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FTC is Cracking Down on Affiliate marketing

Discussion in 'BlackHat Lounge' started by ProfitNow, Nov 30, 2009.

  1. ProfitNow

    ProfitNow Regular Member

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    The REAL Death Of Affiliate Marketing (And Just In Time For Christmas!)

    By now I?m sure you?ve heard the FTC is dropping the hammer starting Dec 1st 2009 regarding product endorsements and the use of testimonials in marketing? (And if you?re one of those marketers living outside the USA everything still applies to you if you plan on selling inside the country? even online)

    So while you may know changes are coming, what you may NOT know is how far these new changes will reach.

    Here, if you?re in a hurry I?ll bottom line it for you:

    On December 1st 2009 ALL Marketing As You Know It Will Change Completely?

    As I?m a fairly successful online business owner what first got my attention was the forum chatter about the new laws regarding use of testimonials and kickbacks (affiliates/disclosure of material connections)

    Most of the Big-Kids in my market thought the changes would effect those ?I Made 9 Million Dollars In 15 Seconds!? sort of testimonials and also require anyone promoting a product to disclose if they were getting a cut.

    And yes, that?s totally true?

    Under the new laws you can no longer show best results unless you also show average results. You also need to disclose if you?re making a buck off recommending the product to people?

    No big deal, right?

    I mean, changes like that can only help people by removing moronic/obvious fake business opportunities and weight loss programs? Sweet!

    But that?s not where the laws stop? that?s not even close to where they start!

    In fact, the changes are so sweeping it would take me at least 10 pages just to scratch the surface of testimonial usage.

    This is simply much, MUCH bigger than anyone was lead to believe?

    Just How Big Are These New Laws? Here?s An Example:

    ClickBank (A Billion Dollar Company) has what?s called an ?Open Affiliate Program?.

    This means anybody with a computer, some free time and a dream can get a link, promote a product and get paid every time somebody clicks and buys?

    Super cool, right?

    Hey, that single technique has been responsible for improving the financial lives of TONS of people (including myself)

    Under the new FTC laws? those days are GONE.

    Under the new laws (and this is just my interpretation of legal jargon) you can no longer make any claims about a product you?re endorsing unless you?re personally using it and can SCIENTIFICALLY verify the results you?re claiming.

    In fact, this is so far reaching it would appear if you are the product OWNER and one of your affiliates makes claims using promotional materials they got directly from YOU containing result claims they can?t personally verify? BOTH of you are liable.

    Bottom Line: You own a product. One of your affiliates promotes it somewhere and simply restates claims you make on your own sales letter? if they can?t back those claims up personally with verifiable data? you?re both hosed.

    Example #2: You own a product and your affiliate makes claims you DO NOT support on your sales letter?

    Guess what? Yup! You?re both toast! (Even if you have no knowledge of what this affiliate is doing)

    Under the new laws it is the publishers responsibility to police any/all affilaites.

    Good by ClickBank open affiliate program marketing! Will they have to close? I doubt it, but they will have to make some very big changes to how they allow people to promote as affiliates.

    Holy Crap! What About Joint Ventures And Big Mailings?

    For me this would appear to be a MEGA concern as it?s the cornerstone on which my entire business is based?

    On the surface it would seem getting people to hit ?Send? for your product is something that is laid to rest alongside ?flogs?

    However, what I?m seeing/reading this isn?t actually the case.

    (Keep in mind, this is my non-lawyer interpretation of VERY vague legal jargon) It would appear so long as the Joint Venture partner makes ZERO results claims inside the promotional email and fully discloses the link inside clicking is an affiliate link? then you both should be fine.

    Holy Crap We?re Screwed! We?re Screwed! We?re Screwed!!!

    I?m sure by now if you?re making money online and/or even thinking about choosing this sort of business you?re about 15 seconds from physically lighting your computer on fire? And I get it, but hold up a second because all is not lost.

    After spending HOURS reviewing this stuff what seems to be the bottom line for us kids in the online marketing space is this:

    So long as your marketing is 100% transparent with zero results based testimonials, along with FULL affiliate compensation disclosures? and you truly have your customers best interest in mind you SHOULD be fine.

    The issue (as I see it) is that the FTC has left A LOT to interpretation.

    All Truly Is NOT Lost?

    Obviously (as I said before) I?m not a lawyer, I just get advice from guys who play them on tv? I?m going to share with you where I?m leaning with my own business and hopefully you can get some ideas.

