Once you’re ready to start making money on your blog through affiliate links or sponsored posts, you need to make sure you have a disclosure letting your audience know about that relationship. It’s good business practice to be transparent with your audience about when you’re getting paid to promote something, but it’s also legally required by the Federal Trade Commission (FTC).
When you’ve been compensated, in any way, by a company, brand, etc. you must disclose this to your audience to comply with the rules of the FTC.
Many people use the words ‘disclosure’ and ‘disclaimer’ interchangeably here, so it’s important to note this article is about the disclosures required by law when working with brands or otherwise being paid for something and not a website disclaimer which serves to limit your liability to website visitors for their use of your content.
What is the FTC?
The Federal Trade Commission (FTC) is the government agency that serves to protect consumers. I think we would all agree that companies shouldn’t be able to make untrue claims about their products or be deceptive about what their product is, what it can do, or what results you can expect. As consumers, we can appreciate that there is a government agency looking out for us and protecting us from unfair business practices.
In addition to regulating what companies can and cannot say about their products or services, the FTC also requires disclosing when something promoting a product or brand is an advertisement.
Before the days of the internet, this was pretty straight forward. When you’re watching TV or listening to the radio, it’s fairly easy to tell when something is an ad and we all know that the company paid to have their product or brand advertised. Now, with the advent of the internet and social media influencers, it’s less clear when someone is talking about a product because they love it or because they’ve been paid to do so.
What is compensation?
Obviously, if a company pays you money to talk about their brand on your site, this is compensation. But, compensation also includes things like receiving a free product to review, receiving affiliate commissions from purchases, and even discounts or free products. If you get any benefit at all, this is considered compensation.
Why do you need an FTC disclosure?
The most basic reason you need to disclose is because it’s legally required by the FTC. But, even besides that, disclosing relationships you have with products or brands you promote helps build trust with your audience.
Think about it. If your favorite blogger recommends a curling wand, wouldn’t you like to know if she’d been paid in some way to say that? I know I would. I trust personal recommendations, but if I know the person has been paid to recommend a product, I’m a little more skeptical.
Who needs to disclose?
Basically, anyone who has a relationship to a brand and is being compensated for that relationship in some way has to disclose.
It doesn’t matter if you’re making $1 or $1,000, you still have to disclose. It doesn’t even matter if you make $0 from the relationship, if you have the potential to be compensated, you need to disclose.
It doesn’t matter if you have 10 followers or 10 million followers, you have to disclose when you’re being compensated.
This applies even if you’re sharing an affiliate link on your personal social media profiles. And, it doesn’t matter if this is a regular practice for you or if it’s just a one time thing. When in doubt, always disclose.
Now, if you are just talking about a product or brand because you love it, but you aren’t being compensated, then there’s nothing to disclose. The definition of compensation is broad, but if you aren’t receiving anything for promoting the brand, then you don’t have anything to worry about.
What do you need to disclose?
You need to disclose that you have a relationship with the company or brand and that you are being compensated in some way for promoting them. It’s also a good idea to say how you are being compensated.
If you got a free product to review, say that.
If you’re paid a commission when someone clicks a link and makes a purchase, say that.
If a company paid you a flat fee to promote their product or service, say that.
If you work for the company, or have some kind of ownership interest in the company, say that.
When do you need to disclose?
Any time you are being compensated by a company or brand, you need to disclose. It doesn’t matter where this promotion is happening. If you are being compensated, you need to disclose.
How should you disclose?
The FTC requires your disclosure to be “clear and conspicuous”. This is a common legal term and it basically means it has to be easy to understand and easily visible by a “reasonable person”. {“Reasonable person” is another common legal standard meaning the person shouldn’t have to be an expert or know anything about online advertising to understand the relationship.}
Don’t be vague and don’t try hide your disclosure from your audience. That doesn’t meet the FTC requirements, but it’s also shady business practice. If you’re not comfortable disclosing the relationship, maybe you should rethink the relationship altogether.
There are no specific rules for language to be used, font size, etc. It just to has be easy for a consumer to find and understand that there is a relationship between you and the company or brand you are promoting.
When you are making a statement promoting a product or service, the FTC calls this the “triggering claim”. That is just the statement that gives rise to your need to disclose.
A disclosure needs to happen as close as possible to the triggering claim. It’s not enough to have a disclosure page on your website and direct people to that. You have to include a clear disclosure when you are making a triggering claim.
The FTC requires you to disclose the relationship before you promote the company. So, if you have a sponsored post, that needs to be at the very beginning before you go into promoting the company. If you are including an affiliate link, you need to put your disclosure close to the link.
What makes an adequate FTC disclosure?
As stated earlier, there aren’t hard and fast rules about what exactly is required. But, what is required is that it is obvious to your audience when you are being compensated in some way for promoting a product or service. Some things you can do to ensure your disclosure is adequate:
- Easily visible. No hiding it in tiny font or hard to read color.
- Close to where the “triggering claim” is made
- Easy to understand language
- Before a triggering claim is made, i.e. they shouldn’t have to scroll to the bottom of the post before they find out about the relationship
Some examples of FTC disclosure statements
There is no fancy legalese required. In fact, this would probably not be considered an adequate disclosure because the average person couldn’t understand it.
- Ad
- Sponsored post
- This post contains affiliate links
- Affiliate link
Working with brands can be an easy and lucrative way to monetize your platform. But, make sure you’re following the FTC rules to stay legal. If you want more information, check out the FTC’s Endorsement Guides.
Want to make sure your website is legally compliant? Check out this post to learn the legal pages you need on your website.
Disclaimer: This site, and all information contained herein or through communication with me, is intended as legal information only. I am an attorney, but I am not your attorney, so nothing on this site, nor any communication with me, shall create an attorney-client relationship. I am not liable for damages or losses based on any action taken, or inaction, based on the information contained on this site. All areas of the law are fact specific and there is no substitute for legal advice from an attorney licensed in your jurisdiction who is familiar with the specific facts and circumstances of your situation.