Industry News | Finch Sells

FTC Now Requires “Sponsored Post” Disclosure

Oct 05 2009

News has broken today that the FTC is making a change to the “Guides Concerning the Use of Endorsements and Testimonials in Advertising” for the first time in almost 30 years.

Here’s what you need to read:

“The revised Guides also add new examples to illustrate the long standing principle that ‘material connections’ (sometimes payments or free products) between advertisers and endorsers–connections that consumers would not expect–must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other ‘word-of-mouth’ marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service.”

Source: http://news.cnet.com/8301-1023_3-10367464-93.html

Failure to disclose payment terms can now result in an $11,000 fine. A drop in the ocean for many successful affiliates, but the deterrent itself will probably shave off more profits than the fine.

Now while this is obviously relevant to floggers, it applies pretty directly to those of us in the affiliate marketing blogosphere. Personally, I think it’s a welcome change. It was only last week with the re-design of this blog that I added an Important Information page to vent my own frustrations with the blogging for riches business plan.

There are bloggers out there – hot shot super affiliates – who will shotgun their readers with any crap that pays a commission. It only takes one reputation built on sand and naive new marketers will buy in to just about anything. While some financial disclosure isn’t going to stop that, it will hopefully expose a level of doubt in what some of these super affiliates will sell their word for.

As far as flogging goes, I can’t see this change making life any more difficult than it already is. If you’re a flogger, you should already be painting your pages in an endless wall of disclaimers. It’s necessary to cover your back. As far as I can see, most of the high exposure flogs are already small printing in the fact that they’re paid a commission.

The real problem for the FTC is policing these changes. How do you tell the difference between word of mouth friendly praise and a second motive of money changing hands? Sure there are affiliate links being dropped, but it wouldn’t surprise me if some of these sketchy companies started implementing a new off-site method of tracking. A “we’ll catch your referral on the other side” type mentality. It’s also pretty damn hard to nail a Paypal transaction on a sponsored post. How are they going to bust these private sponsorship agreements?

Good luck to the FTC. You’ve got your work cut out.

Acai Berry Flavoured Shit Hits The Fan In Illinois

Aug 20 2009

Another day, another dose of acai berry backlash in the press.

I was taking a read over Wickedfire when I caught sight of this thread. It seems that the Attorney General in Illinois has decided to take firm action against acai berry floggers. This news is particularly significant as it involves both the advertisers and a couple of well known affiliates.

Read the article here: Attorney General Madigan Files Suit Against Acai Berry Companies

Now there’s a bunch of issues that come to light from this news. Firstly, you’ve got the whole drama of fake celebrity endorsements.

Not to criticize fellow affiliate marketers too heavily, but if you buy a domain with Oprah’s name attached – and promote a rebill as if it fell out of her fat ass – you deserve all the trouble you get. I’ve invented my fair share of sales stories, but I’ve stopped short of imaginary Hello magazine endorsements. It’s just a legal minefield. I’m a pretty strong advocate of aggressive marketing. But that’s not aggressive marketing. It’s barely even marketing.

If Viagra Plus posted my smiling face and promised the world “As Seen On Finch’s Bedside Table”, I’d be pretty fucking heartbroken. Somebody else’s business is somebody else’s business. Sure, half of America is dumb and willing to buy anything Oprah shills on her talk show. But you can’t go sticking your wang in other people’s pies. Fake celebrity endorsements are the sort of harmful and misleading advertising that are ultimately gonna come back to haunt this industry. For some, clearly, it already has.

The second issue raised in the lawsuit – and arguably the bigger problem for most affiliates – is the action threatened against flogs. Most media publications have been pretty slow to “get” what a flog is all about. But in the latest round of lawsuits, the AG Lisa Madigan has gone out of her way to directly implicate these kinds of websites.

No doubt, widespread legal action against floggers would dump the cat amongst the pigeons. Not just because the acai berry market is so dominated by this kind of marketing, but because it’s spreading so rapidly to other niches and verticals.

Flogging for bizopps, flogging for anti-ageing…Christ, even flogging for dating (Try it, you’d be surprised!). If this form of marketing becomes a process of walking the legal tightrope, we’re going to see a lot of movement and a lot of top earners rethinking their marketing ways. Personally, I see that as a good thing. A flog, when you break it down, is pretty basic and doesn’t require much “level of entry”.

So what are we going to see next? If advertisers get hit for using fake celebrity endorsements – where does their next logical step take them?

How about…ACTUAL celebrity endorsements?

It’s happening already. I got a tip-off from one of my affiliate managers today about a muscle-building rebill that is apparently enjoying quite a lot of success on Advaliant. The catch? It’s genuinely endorsed by Stephan Bonnar. If you don’t know, Bonnar is a hulked up dude from UFC who looks like the sort of wet dream the target market for the offer would have.

