By Arunesh Mathur, Arvind Narayanan and Marshini Chetty
In a recent paper, we analyzed affiliate marketing on YouTube and Pinterest. We found that on both platforms, only about 10% of all content with affiliate links is disclosed to users as required by the FTCâ€™s endorsement guidelines.
One way to improve the situation is for affiliate marketing companies (and other â€œinfluencerâ€� agencies) to hold their registered content creators to the FTCâ€™s endorsement guidelines. To better understand affiliate marketing companiesâ€™ current practices, we examined the terms and conditions of eleven of the most common affiliate marketing companies in our dataset, and specifically noted whether they required content creators to disclose their affiliate content or whether they mentioned the FTCâ€™s guidelines upon registration.
|Affiliate program||Requires disclosure?|
The table above summarizes our findings. All the terms and conditions were accessed May 1, 2018 from the affiliate marketing companiesâ€™ websites. We did not hyperlink those terms and conditions that were not available publicly. All the companies that required disclosure also mentioned the FTCâ€™s endorsement guidelines.
Out of the top 10 programs in our corpus, only 3 explicitly instructed their creators to disclose their affiliate links to their users. In all three cases (Amazon, Ebay, and ShopStyle), the companies called out the FTCâ€™s endorsement guidelines. Of particular interest is Amazonâ€™s affiliate marketing terms and conditions (Amazon was the largest affiliate marketing program in our dataset).
Amazonâ€™s terms and conditions: When content creators sign up on Amazonâ€™s website, they are bound by the programs terms and agreements Section 5 titled: â€œIdentifying Yourself as an Associateâ€�.
As seen in Figure 1, the terms of Section 5 do not explicitly mention the FTCâ€™s endorsement guidelines but constrain participants to add only the following disclosure to their content: â€œAs an Amazon Associate I earn from qualifying purchasesâ€�. In fact, the terms go so far as to warn users that â€œExcept for this disclosure, you will not make any public communication with respect to this Agreement or your participation in the Associates Programâ€�.
However, if participants click on the â€œProgram Policiesâ€� link in the terms and conditions—which they are also bound to by virtue of agreeing to the terms and conditions—they are specifically asked to be responsible for the FTCâ€™s endorsement guidelines (Figure 2): â€œFor example, you will be solely responsible forâ€¦ all applicable laws (including the US FTC Guides Concerning the Use of Endorsement and Testimonials in Advertising)…â€�. Here, Amazon asks the content creators to comply with the FTCâ€™s guidelines, without exactly specifying how. It is important to note that the FTCâ€™s guidelines themselves do not enforce any specific disclosure statement constraints on content creators, but rather suggest that content creators use clear and explanatory disclosures that convey the advertising relationship behind affiliate marketing to users.
We learned about these clauses from the coverage of our paper on BBCâ€™s You and Yours podcast (~ 16 mins in). A YouTuber on the show pointed out that he was constrained by the Amazonâ€™s clause to not disclose anything about the affiliate program publicly.
Indeed, as we describe in the above sections, Amazonâ€™s terms and conditions seem contradictory to their Program Policies. On the one hand, Amazon binds its participants to the FTCâ€™s endorsement guidelines but on the other, Amazon severely constrains the disclosures content creators can make about their participation in the program.
Further, researchers are still figuring out which types of disclosures are effective from a user perspective. Content creators might want to adapt the form and content of disclosures based on the findings of such research and the affordances of the social platforms. For example, on YouTube, it might be best to call out the affiliate relationship in the video itself—when content creators urge participants to â€œcheck out the links in the description belowâ€�—rather than merely in the description. The rigid wording mandated by Amazon seemingly prevents such customization, and may not make the affiliate relationship adequately clear to users.
Affiliate marketing companies wield strong influence over the content creators that register with their programs, and can hold them accountable to ensure they disclose these advertising relationships in their content. At the very least, they should not make it harder to comply with applicable laws and regulations.
Source: Freedom and Security