To disclose or not to disclose? The growing importance of affiliate disclaimers

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To disclose or not to disclose? As the influencer market grows and becomes more popular, it finds itself subject to additional scrutiny and has affiliates asking themselves to disclose or not.

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In a recent letter by the US Federal Trade Commission (FTC), the idea of disclosure presented itself to remind publishers they are required to explicitly state to audiences the existence of a commercial relationship, specifically when using Instagram.

The letter states that “if there is a ‘material connection’ between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed…. material connections could consist of a business or family relationship, monetary payment, or the provision of free products to the endorser. The Endorsement Guides apply to marketers and endorsers. FTC staff guidance makes clear that marketers should advise endorsers of their disclosure responsibilities.”

In an explicit reference to “influencers,” the FTC also states it is familiar with the latest trends in content marketing and brand relationships.

This notice is the latest in an increase of announcements from individual countries’ regulatory bodies alerting digital industries to their obligation to be transparent with consumers, making them aware of how shared content could be skewed or designed based on receiving a financial reward.

While many influencers and affiliates will go to great lengths to ensure advice and offers to brands is based on their actual endorsement – rather than swayed by network payments or freebies – being clear will ultimately build trust with consumers.

In April 2017 Performance Marketing Agency (PMA) released a disclosure whitepaper, “Blogging and New Media Disclosure Information," in response to the FTC letters. PMA states the new guidance from the FTC about Instagram "is directly in line with everything they have said so far about making it clear to consumers anytime there is a material relationship between the influencer and the brand."

Also in April 2017 the UK’s Advertising Standards’ Agency (ASA) and Code of Advertising Practice (CAP) issued some further guidance about affiliate marketing. This isn’t the first time they have shown an interest in our channel; a few years ago a group of affiliate networks (including Awin) met the regulator to explain the affiliate model. So it was clear this was something networks needed to be vigilant about.

In the update, ASA and CAP issued a great infographic, detailed various affiliate models and demonstrated how they might offer on-site disclaimers.

This point is particularly important as the diverse world of affiliate marketing means there is a wide range of media requiring different solutions. Consider a tweet’s 140 character limit. What sort of disclosure should an affiliate using Twitter offer? The CAP guide describes specific direction, stating on Twitter labeling the content with “‘Ad’ or similar is likely to be the clearest way to identify as advertising.

As websites offer more space to experiment with disclosure solutions, the guide offers this: “although not a requirement of the Code, affiliate marketers may choose to explain the nature of the relationship between themselves and the company by stating that they receive a small share of sales through the inclusion of links, promotional codes etc.”

On this point, Awin decided to assist affiliates with this four years ago with the launch of our paid advertising, one page website: Paid for Advertising.

The tone of the content is conversational and aimed at explaining, in simple terms, how content may have a commercial relationship attached to it. The focus is on the value exchange that the Internet trades on in order to facilitate so much free content.

While the site probably needs an overhaul, the intent is clear. Some affiliates choose to link to it; in this example an Awin affiliate has done so just below the fold of their ‘About’ page. 

The future of disclosure will probably be more formal and increasingly universal.

If you operate in a market where this has yet to register as an issue, then it’s highly likely it will do at some point. It is for industry to work collaboratively to agree standards and roll out solutions so that affiliates adopt the same approach wherever they are.

Ultimately this will breed familiarity with consumers and in doing so raise the overall standards and visibility of the affiliate channel.