On 1st December 2009 new FTC guidelines were implemented for all those doing business on the internet with U.S. consumers/entity. It means any one being paid by US based company or where any part of online business or transaction takes place in US, the changes to the FTC guidelines will be applied to them. So publishers or affiliates promoting any US based merchants or targeting US customers have to follow the new FTC guidelines.
The new guidelines want affiliates to disclose their financial relationship with the merchants whose products they are promoting. Also next they want is to stop misleading and fraudulent testimonials which is the usual trend being used by affiliates to deceive visitors.
Many believes that the later part will hardly affect the affiliate marketing in whole but yes rogue marketers, spammers and unethical marketers would certainly have to be on alert. Those providing fake and fraudulent testimonials of products will have to revamp their marketing strategies or else they would be in a big trouble. This may even give genuine marketers or affiliates an opportunity to get more conversion due to the trust they will built with visitors.
However disclosing how much they are earning is something affiliates are worried about. This disclosure can be as short as "Disclosure: Compensated Advertising" or "Paid Advertising". However the point is that the disclosure must be clear and conspicuous. It should provide an idea to the reader that there is a connection between the endorser and the seller. Usually FTC will not be applied unless there is an endorsement/recommendation, so affiliate marketing involving in any kind of straight advertising would be safe however if they are endorsing or recommending any products they have to provide a compensation disclosure.
Where to put the disclosure is again a big question. FTC wants affiliates to put disclosure that is easily and clearly visible to the visitors. Of course this does not mean they want affiliates to put this disclosure just as affiliates links. Obviously that is not the intention of these regulations. Their main intention is to create transparency in partnership between affiliates and merchants. It should clarify to the people the difference between advertising and non advertising. However how to put a disclosure is not yet clear. Lets hope to see some news on it soon.
People not following the guidelines would be charged $11000. So all the affiliates or publishers working with US based entity will have to make sure they properly follow the FTC guidelines. If you have any issues of query you may call them directly or mail them and find out. That would give you the better idea and help you to be safe from any kind of issues.
http://www2.ftc.gov/opa/2009/10/endortest.shtm
http://www2.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf
http://www2.ftc.gov/opa/2009/10/endortest.shtm
http://www2.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf
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