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FTC Compliance: What You Need to Know
About the Speaker
Mason Smith
Sales Manager
BrandVerity
Twitter: @brandverity
Web: www.brandverity.com
Overview
• What is the FTC and what do they
enforce?
• How does this affect affiliate marketing?
• What should you and you...
The Federal Trade Commission and the FTC Act
• The Federal Trade
Commission is responsible
for enforcing the FTC Act
• Sec...
Affiliate Marketing: Satisfying FTC Requirements
• Disclosing the financial relationship
• Clear and conspicuous
• Not at ...
Insufficient Disclosure by FTC Standards
How Disclosures Should Look
Important Cases Where the FTC Took Action
• Learn and Master (Legacy Learning
Sytems, et. al.) – 2011
• Cole Haan and the ...
Legacy Learning Systems, et. al.
• Learn and Master
affiliates drove at least $5
million in sales
• Affiliates posed as
in...
#Wanderingsole Pinterest Contest
• Cole Haan held a
Pinterest contest with a
$1,000 cash prize
• Participants were
encoura...
NPB Advertising, Inc., et al.
• Around April 26, 2012, Dr. Oz
proclaimed Green Coffee
Bean Extract a “magic” weight
loss s...
How Does my Program Become Compliant?
• Some merchants are at higher risk due to the nature of their
product
• If a “mater...
How Disclosures Should Look
Resources
• Rachel Hirsch – Ifrah Law – a lawyer
specializing in FTC litigation and a friend of
BrandVerity
• The Performa...
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FTC Disclosures: What You Need to Know

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This presentation is from Performance Marketing Summit 2014 in Denver, CO (June 17, 2014). Session description: This session will provide guidance for advertisers and publishers to meet FTC disclosure guidelines. The current guidelines will be reviewed and case studies will be provided for best practices.

Published in: Business, Technology
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Transcript of "FTC Disclosures: What You Need to Know"

  1. 1. FTC Compliance: What You Need to Know
  2. 2. About the Speaker Mason Smith Sales Manager BrandVerity Twitter: @brandverity Web: www.brandverity.com
  3. 3. Overview • What is the FTC and what do they enforce? • How does this affect affiliate marketing? • What should you and your affiliates be doing differently? • Case studies: where the FTC has taken action, and what could have been done differently
  4. 4. The Federal Trade Commission and the FTC Act • The Federal Trade Commission is responsible for enforcing the FTC Act • Section 5 of the FTC Act establishes authority over affiliate marketing practices • The FTC is establishing precedents to take action on abuses through new advertising mediums
  5. 5. Affiliate Marketing: Satisfying FTC Requirements • Disclosing the financial relationship • Clear and conspicuous • Not at footer or separate disclosure page • Next to active affiliate links • Where does accountability for proper disclosures fall? • All parties are accountable!
  6. 6. Insufficient Disclosure by FTC Standards
  7. 7. How Disclosures Should Look
  8. 8. Important Cases Where the FTC Took Action • Learn and Master (Legacy Learning Sytems, et. al.) – 2011 • Cole Haan and the “#WanderingSole” Pintrest contest – 2013 • Green Coffee Beans (NPB Advertising, Inc., et al.) – 2014
  9. 9. Legacy Learning Systems, et. al. • Learn and Master affiliates drove at least $5 million in sales • Affiliates posed as independent reviewers while providing “best of class” ratings when they were actually paid endorsers • FTC settled for a $250,000 fine, and strict monthly compliance reporting
  10. 10. #Wanderingsole Pinterest Contest • Cole Haan held a Pinterest contest with a $1,000 cash prize • Participants were encouraged to “pin” photos using #WanderingSole • FTC did not pursue action – looked to establish precedent
  11. 11. NPB Advertising, Inc., et al. • Around April 26, 2012, Dr. Oz proclaimed Green Coffee Bean Extract a “magic” weight loss supplement • Soon after, Pure Green Coffee incorporated as a business and began advertising through affiliates • The merchant and their affiliates drove traffic through banner ads and paid search ads • Product testimonials were misrepresented, and fake news sites were created Affiliate Page
  12. 12. How Does my Program Become Compliant? • Some merchants are at higher risk due to the nature of their product • If a “material connection” exists between the advertiser and the merchant, there needs to be a clear disclosure • Disclosures must be clear across desktop, mobile, and tablet devices • Affiliates, especially content affiliates, must disclose they are being compensated when giving positive reviews • Review your top affiliates sites once a month – randomly check in on non-top performing affiliate pages • Important - create an internal memo that lays out your compliance process • Document instances where advertising behavior was corrected – screen shots and dates found
  13. 13. How Disclosures Should Look
  14. 14. Resources • Rachel Hirsch – Ifrah Law – a lawyer specializing in FTC litigation and a friend of BrandVerity • The Performance Marketing Association – www.thepma.org • The FTC website – www.ftc.gov • Myself and BrandVerity – mason@brandverity.com
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