More Bad News for PayPerPost: FTC Getting Involved – Is Affiliate Marketing Next?

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The Washington Post reports that the FTC is getting involved in the PayPerPost debacle…

The Federal Trade Commission yesterday said that companies engaging in word-of-mouth marketing, in which people are compensated to promote products to their peers, must disclose those relationships.

In a staff opinion issued yesterday, the consumer protection agency weighed in for the first time on the practice. Though no accurate figures exist on how much money advertisers spend on such marketing, it is quickly becoming a preferred method for reaching consumers who are skeptical of other forms of advertising.

Word-of-mouth marketing can take any form of peer-to-peer communication, such as a post on a Web blog, a MySpace.com page for a movie character, or the comments of a stranger on a bus.

In my opinion, this should be a self-regulating and self-cleaning mechanism built into the world of online marketing. We should have the ability, and the foresight, to see these types of marketing schemes for what they are… manipulation marketing.

However, considering how vocal some “marketers” are about sketchy practices such as AdSense arbitrage, splogs, and the the inability of reason and the common good to control the market for the benefit of everyone, it seems that the FTC has to get involved to reign in the craziness. Pay per content schemes, whether they be explicit or tacit are not healthy for the blogging scheme, and do not provide bloggers and individuals with a long term sustainable way to make a living.

Provide good content, write about what you love and the traffic will come. You don’t need high stakes SEO or short term pay per post schemes to make a dollar, or an impact, in the blogging world.

So what does this mean for affiliate marketing?

Are links dead?

16 thoughts on “More Bad News for PayPerPost: FTC Getting Involved – Is Affiliate Marketing Next?”

  1. Is affiliate marketing next?

    Likely– no.

    But if it is, this affiliate marketer welcomes the attention. If the FTC is going to pay more attention to our industry, i can point them in the right direction. First stop: ShopAtHomeSelect, Ebates, the nasty CPA folks, et. al.

    Sally Sue downloads a new screensaver. Did the maker of that software tell her she’s receiving an advertisment? Will they tell her this every time that software overwrites her cookie??

    The only people that should be scared about this news are those who perpetuate this AND those who engage in parasiteware activites. If the FTC comes knocking on my door and asks if affiliate marketing needs some attention, I’ll tell them “hell yes– and here’s a grocery list of where to start”.

    Reply
  2. “Mike, why can’t you leave nice, thoughtful, helpful comments on my blog like you did here?”

    Sorry buddy- I had a beer between commenting on Revenews and commenting here at CostPerNews. =)

    Joking aside, I’m a big fan of Revenews and your posts. I just didn’t agree with your call to action on what I saw as a non-story. Next time, I’ll have that beer before I comment on your blog! Kidding, but at least I’ll buy ya one at the Summit.

    Reply
  3. Mike-

    Commenting after beer(s) is a sacred tradition here at CostPerNews. The affiliate/cpa network debate with 50 comments had more than its fair share of brew-inspired litanies.

    I’m agreeing with Mike on this point. From what I can tell from my sources, the FTC is not interested in the affiliate space proper. However, these types of situations should always be wake-up calls to make us evaluate our own practices and the practices of those we do business with in this industry.

    Nevertheless, Wayne knows more about the FTC than any of us combined… elaboration on your points Sir Porter?

    Reply
  4. As others have said, I think the issue is with endorsements that seem to an intelligent adult to be uncompensated, but actually are. I don’t think normal affiliate links and banners, or even coupon sites or loyalty sites, create such a situation. Anyone clicking on these links understands they are ads or earn compensation.

    Reply
  5. As others have said, I think the issue is with endorsements that seem to an intelligent adult to be uncompensated, but actually are. I don’t think normal affiliate links and banners, or even coupon sites or loyalty sites, create such a situation. Anyone clicking on these links understands they are ads or earn compensation.

    Reply
  6. “1) FTC taps lightly on spyware (IMHO) yet now appears to drop the hammer on affiliates. ”

    Not seeing any hammer. The only people that should worry about the FTC getting involved in anything are those up to no good. So that’s not a deal at all to most. As far as disclosure. Not a big deal either. Most affiliate sites are pretty self explanatory. If anything you might have to disclose on some Terms Of Use page on your site that nobody reads that you get compensated when sales are made off your links. I’ve had that for years and again for those that don’t and if the FTC says you must disclose. A few minutes of work adding it in. So when I read this, it’s just business as usual.

    Reply
  7. “1) FTC taps lightly on spyware (IMHO) yet now appears to drop the hammer on affiliates. ”

    Not seeing any hammer. The only people that should worry about the FTC getting involved in anything are those up to no good. So that’s not a deal at all to most. As far as disclosure. Not a big deal either. Most affiliate sites are pretty self explanatory. If anything you might have to disclose on some Terms Of Use page on your site that nobody reads that you get compensated when sales are made off your links. I’ve had that for years and again for those that don’t and if the FTC says you must disclose. A few minutes of work adding it in. So when I read this, it’s just business as usual.

    Reply
  8. “Wayne knows more about the FTC than any of us combined… elaboration on your points Sir Porter? ”

    No elaboration Sam. Folks can draw arrows if they think about it. Think about the time frame for them to address spyware versus timeframe for them to address disclosures like pay per post.

    No hammer yet- the word I used was “appears”. the FTC is selective in their punishment. Ensuring those they snare are good public examples.

    Reply
  9. “Wayne knows more about the FTC than any of us combined… elaboration on your points Sir Porter? ”

    No elaboration Sam. Folks can draw arrows if they think about it. Think about the time frame for them to address spyware versus timeframe for them to address disclosures like pay per post.

    No hammer yet- the word I used was “appears”. the FTC is selective in their punishment. Ensuring those they snare are good public examples.

    Reply

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