72: The Legal 101 of Affiliate and Biz Referral Marketing

Legal 101 of Affiliate and Biz Referral Marketing

Episode 72 on the Business Bites Podcast

The Gist Of This Episode: In this week’s episode, I’m sharing about the FTC rules of disclosing ANY time you’re making money off of a referral.  Includes legalities on Affiliate programs, Joint venture commission shares and Referral fee kick-backs.

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Hey guys, welcome to this episode of the Business Bites Podcast. I am your host, Rachel Brenke. This week we are gonna talk a little bit about affiliate disclosures, affiliate links, receiving of products, receiving of services and often times, this subject matter is fairly confined to the discussion of online influencers or blogs but I want you guys to expand your minds beyond those types and also, think about those of you that are out there who are selling to local products and services, who are doing businesses with other local business. Which, if you’re not networking with local businesses, you are a brick and mortar or a regional or specific location based business, you need to be doing it.

So this episode is extremely important for you to get in and get to know other businesses in your areas but to make sure that you are doing the proper legal things that you need to do. So fundamentally, the entire idea of this Podcast, of this episode and the whole idea of affiliate linked disclosures and I’m gonna say affiliate link but we can also sub in for whenever we receive products or services is that you need to disclose all this information to your audience or your customers, ‘kay? And all of this is regulated by the Federal Trade Commission and the whole point of it is so that it can protect consumers. The idea’s that we want consumers to receive recommendations from influencers or from you in the local area who may be doing business with the local spa and all of a sudden you’re recommending their one hour hot stone massage but they wanna protect the consumers so that the consumers know that you received some benefit for providing this recommendation or for putting an affiliate link in your blog post or you website or your social media post.

Before I get into that, let me kind of define what each of these are for you guys. Affiliate links are when you have a specific URL and it’s attached to a program. One of the most common ones out there is like, Amazon. Individuals can share links through this Amazon affiliate program and it’s a unique URL and essentially what it does is it gives commission to the individual that shared the link when you click on it and make a purchase, ‘kay? So the disclosure there would be that it’s an affiliate link. That the person sharing the link is gonna be receiving some benefit for it. In a non-web based situation where this could come into play is if maybe you’re getting paid to make recommendations or you’re gonna receive referral fees for the recommendations that you make to a local business. Maybe you’re like, a photographer and you’ve been working with a local hair salon or spa. You have to let the consumers know that you’re gonna be receiving a monetary or other type of benefit for your recommendation.

Like I said, this can happen online, offline, we just need to make sure that we are in line with all the proper things that we need you to do so that we don’t get in trouble. Now, as I walk through this I may say affiliate link and I might expand it out a little bit but so that I’m not redundant, you guys just know that all of what I’m gonna talk about applies to whether it’s online or it’s in person. You’re just gonna have to use your entrepreneurial brains and figure out what is the best way that it’s gonna apply to you. So for example, let’s say you have an online blog or social media presence and you are linking affiliate links. Again, that’s the custom URL that you’re gonna receive the benefit from if somebody purchases through you. Doesn’t necessarily even have to be monetary benefits, and I think that’s what’s key in this entire discussion here.

We have affiliate links, the unique ULR that we just talked about and that’s typically commission based or maybe when you’re recommending a local business or somebody else you may receive a kickback. Another way is that you may be receiving products and then you’re promoting it. Well, any time you receive a product or a service you also need to disclose it, as well. The number one thing that you guys need to take away from this episode is that you need to disclose any of this. For affiliate links it’s relatively easy. You need to place the disclosures in an obvious place. Now this is putting it as close to the affiliate link as possible, so for example, let’s say you do a social media update and it’s fairly confined to that one specific link, that one product that you’re maybe wanting to promote on Amazon. You need to either identify it through putting words like, “affiliate link” or “sponsor” or “paid content” or something to that effect depending on whatever the benefit you’re gonna receive from that link may be. You need to put that into your update.

Now what if you’re gonna put it onto a blog post but you have a ton of affiliate links? This happens really common when it comes around Black Friday. You know, it probably is best practice, best, best practice is not always the only practice though. Best practice would be to identify each of the links within a list or a blog in order to make sure they all say “affiliate” but you can also place a disclosure in an obvious spot at the very top of the post. The most important thing, you have to look at this. Let’s go back to what the whole point in these disclosures are. It is to let the consuming public, the consumers that are either buying through your link or buying from you or buying into whoever you recommend is so that they know that they’re being… that you’re gonna receive a benefit, right? You’re the referring party, you’re gonna receive a benefit.

Well we can’t do that by hiding disclosures or by burying them down into a blog post. Now, this is where I’m gonna call out a couple of people, not by name, but I see many influencers out there who are on Instagram Stories or selling about a product and they have a custom affiliate code or they have a swipe up link and I know that it’s an affiliate link ’cause I go and look at it if they don’t place the disclosures. It’s incumbent upon you to figure out a way to put a disclosure. On an Instagram Story, use little text and say that, “This is an affiliate link.” Same thing for when it’s a social media post or website. Always need to disclose your affiliate link. Same thing. If you’re making a recommendation, you’re gonna get a kickback from a local business. You need to disclose that and the method that is best for both of these, affiliate links or pretty simple referrals, is to provide the disclosure in the same way that the recommendation was made.

