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.

1. FTC Compliance: What You Need to Know

2. About the Speaker
Mason Smith
Sales Manager
BrandVerity
Twitter: @brandverity
Web: www.brandverity.com

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. 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. 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. Insufficient Disclosure by FTC Standards

7. How Disclosures Should Look

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. 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. #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. 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. 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. How Disclosures Should Look

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