    Jonny?s Potential Don?t Get Sued By The FTC Ninja Move ?A?: From everything I?m reading it would appear the only sane move is to totally change how you might be marketing ClickBank products (including niche markets)

    But their open affiliate program may just be too much of a potential legal minefield to continue using them as so many online publishers have.

    Jonny?s Potential Don?t Get Sued By The FTC Ninja Move ?B?: Not that I have in the past, but in the future I?m not going to use ANY results based testimonials. If I use any at all they will be what they are now ?I like your stuff and you?re a really good teacher.?

    According to reps from the FTC itself testimonials like that should be totally fine because they?re not ?results based?.

    Yes. There Is Hope. These New Laws Can Actually Make You MORE MONEY!

    Just a few weeks ago I did an internal marketing test based almost entirely on the new FTC laws? this particular test made me a very large sum of money in a very short period of time. (Won?t disclose exactly how much, but let?s just agree it was more than $2.97 in under 365 days, you should personally never expect to make a dime and will potentially get facial mites just for having read this blog post.)

    The entire process took very little time to build, only a few hours to implement? and was done WITHOUT any testimonials, WITHOUT any 3rd party income claims (or results claims of any kind at all) and WITHOUT any sort of standard marketing techniques period.

    The entire sales process was 100% transparent from start to finish.

    Despite the apparent lack of standard sales tactics, this particular marketing process converted BETTER than almost anything I have done before and was basically a full disclosure/breakdown of how I was selling them into the program in the first place.

    Thus far my internal FTC compliance test has resulted in my highest grossing month of 2009 hands down.

    So what if, just what if you were able to make oodles of loot as an affiliate without ever making an income claim, fully disclosing you were getting a cut AND using social media to market your links in complete compliance with every FTC guideline written no matter how vague?

    Oh no, I?m not ?claiming? anything? I?m just asking ?What If?? ;)

    All I?m saying is the game has changed for everybody? BIG TIME. I?m guessing these changes will spell the end for 80% of the online marketers out there who rely exclusively on fake stories, false income claims and hype to sell their products. In reality this is fantastic. It leaves the market wide open for people like us who prefer to sell our stuff in an open, honest way.

    Because as my ?little? test just proved: you should NEVER lie? because the truth sells WAY more copies.
     
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  2. Afflicted

    Afflicted Regular Member

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    Source = ?
     
  3. backtobasics

    backtobasics Jr. VIP Jr. VIP

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    ProfitNow,

    Nice post! Yes, there is always another way to skin the cat. I think initially the changes will cause struggle for those seeking to comply. Ultimately, it will make people better marketers.

    For everyone: For informational purposes, here are a few links I have collected concerning the FTC guidelines. If you have questions, seek out an attorney who has experience in Internet law:

    Fromt the FTC themselves:
    Code:
    http://ftc.gov/multimedia/video/business/endorsement-guides.shtm
    Performance Marketing Alliance (PMA) analysis of the guidelines:
    Code:
    http://www.performancemarketingalliance.com/2009/10/13/ftc-advertising-guidelines-analysis/
    ReveNews.com's analysis:
    Code:
    http://www.revenews.com/andrewbaer/ftc-regulates-blogger-viral-marketing-relationships/
     
  4. lucius

    lucius Power Member

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    damn man,
     
  5. MrSmith

    MrSmith Newbie

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    Here's how you do it...
    1. Make a PH company & hire the necessary people
    2. Use that company to represent all your internet activities
    3. Keep writing your flogs, false claims and Oprah-endorsed my eBook
    4. When FTC comes to sue you, you shut down the company.
    5. Repeat.

    End of story.
     
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  6. vegasvillan

    vegasvillan Regular Member

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    I am going to put "Endorsed by the FTC" on all my sites now

    [​IMG]
     
  7. CSalt2

    CSalt2 Jr. VIP Jr. VIP Premium Member

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    Stupid guidelines make no sense, wtf do they want from us to put a statement under each testimony 'this didn't actually happen and nobody makes any money from this'

    i mean seriously they provide no examples and dont even know exactly what they're asking us to do here. Its just so vague this is definitely going to bring about some heated battles

    the stupid ftc lady just says 'IZ SIMPLE GUISE I KNOWS THE INTERNETZ U GOT 2 PUT THAT ABC COMPANY PAID U TO TRY STUFF AND STUFF IZ SIMPLE I SWEARZ' Ive been mauling these guidelines for days and i still dont get WTF they really want

    itd be nice if theyd provide a example seeing as their the immaculate all powerful omnipresent american goverment but no theyre just going to leave it up to us to guess so they fine ppl
     
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    Last edited: Nov 30, 2009
  8. csgcsg2

    csgcsg2 BANNED BANNED

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    about time, if you are serious about affiliate marketing, you need not lie and claim about the products/services
     
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  9. oxonbeef

    oxonbeef BANNED BANNED

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    And how will they enforce that for non US IMers, block their sites from
    all US isps?
    I never make wild claims anyway I just imply and let the readers imagination do the rest.
     