What does that mean? Alright, well it’s relatively easy. When I have an affiliate link it’s probably delivered in text, because that’s a link, right? So you would put your disclosure in text. Now what can be a little bit more difficult and more abstract when you are recommending to people in person, you wanna put your disclosure in the exact same format you delivered it to them. So, you know, you don’t necessarily need to verbally tell them, “Hey, go talk to Sally Spa, blah blah blah” and then hold up a sign with a written disclosure. You can still verbally, and should verbally, disclose that you’re gonna receive a benefit out of that. So the first best practice for any of this disclosure stuff is to place the disclosure in an obvious area and then two is to always make sure that it is in the same format to what it was delivered.

Now, I think it’s really important you guys are really proactive in disclosing. You need to disclose when you’ve been paid, you need to disclose on each page the link is used and when you’re unsure, disclose about it anyway. Now here I think this is where we have a lot of misinformation. Oftentimes influencers or just people in general get so wrapped around the axle thinking, “Oh my god, you know, I gotta disclose. I’m so worried about it. Ahhh.” It’s not that difficult. It doesn’t have to be like this stone tablets with pigeons blood, right? You can simply say, “Hey, I received a product in exchange for this. I still only put things on my blog that I 100% believe in. Here’s my review.”

I didn’t have to be all crazy and go, “The FTC requires that I disclose and so I received this and it’s gonna impact my review.” No. You just have to be clear and obvious about your disclosure and put it in the format of what the disclosure, I’m sorry, that the recommendation was also provided and that’s easy. Super easy, guys. You don’t have to be all crazy about it. Just make sure that it’s clear language. You can have a professional drafted up, lawyer drafted disclosure or it can be a bit more colloquial like the suggestion that I gave you guys.

Be direct, make sure that people understand what you’re talking about, aff-link, I think if you are in a field where aff-link, A-F-F, space, link is commonly understood, you could get away with that but if you’re maybe blogging for, let’s say, mommy bloggers and they’re not business owners, they’re not B-to-B, they’re not online entrepreneurs, they’re not gonna understand what aff-link means. A-F-F link. They might not even understand what affiliate link means so you have to consider avoiding any type of niche specific language and think about who it is that you’re talking to. Be direct and be clear and remember who it is that you’re talking to on your disclosures that you’re making.

Now again, affiliate links are one of the easiest ways to do it just keep in mind that any time you’re gonna receive any benefit, it doesn’t have to be money. Oftentimes as an athlete, I’m provided a lot of products, you know? People reach out and they’ll send me stuff all the time and I wanna talk about it. Well even if I’m not getting paid for talking about it, even if I have to return the product, it still is incumbent upon me when I post about it to say, “I received a demo of this product and this is what I think about it,” you know? I always let my audience know that I’m not going to violate their trust and violate my credibility by simply promoting any products at all that are sent to me for free but I’m doing the disclosure and I’m doing it in a way that they understand, “Hey, she got the product, here’s her review and here’s the end result from that.”

So just keep in mind for this, guys, top things to look for: affiliate links where you make commissions, referral fees from business to business, any time you’re receiving a product or service and you’re making a recommendation, disclosures need to be clear, concise, avoid any specific language that your audience may not understand and make sure, again, that they’re obvious. I think that is one of the biggest keys to this game, to making sure that you are not going to get nixed out the door.

Oftentimes they get pushback from other influences that I work with and they go, “Oh but I don’t want my audience to be polarized because I’m getting paid to promote this.” Guess what? They’re assuming you’re getting paid anyways. They’re assuming that you’re getting paid whether or not you put the disclosure on there or not so you may as well do what you have to do by law because you’re already gonna get attributed, this idea that you’re already getting paid for it. So stay in line and as an audience member where I follow a lot of influencers, I follow other businesses, it actually helps me to have better confidence in you guys when I see that you’re following the letter of the law. It shows that you respect your audience to be truthful and transparent with them, it shows that you’re being respectful and professional to the industry that you’re in and just to the laws in general.

Keep that in mind. You guys can check this out at RachelBranke.com/POD, is the actual Podcast if you guys have not checked out before. I also have a Facebook group you can get into it’s called the Business Bites, we have a lot of great content and things that we talk about there. Some Podcast related, some not Podcast related. This is episode 72, so the direct link for that is at RacheBranke.com/epi72. Go on, disclose, build credibility and do the right thing.

About the author

Rachel Brenke is a lawyer, author and business consultant. She is currently helping professionals all over the world initiate, strategize and implement strategic business and marketing plans through various mediums of consulting resources and legal direction.

Hi, I’m Rachel Brenke

Rachel Brenke

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