One day you’re browsing in a store when another customer tells you about a product they bought and loved. They rave about its usefulness and quality. Based on their enthusiasm, you decide to try the product yourself. Suppose that after your purchase, you learn that the person who recommended the product works for the company that makes it. Would you feel tricked, wishing you’d known that the reviewer was on the maker’s payroll?

The FTC’s disclosure policies are based on the reality that product recommendations mean more when they come from a neutral third party, instead of someone with a financial interest in the product. Whenever you receive some kind of benefit or compensation from another business that could affect your judgment, the FTC requires that you disclose it to your reader or customer. By being transparent about affiliate relationships, you’re providing information necessary for consumers to make informed decisions.

Making the proper disclosures is more than just slapping on a jargon-filled template in an obscure place on your website. Don’t make any of these common mistakes when creating affiliate disclosures for your business.

Mistake #1:  Incorrectly Thinking You’re Exempt

One of the most frequently used affiliate programs is Amazon Associates. In formal affiliate programs like this, you are compensated by the affiliate for certain purchases made by customers who come from your website or social media account. Affiliate disclosures are clearly required if you participate in this type of program (and often, the terms of the program itself require disclosure so make sure to read them thoroughly).

Affiliate disclosures apply in a variety of situations, however, not just in cases where there’s a formal relationship between affiliate and business owner. Suppose a publisher sends you books or magazines to review. You must disclose this, because you received something of value – the cost of the published material – in return for your review. Maybe a particular manufacturer sends you materials or ingredients to try out. Again, this triggers the duty to disclose that you received these materials for free.

Make sure to consider less obvious forms of compensation or benefits that you receive from an affiliate company. If you travel to attend a product launch and the company gives you a free hotel room, that triggers your duty to disclose that the company paid for your trip. If company employees take you out to dinner whenever they’re in town, you need to disclose this on-going relationship. There’s no set dollar amount that triggers the duty to disclose. Instead, think about what the average or typical customer or visitor would want to know about your relationship with any sponsoring companies or affiliates.

Mistake #2:  Using jargon or legalese in your disclosures.

Affiliate disclosures should be clear and easily understood by your visitors. Simple, direct statements are best. Remember that some of your customers may not be familiar with technical terms. Compare these two examples; which is easier to understand?

Example A:  This website has adopted affiliate links which may result in compensation, monetary or in kind, should visitors use the aforementioned links to generate sales at participating brands or retailers.

Example B: When I link to certain products or websites, these links may be affiliate links. That means if you click on them and make a purchase within a certain time period, I may earn a small commission.

Some businesses go beyond, giving specific examples of how affiliate links work:

Example C:  When I link to certain products or websites, these links may be affiliate links. That means if you click on them and make a purchase within a period of time, I may earn a small commission. For example, suppose I review a new fabric line and include a link to a retailer selling that fabric line. If you click on that link and buy something within 7 days, I may earn a commission, usually from 2% to 10%, from your purchase.

There’s no reason to be shy about explaining your affiliations or the way that you may benefit by referring consumers to your affiliates. Most consumers are aware that these programs exist and may trust you more for being honest.

Mistake #3:  Not making the disclosures prominent enough.

Remember when magazines contained ads for products like new cars? Way down at the bottom of the page, in teeny tiny type, you’d find a bunch of disclosures, such as the interest rate for the car loan or minimum down payment. Those days of hard-to-read disclosures are no more – at least not when it comes to affiliate links.

The FTC requires that affiliate disclosures be clear and conspicuous – in other words, easy for visitors to read. Don’t use small type or fonts that are difficult to read. You can use boldface, larger type sizes, different colors or other graphics tools (like outlining the disclosure in a red box) to make sure the disclosure is prominent. Avoid using flashy effects or buttons or other gizmos that may distract the reader. And don’t forget to include a title that clearly shows that this is a disclosure.

Example D:

When I link to certain products or websites, these links may be affiliate links. That means if you click on them and make a purchase within a period of time, I may earn a small commission.

Example E: 

Important: Affiliate Disclosures

When I link to certain products or websites, these links may be affiliate links. That means if you click on them and make a purchase within 30 days, I may earn a small commission.

Example E is prominent and easy to read, compared with the tiny, hard-to-read gray font in Example D.

Mistake #4:  Posting the disclosure in a hard-to-find place.

Location, location, location: it’s not just the rule in real estate. Where you place your disclosures is just as important as what you say as far as the FTC is concerned. The first rule for location is simple: you’ve got to post the disclosures in a place where they will be seen.

Think about how your landing page looks to the typical consumer. The customer should see the affiliate disclosures right away. Don’t hide your disclosures in the About or Contact page or require the user to scroll past paragraphs and paragraphs of text to find it. Some websites use a sidebar that automatically shows the disclosures on every page. You can also use a plug-in for this; there are several designed especially for affiliate disclosures.

The FTC is equally concerned with proximity. Your affiliate disclosures should be close to any affiliate links, not on separate pages. While it may seem obvious to some that disclosures apply to links no matter where they’re located, the guiding principle here is avoiding consumer confusion. By keeping the disclosures close to the links or other material that trigger them, you eliminate the chance that the visitor will misunderstand the subject of your disclosures.

And while you’re thinking about proximity, remember to put your disclosures before the affiliate links. Remember the first example given in the opening paragraph? Consumers want to understand any compensation arrangement before they make a purchase.  Obviously, then, disclosures should be located before the actual links to ensure that the consumer is forewarned.

Mistake #5:  Forgetting to include disclosures across all your media channels.

If you have a website or blog, it’s easier to remember that you need to include disclosures: every time you insert a link is a reminder that disclosures must be made. But the FTC’s rules regarding affiliates and sponsorship also apply to other methods of communication, including social media.

Remember to make appropriate disclosures for the following:

• Any videos that you post on YouTube, TikTok or other video hosting sites. You need to put the disclosure in the video itself; putting language in the description or notes below the screen is not enough since not all viewers read the text.
• Newsletters that include affiliate links (for instance, if your new book came out and you link to online affiliates selling it). Note that not all programs allow for newsletter links (Amazon doesn’t, for example), so check the terms of your affiliate program.
• Posts to Instagram, Facebook, and other social media channels where you endorse products or services, feature sponsored products, or review products you’ve received for free.

When crafting disclosures for social media, think about the FTC’s four “Ps” – prominence (the disclosure should be conspicuous and big enough to read), presentation (make it clear and easily understood), placement (put it where a customer would expect to find it, rather than buried at the bottom or requiring a click on “more”) and proximity (it should be close to the material triggering disclosure).

Be particularly careful when relying on hashtags. While starting a post with “#ad” may be enough in some circumstances, many hashtags are too ambiguous to satisfy the FTC’s disclosure rules. For example, while #freetickets suggests you didn’t buy the tickets yourself, it doesn’t make clear that the sponsor paid for them, as opposed to a gift from a friend. Likewise, #endorsement could mean your personal opinion as opposed to an arrangement whereby you receive something of value in exchange for an endorsement.

For more information and examples, check out the FTC’s website, including the Q&A located at https://www.ftc.gov/business-guidance/resources/ftcs-endorsement-guides-what-people-are-asking#affiliateornetwork