"We wanted to make clear . . . if you're being paid, you should disclose that."
Mary K. Engle, FTC associate director for advertising practices quoted in the Washington Post
If you're involved in the debate over undisclosed affiliate links you really need to watch this video of Mary Engle responding to a complaint about word of mouth marketing online. Word of mouth marketing was under the radar until it was not. Hidden affiliate links are under the radar right now, but they will not be for much longer.
If you're getting paid you need to disclose it, that's just the law. The only question is how do we disclose. There are levels:
Affiliate marketing is on the precipice of being regulated.
We've been having some great examples on my post yesterday on undisclosure of affiliate links. Over at ReveNews there are some comments as well. Many other the comments are sophisticated (and many are childish, but that's to be expected).
One of the more interesting ones I think is based on commerce sites. Should commerce sites disclose they are being paid? Probably not, because it falls into "SDOA" (standard disclosure of obvious advertising). It's clear that a commerce sites make money by selling something. So, if we walk in to Walmart we assume that they are going to make money when we buy a Diet Coke. However, when we walk into someone's house for a dinner party we don't expect they are making money when we drink a Diet Coke. If you site is a blog most users assume it's like a dinner party and don't expect you're getting paid for handing us a Diet Coke. If your site is callled "The Diet Soda Store" and it has ecommerce elements like a shopping card and prices we all know you're making money and no disclosure is needed.
99% of the problem in the affiliate space is because people are making non-commercial sites with hidden advertising links.
If you mix a non-commercial metaphor (blog, TV show, news paper article) with a commercial objective (selling something) and don't disclose you're going to create the follow pattern:
My feeling on the question of "should affiliates disclose" is currently as follows:
If you're getting paid you need to disclose it, that's just the law. The only question is how do we disclose. There are levels:
- 1. STRONG DISCLOSURE: Clearly labeling something an advertisement. Google does this by requiring you to say "Ads by Google." I would say this is the clearest form of disclosure.
- 2. STANDARD DISCLOSURE OF OBVIOUS ADVERTISING (SDOA): Magazines, TV, and newspapers achieve average disclosure without labeling advertising because it's so obvious to everyone when the ads start and end. When the editorial content is over on LOST you have a commercial come on and it's plain as day. When you turn the page in a magazine and see a Mercedes Benz or a vodka ad you just know it's not editorial because it is not in the same format.
- 3. STANDARD DISCLOSURE OF NON-OBVIOUS ADVERTISING (SDNOA): When advertising and marketing messages come in the form of non-advertising based media additional steps are called for. If a newspaper has five stories on a page and one advertisement that is formatted like the other stories--say the same font and column layout--a reader might be confused. So, newspapers put "sponsored" or "partner content" on these sections to make it clear. When a news network like CNBC carries a long-form commercial that is designed in a talk show fashion they put a warning up front that this is paid content. They put "paid programming" in the channel guide as well. You can read about magazine advertising standards here.
Affiliate marketing is on the precipice of being regulated.
We've been having some great examples on my post yesterday on undisclosure of affiliate links. Over at ReveNews there are some comments as well. Many other the comments are sophisticated (and many are childish, but that's to be expected).
One of the more interesting ones I think is based on commerce sites. Should commerce sites disclose they are being paid? Probably not, because it falls into "SDOA" (standard disclosure of obvious advertising). It's clear that a commerce sites make money by selling something. So, if we walk in to Walmart we assume that they are going to make money when we buy a Diet Coke. However, when we walk into someone's house for a dinner party we don't expect they are making money when we drink a Diet Coke. If you site is a blog most users assume it's like a dinner party and don't expect you're getting paid for handing us a Diet Coke. If your site is callled "The Diet Soda Store" and it has ecommerce elements like a shopping card and prices we all know you're making money and no disclosure is needed.
99% of the problem in the affiliate space is because people are making non-commercial sites with hidden advertising links.
If you mix a non-commercial metaphor (blog, TV show, news paper article) with a commercial objective (selling something) and don't disclose you're going to create the follow pattern:
- Most users will be duped and you'll get better performance than if you did disclose.
- A small percentage of users will find out and get upset.
- An even smaller percentage of those users will report you to someone (government, your partners, the press).
- The end result will be some combination of offenders getting caught and in trouble with the law or press, confusion in the marketplace and drive users away, or industry/partner censorship of you and your process.
My feeling on the question of "should affiliates disclose" is currently as follows:
- If you're not a pure commerce site you should disclose at the point of the advertisement.
- If you're a pure commerce site it doesn't matter because people expect you're going to make money. Commerce sites are obviously doing commerce when they have shopping carts, the ability to buy stuff, product listings, etc.
Comparison shopping links. Do these need to be labeled? I'm not sure, when I see five items listed by price at the end of a blog post or a news story I'm assuming it's an advertisement where people get paid. Does everyone understand that? Do most folks understand that? If you look the Chitika ads on GearLive (see right) do you think they are paid or not? - Partner or Offer Links: Is this clear to users? Many sites have "partner links" and I'm fairly certain those are paid when I see them (why else would they be listed as partners?). So, I know they are not just organic links, but do most folks know that "partner" means "commercial relationship" of some kind? I don't know. I think this is a jump ball. In the About.com section (see image below) do you think that users know that "Offers" means they are getting paid? I don't really know.
1. I must say, I think it is right to disclose anything and everything you are being paid for if it isn't obviously an advertisement. So a banner ad for example, that is obvious. It doesn't need text around it stating that it is an advertisement. You mentioned the Chitika ads that are on Gear Live to me at CES and how you weren't sure about them, and that got me thinking about them as well. I had thought that they were obviously advertising and that anyone would realize that, but I think that sometimes, we as geeks tend to forget that not everyone sees everything the way that we do.
So I asked around. People like my siblings who could care less about tech or the Internet, people like my Grandmother, etc. What I found, at least where Chitika is concerned, is that everyone realized that when they saw that, they were being advertised to at that point. However, I still think they can be better labeled maybe?
But then I compare it to Adsense, which Google labels automatically. I would think that, side by side, the graphic-rich Chitika block would be MORE obvious than an Adsense skyscraper.
The other thing about Chitika is that is pays the same way that Adsense does - CPC. My understanding (which I am the first to admit, may be incorrect) of affiliate links are that they pay a lot more than CPC based products, but the person has to actually take some sort of action like buying a product or giving their personal information AFTER clicking.
Posted at 2:17PM on Feb 29th 2008 by Andru Edwards