WSJ Article on Fashion Blogs Raises Questions About FTC Compliance

Jennie Scholick Feb 18, 2015

Sometimes the stars align and topics you’re already thinking about suddenly become major news items. Last week’s news cycle was was all about affiliate marketing, starting with a Wall Street Journal article about how style bloggers monetize their blogs, Pinterest, Twitter, and Instagram accounts, and culminating in Pinterest’s announcement that it would be banning affiliate links from its site.

Today, I want to talk briefly about that first article in the Wall Street Journal, written by Elizabeth Holmes, entitled “How Style Bloggers Earn Sales Commissions, One Click at a Time: Blog Links That Redirect Readers to Retail Sites Are Expanding to Twitter, Pinterest and Instagram.” This article raised a few red flags for us at BrandVerity, especially as we’ve been spending a lot of time thinking about FTC regulations over the past weeks.

A few lines in particular stood out as we read through this article:

"The money comes from the dozen or so links Ms. Tanita places at the bottom of each post that whisk readers to retail sites selling the products she is wearing...Every time a reader clicks and buys from a linked retailer, for the next month Ms. Tanita will get a cut of the sale, whether it’s an item featured on the blog or any product the retailer sells. And the typical reader is none the wiser."

“Commission-generating links are the nuts and bolts of “affiliate marketing,” a mechanism that is one of the most common, least visible ways the Internet funnels blog readers onto retail sites.”

“Julia Engel, a 24-year-old San Francisco resident with a style blog called Gal Meets Glam, says she thinks her readers understand how affiliate marketing works and don’t mind. “People are always going to ask me where something is from, and I’m always going to answer,” says Ms. Engel. “So if I can be credited for that purchase, it’s a win-win situation.”

Links are subtler than in-your-face display ads, and they are far simpler than the elaborate partnerships some brands have brokered with bloggers in exchange for sponsored posts, personal appearances and social-media mentions.”

They aren’t thinking about whether a blogger makes a commission like some store salespeople.

The article definitely leaves the reader with the sense that these bloggers are not clearly disclosing their relationship with these merchants. The FTC is very clear that disclosures need to be “clear and conspicuous” and that they should not be “relegated to ‘terms of use’ and similar contractual agreements.” (And a quick look at a few of these sites confirmed this is exactly what is happening. While disclosures are there, they are not on every post and are often buried fairly deep into the sites on separate “Disclosures” pages).

As Tricia Meyer made clear in a ReveNews post a couple years ago, the FTC does consider it necessary for affiliates to clearly disclose their merchant relationships to readers. The fact that this Wall Street Journal article makes no mention of disclosures should raise a few eyebrows amongst merchants and OPMs. In most cases, it’s not the bloggers who are going to feel the effect of FTC violations, it’s the merchants, so they should be very wary of the views expressed in this article. As Tricia said in her post:

“The guidelines make it clear that the “old way” of putting a basic disclaimer somewhere on your site or even at the bottom of blog posts no longer counts. If you put an affiliate link on Facebook or Twitter, you must disclose that it is an advertisement BEFORE the link. How many people do you see actually doing that?”

Last week, the Wall Street Journal replied, “none.”

Topics: Marketing Compliance

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