  10. rocsk79

    rocsk79 BANNED BANNED

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    Im glad this happened. seriously.

    sales pages need to cut out the bullshit. Im so sick of seeing a screenshot with $xx,xxx earned today. Like only a few people know how to use photoshop or at the very least "lets use the highest earner in the game" as a "common example"


    its not hard to believe laws would be created to stop this. I dont even use clickbank but when I saw some of the products they endorse and HOW they endorse them I thought to myself what a bunch of crap.
     
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  11. Crooker

    Crooker Newbie

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    Just scare tactics.
    How are you going to regulate thousands of websites.
    It's impossible.

    I foresee that every now and than they are just gonna pick out a pour soul and fine him a million $ just to set an example.
    Same with the can spam act.
     
  12. Afflicted

    Afflicted Regular Member

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    x2.
    If they actually enforce those ridiculous rules, they would be attempting to pull 1000's of marketers into USA from other countries.

    "You have been photochoping screen shots to generate affiliate commissions. YOU ARE A CRIMINAL. JAIL TIME."

    "What are you in jail for?"
    "Murder, you?"
    "Photochopping screenshots so I could try to sell an e-book"
     
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  13. homenet

    homenet Power Member

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    Nothing but scare tactics, I will only believe this when I see the FTC actually shut down a page for false advertising / not complying with their rules.
     
  14. reciestmonkey

    reciestmonkey BANNED BANNED

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    Wait a tick, I would venture to say than atleast 80% of BHW members use "blackhat" methods in their marketing.

    Blackhat = against the rules or even possibly illegal


    So heres my question pertaining to this new law: SO F@#*ing What?!?!?

    We are all breaking the damn rules already ANYWAY!!!

    Why the hell should this be any different?
     
  15. magpie2419

    magpie2419 Regular Member

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    Fortunately the world of IM is not solely USA based, I am well outside the reach of the USA and Europe, so I can really do whatever I like IM wise, and they can go kiss my little white ass. There is no way any western ageancy could touch me.
     
  16. tehonic

    tehonic Newbie

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    Because the actual websites aren't normally whats breaking the rules. A lot of blackhat is for seo or risking to get banned by Affiliate companies not getting sued by the ftc. So this does affect a lot of people even if we are blackhatters.
     
  17. mahan_eesh

    mahan_eesh Regular Member

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    wtf FTC has problem. On sales pages cant they see money back guarantees and also if customer's didnt liked they can refund right in CB.
     
  18. yao1994

    yao1994 Regular Member

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    Finally...

    There has been too much shit going on in IM and this will filter out the crap.

    The FTC isn't going to bust everyone's ass. They'll just go for the big players (advertisers, networks, super affiliates) to make an example. Then everyone will shit their pants and then we'll start seeing some changes.

    But the "average results" rule is BS. Even the legitimate products isn't used by every customer to the fullest extent. If I sold a legit eBook the average result will still be the same as a BS eBook. All products are bought because of the results/potential results.

    A legit product will help you to achieve results but whether the customer achieves what they want totally depends on them. Most customers don't do shit with what they bought. But for the ones that do, they get what was promised. The whole fitness industry would collapse if they enforce this. "You will get fit by training at our gym! *Average result is the person becomes fatter because most people think buying a gym membership, using 1kg weights for 30 minutes every week then buying a big mac meal after they workout because they feel tired automatically makes them ripped like Arnold Schwarzenegger"
     
    Last edited: Nov 30, 2009
  19. MrSmith

    MrSmith Newbie

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    Read my guidelines for further instructions how to protect your bumhole so the FTC can't 'insert' a fine
     
  20. virus_1720

    virus_1720 Jr. VIP Jr. VIP Premium Member

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    this is a jungle and only some will survive.

    FTC guidelines are going to ruin business, This is survival of the fittest