the gang were doing more of a circus routine.
Thanks for the solid info.
Hi Terry:
Thanks so much for looking out for us “little guys” who are just starting out. The information that you provide, for free, from the goodness of your heart, is very much appreciated! I’m so glad that I met/found you and look forward to soaking up much more info/wisdom from you!
Keep up the great work! and thanks once more.
Joe B.
Hi Terry,
How does this affect non-US internet marketers or does FTC have authority on overseas too?
Thanks,
Timo
Thank you everyone for your compliments.
Timo: As far as I know, the FTC doesn’t have any authority overseas, BUT if you were to break their rules and have a US web host, you could get canceled. Or if you’re an affiliate with someone in the US, that affiliate program would cancel you if you broke the FTC rules (to protect themselves).
And the interesting thing is once you see the rules for what they really appear to be, many other countries are likely to follow similar policies or possibly already do.
Hey Terry,
With the new FTC rules, I hope that more people, especially beginners, will be more realistic when trying to target their income, since we should be seeing less hyped-up testimonials over the web. No more $10,000 in 3 days!
And thanks for including my testimonial. It’s my pleasure to give an honest testimonial to someone whom I’ve learned a lot from.
Best Wishes!
Welly Mulia
“#2 – You can be held responsible for what your affiliates say about your products.”
I wonder how this is going to affect clickbank publishers?
Ben
Hi Terry,
I have been following your website for a couple of weeks now and I must say you definately over deliver information and are an inspiration to how operating a business online should be!
Thank you for giving us your take on these new guidelines. I am only new to affiliate marketing and have only 1 product for sale. I do have a blog and have listed a disclaimer on there already. However my question to you is what do we do now when we already have hundreds of open affiliates already promoting our items. For example having a product listed with paydotcom or clickbank?
My product is with paydotcom and after checking today I have nearly 900 affiliates promoting. Should we be deleting all the affiliates and introducing an invitation only situation where they need to reapply to promote our products and that way we can keep an eye on how they promote our products?
I am really curious as to what your opinion would be on this.
Kind Regards
Jacinta Dean
(an Aussie mum trying to set up a business online while her 2 year old sleeps!)
Welly: I hope so also. You have to remember though that many people are likely not to follow the rules. So they will still have those huge numbers from experienced marketers without giving all the details. I’m sure there are people right now figuring out how they can “stretch” the rules as far as possible.
Ben: I agree. I wonder what Clickbank is going to do as they seem to consider themselves the “publisher” of the product – which means they are definitely responsible for these rules (both the testimonials and affiliates) along with the authors.
Jacinta: In my own business I don’t CURRENTLY have any plans to cancel currently active affiliates. They will just be monitored more. For any specific situation, I have to refer you to a lawyer for legal advice. Remember, I’m simply a writer, not a lawyer and can’t give any legal advice.
I will watch this carefully but I am sure people will find a way to do it their way. The idea is a good one but sometimes, is just not enough. Also wondering what will do Clickbank.
Hi Terry,
Just a quick comment to say thank you for your reply to my previous comment. This is definitely going to be an interesting change!
Now I just have to find myself a good local lawyer. Living in Australia our laws are different however I do believe it is important to make sure we all comply with international laws and YES a lawyer is the best option!
Thank you! Kind Regards
Jacinta
Hello Terry
This is my first visit to you blog, WOW full of Information.
FTC is alot to police and could be off putting for many newbies.
Still you can’t take away the Internet is a great business to be in.
Thanks
Dean Oram
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