This session was all about the new FTC Guidelines for Affiliate Marketers.  It was quite eye opening

Oprah, Flogs, and the FTC - Hot Topics 2010

Presenters
Pete Wellborn - Wellborn, Wallace & Woodward, LLC - Started Internet Law in 1996
www.WellbornLaw.com

Bennet Kelley
The Internet Law Center
www.InternetLawCenter.net

Pete Wellborn Speaking

Understand the issues and know when to ask the questions - you don't necessarily have to know the answers

Affiliate programs are a victim of their own success. 

Ad content Summed up in 3 Words:
Truth
Proof
Fairness

FTC Prohibits deceptive and unfair ads
Deceptive Ads and Misleading Common violations

Unfair Ads
Causes or is likely to cause injury that is substantial AND Not outweighed by the benefits

Who is Liable? In a nutshell, everyone in the sales chain/funnel:

Seller - Manufacturer or Provider
Ad Agencies- negligence standard
Site Designers- negligent standard
Affiliates - negligent standard
Individuals - personally involved

Negligence Standards- knew or should have known that the ad included false or deceptive claims.

The bottom line - Control everything you can control

Rules of Thumb:
- Truth - always provide truthful statements
- Consumer point of view - what would someone think if they were reading your ad or site?
- Proof - prove what you can say -
- Careful: Disclaimers/Disclosures
- Careful: Endorsement Claims

Testimonials and "Free" Stuff

Flogs

Proof of Claims

Bennet Kelley Speaking

Celebrity Endorsements
- Has to be honest opinion and belief of the endorser
- Endorser has the same claim-standard as seller
- Endorsers must continue in belief - what this means is if the person endorsing the product or service changes their mind, you have to remove their endorsement.  Here is an example using Acme People Search.

Let's say Tissa writes a post on the forum touting my blog as THE OFFICIAL training blog for APS.  He then gives me permission to state on my blog that "Tissa says My Blog is THE Official training blog for APS.  Send all your referrals to my blog for APS training".  This goes on for a month.  Then, I break Tissa's terms and conditions and he no longer endorses my blog as The Official APS training blog.  It is my responsibility to remove the statements as they are now misleading. 

Does this make sense?

- Statements must be made in context - you can't take a statement "out of context" and use it to sell - you either have to include the entire statement or leave out the statement completely.

- Consumer endorsement must be disclosed (got free product or getting paid for review) - this one is pretty easy.  You need to make sure you have a statement somewhere on your site that you get paid for selling ABC product or referring buyers to ABC product.  Here is the statement I now have included on every single blog post of mine (this actually may be over kill - I could probably just stick it on the top or bottom of the page)

"CONSUMER NOTICE: This is an affiliate ad supported website. That means if you buy something from a link, or an ad on this website, or based on our recommendation, either expressed or implied, we may get paid an affiliate commission. That is how we pay the bills."

- claim has to be usual or customary - in other words, whatever you claim has to be the usual or customary results or expectations the consumer can expect - another example - you should not claim in your ads or on your site that "you can make $10,000 a month with ACME People Search" because this is not what the average person should expect to make - it is misleading

- A consumer in an ad has to be an actual consumer, not an actor - testimonials need to be true testimonials, not paid actors

Expert Endorsements
- "Expert" Must be an expert

Organization endorsements
- True collective judgement/opinion
- Must be true

Material Connections
- Connection between endorser and seller that might materially affect the weight or credibility of the endorsement must be fully disclosed.
- Rule often applies where endorser is not celebrity or well-known expert
- connection may be money or publicity

Everything we are talking about is a business decision

Free Stuff - use of the word free - free means FREE - there cannot be any hidden cost whatsoever

- "Regular Price" means sames price, in the same quality, quantity

The next few items are very legal sounding and are just bullet points:
Proof of claims
-Required Proof of Ad claims
    - Reasonable basis for all express and implied claims
    - Reasonable = content + presentation + context + qualification
    - Amount and type of substantiation/proof

Type of Product (health products = high level)
Type of claim
Benefit of Truthful Claim
Cost of Substantiation
Consequences of False Claim
What experts in field say is reasonable

When is scientific evidence is used or required
- Prove stated level of support ( 4 out of 5 dentists agree)
- amount and type of proof varies (anecdotes not enough)
- Quality of evidence (competent and reliable)
- Totality of Evidence (Can't ignore unfavorable)
- relevance of studies to claim (study matches claim)

In summary, here is a great rule of thumb to follow for all ad copy and website copy:

Think about your business and try to determine if your friends, family, mother, kids, or grandmother would find it confusing.

The line is blurred between internet, media, and print media.

They said we could email them with any questions.  Be sure to reference the session at Affiliate Summit West.

pete@wellbornlaw.com

bkelley@internetlawcenter.net

Go to FTC website and look at guidelines and case studies for more information -

All of this applies to all media including video as well

In the "make money online" niche, it is required that the usual and customary results must be fully disclosed on the site. It cannot be on a different page that is accessed through a link. Example - the average affiliate with this program makes $xxx with this program.

Hey guys, ask questions by PMing me because I probably won't see your questions here.

Brett