Have you been the recipient of communications from affiliate marketers or web-based entrepreneurs? Many of you have created or signed up to participate in affiliate programs. The government considers your affiliate activities to be a business activity and has a few things to say about what you can and cannot do. If you’re new to the game of affiliate marketing, it’s best to set up your program right the first time around. Here are action steps for ensuring you’re marketing your affiliate program the legal way.
What is An Affiliate Marketer?
You act as a referral source for another business for compensation. Or you get a percentage of each click-through from your site to another site.
For example, if I sell baby clothes and seek out a really popular mommy blogger to put a link on her site, and she does so for a percentage of each click-through (or purchase) to my baby product site, then I am a merchant and the mommy blogger is an affiliate marketer.
How are Affiliate Marketers Successful?
- You must have a ton of traffic to your website from your target customer.
- Associate only with good affiliate marketing programs that offer helpful information or quality products/services to your target audience.
- Look for affiliate programs with a reputation for paying high commissions on time and providing excellent customer service to the end buyers, not just their affiliates.
- Only promote products or services that you would actually buy. Linking to an affiliate marketing scam will eventually damage your online brand.
- Do you homework to make sure you are providing legitimate value to your loyal web visitors.
Keeping Your Affiliate Program Legally Compliant.
In 2007, several government entities published rules to regulate the activities of affiliate marketers. The Affiliate Marketing Regulations, issued by the Federal Trade Commission (FTC) and the Federal banking agencies, generally require a company to provide a notice to consumers and an opportunity to opt out before an affiliated company can use certain information for marketing purposes. The affiliate marketing notice is in addition to the privacy notices already mandated, and would be a second required notice and opt out opportunity.
What Must I Do to Comply?
Get permission from the customer in advance.
Ask the customer if you can share their information with your affiliates BEFORE you share any information.
Use an opt-out feature.
Most email marketing programs offer an opt-out feature. You have to give your customers the opportunity to decide they don’t want their information shared with your partners.
What Should My Opt-Out Include?
It’s best to keep it simple. Try something like–
“Click here to opt out” or “Enter ‘Stop Emails’ in the Subject Line and hit ‘Send’”
Avoid these not so simple options–
“Print out this notice, fill it out and send by mail within 14 days” or “Enter your username, password and click here, there and everywhere to get to the opt-out page.”
There’s truly nothing more frustrating for a customer (and potentially illegal for you) than a complex opt-out process. Make it simple, and your customers will appreciate it and may even return later.
What Content Should Include an Opt-Out?
Remember, opt-out policies are not just for e-newsletters. Coupon offers, daily deals, infrequent updates, and anything else communicated to the consumer via an affiliate (or the merchant, of course), should include an opportunity for the consumer to opt-out in advance.
The government is not interested in completely raining on your affiliate marketing parade. There are a few things you can do without using an opt-out.
No Opt-Out Necessary When…
You had a pre-existing relationship with the customer
The customer initiated the communication or the Customer requested the solicitation
Include a Renewal
Give the customer an opportunity to renew their opt-out preferences at least every five years.
Do the consumers need to know that I’m an affiliate marketer?
Absolutely! Anytime you receive compensation (money, products or other freebies) of any type for providing access to a product via links on your site, product reviews or any other method of product promotion, then you need to tell your site visitors that you are being compensated for doing so.
Of course, you can also remind them that your reviews and opinions are based on your personal experience with the product (if that’s the case, and it should be…), but nevertheless, you must let them know so they can decide whether to go forward.
Three Steps to Legalize Your Affiliate Program
Strive for transparency. I imagine that’s a good rule in business, but definitely when it comes to sharing your customer’s information. Disclose all relationships and let you customers know and make the decision for themselves.
Err on the side of being overly generous with your opt-out policies. Don’t force yourself on your potential customers. Instead, give them a measure of choice in the relationship.
Keep it simple. Any opt-out procedure should not require a great deal of time or energy on the part of your customers. Make it easy to no longer hear from you. Keep it clear and to the point.
If you have a great product or service, then your customer base will grow over time, and you don’t have to engage in any sketchy tactics to get their business or email address.
Disclaimer: Any and all information contained in this post is shared for information purposes only. There is no attorney client relationship created between the author, reader, and any third party by the creation and sharing of this content. For more information on the federal regulations on affiliate marketers contact The FTC Bureau of Consumer Protection, Division of Privacy and Identity Protection, can be reached at (202) 326â€2252.
Shannon Harmon is a writer and communications consultant with Jones Harmon Communications, Inc. She helps companies around the globe create effective written content for business growth. As a licensed attorney she also publishes valuable legal information for web-based entrepreneurs via ibusinesslegal.com. If you have questions about your writing strategy or communications needs, she always welcomes emails at shannon (at) jonesharmonwriting (dot) com and will provide a thoughtful response to your inquiry.