My name is Justin Magaña. And I want you to know that Stansbury Weaver is the most revolutionary legal solution for startups and tech companies since Alexander Hamilton! (Big tech guy, Hamilton.)

Okay. So I may be a little biased. Stansbury Weaver did pay me to say that.

Does that make it untrue? No.

But would knowing I was paid to say it change your view of my authenticity? Probably.

That’s why the Federal Trade Commission (FTC) has rules requiring individuals and businesses profiting from affiliate marketing to disclose their relationship with the product or company they are endorsing. Specifically, an affiliate endorser must disclose any benefit—like cash, free gear, or travel—received in exchange for hyping a product.

When there is a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, the connection must be fully disclosed. That’s particularly true when the connection would not be immediately obvious to the average consumer. The more natural an endorsement appears the more important it is to disclose that it’s not spontaneous, gratuitous hype, but a paid, strategic use of the endorser’s reputation.

In the case of affiliate marketing, that connection usually looks something like this: a company gives a celebrity money—or free stuff, discounts, access, or other benefits—for promoting the company’s product in hopes of developing positive associations for consumers or a vote of confidence that the product works, is a great value, or is just cool to have. In that scenario, the FTC requires that the celebrity disclose the nature of that relationship with the company and state explicitly that the celeb is receiving payment for the hype. The disclosure should be on the same page, screen, audio/video clip, and be given in the same modality as the endorsement.

It’s important how the disclosure is made. The FTC provides guidance. But there is still a lot of ambiguity in how exactly to properly disclose compensation. That said, there are a few basic principles to follow. The disclosure must be as close as possible to the claim that triggers disclosure. The disclosure must be clear and conspicuous, meaning it’s made in plain and unambiguous language and stands out. Consumers should easily notice the disclosure. They shouldn’t have to search for it.

As a simple checklist, disclosures should be:

– close to the endorsement or claim to which they relate
– in a font size and style that catches attention and is easy to read
– in a color or shade that contrasts with the background
– presented in a consistent way regardless of how or where a user would view the disclosure (i.e. on a smartphone versus laptop)

Within those parameters, a disclosure can be presented creatively. It doesn’t have to read like a notice from the IRS.

Some companies put disclosures at the top of any page where an affiliate endorsement appears. Some prefer a pop-up when you land on the web page or scroll over the endorsement. Some devote an entire page to disclosures and link to it. Any of these options is viable as long as the presentation otherwise satisfies the FTC’s requirements and isn’t designed to hide or obscure the disclosure and mislead consumers.
Website Audit Package

As we get closer to California’s new privacy law going live, it’s worth taking a look at your existing terms of service, privacy policy, and even affiliate disclosures. Our Website Audit package makes this super easy. It includes a comprehensive review of your existing website terms—including privacy policy and affiliate disclosures, if you need them—and updates or replacements of all as needed to ensure compliance.

If you’d like to learn more, reach out to mark@stansburyweaver.com.