Most of the top advertisers can afford to pay for a genuine celebrity endorsement. And I think this is what we’re going to start to see in the future. The celebrities don’t have to be A-List. As long as the name rings a bell in the consumer’s head, that’s all that matters. Credibility only has to be subtle to be effective.

Affiliate marketers have been running wild with fake celebrity testimonials for as long as I can remember now. The best way to sustain the tactic in the long term is to take the method and make it legit. Pluck a C-List celebrity out of obscurity and create some consumer trust.

If you’re sitting there now, scouring Google Image search for Oprah pics to throw in to your flog, stop for a second and think about the long term repercussions of what you’re doing. You’re not really marketing. You’re making up bullshit lies to sell a bullshit product. I can live with the bullshit product. But trademark infringements and slinging on somebody else’s rep – that’s no way to skin the cat.

Good luck to those affected by the latest round of lawsuits. I’m kinda anticipating a scapegoat to be made at some point in the near future. Best to comb your facts from your fiction to make sure that scapegoat doesn’t become you.

For clarity, I do not use Viagra Plus.

Yahoo To Crack Down; How Doomed Are You?

Jul 28 2009

Affiliates make Baby Jesus cry, didn’t you know?

Google caught some headlines last month for banning a bunch of affiliates on the back of a rebill offer. Now word has caught the wind that Yahoo is about to drop an axe on the same bruised and battered floggers. It was supposed to be “Black Friday” for affiliates. Well, a few days have passed, and it seems that a whole bunch of guys are scraping by undetected from the alleged editorial clampdown.

Some very reliable sources have stated that the “Yahoo slap” is only a matter of time.

If you’re one of the guys who got dislocated from Google, you’ve probably taken a rapid interest in Yahoo. It’s decent volume at decent value and it’s self-serve.

A lot of affiliates are going to be pissed off to hear it, but the whole self-serve marketing strategy is about to bite the bullet on this one. If you’re really set on selling rebills, you’re gonna have to get used to breaking the budget on CPM based display ads. It’s just inevitable.

Okay, so when Yahoo finally does clamp down on the rebill offers (and they will), you’re gonna have a bunch of affiliates crowding the MSN space. I’ve advertised with MSN for a while now and I can tell you that the volume isn’t all that…and that’s WITHOUT having a massive influx of affiliates looking for homes for their campaigns.

I’ve said this over and over again. If you want to have success slinging a rebill offer, you better get smart about promoting it.

There are legitimate ways of getting these offers not just on Yahoo and MSN, but on Google too. It just requires a little invention and the guise to see beyond the “one shot” conversion. If your marketing expertise boils down to “I bid on this term and show them this page”, you’re going to get royally raped in the next few months – many times over.

You want to know the easiest way to build a long term campaign for a rebill on the big three PPC platforms? It’s simple. You don’t put your fucking rebill on the landing page.

Squeeze pages, opt-ins…whatever you want to call them. This is what you need to be doing – and doing well – to slip through the net and stay kicking in the search game.

It’s time to start collecting emails and taking on real-life business principles.

So you’re a promoting a bizopp which is getting scrubbed out of profitability – what do you do? You retain the lead. You design a business strategy where your only hope of converting that lead isn’t a one-time exposure to a flog.

Forget about your inconsequential clickthrough rate to the offer.

The second you start focusing on collecting emails instead of redirecting clicks to an offer – your clickthrough to the offer page is going to take a nosedive. That’s just the way it is.

But put it this way. If you have 50% of your 100 visitors going through to the offer page, is that really the best you could do? That’s 50 clicks to an offer.

What about if from those 100 visitors you collect 25 emails instead?

That lead is yours. It’s not going to get scrubbed and it’s not forever lost after it decides that your flog is a misleading piece of shit.

If you work your email list right, you could get 5 future clicks to another offer from each of those 25 emails. That’s 125 clicks to an offer. Instead of 50 – from the same original source of traffic. Your chance of converting the traffic no longer hinges on whether the prospect has his credit card in his pocket.

Of course, the real benefit of squeeze pages comes from the fact that your shady rebill isn’t immediately exposed. As soon as a Google intern reviews your flog, it’s gonna get marked with a low quality score. We’re hearing the same story coming out of the Yahoo camp. If you’re not seeing your ads slapped now, that’s no reason not to act now.

Jesus, I stumbled across Wickedfire earlier and I saw a bunch of affiliates shrugging and insisting that their campaigns were still rosy. Well, good for them. But I hope for their sakes that they’re moving fast to avoid the next slap – because it will inevitably come.

Staying one step ahead is what separates the earners from the eternal broke-as-shit learners.

I’ve spoken to several guys who are still reeling from the Google crackdown. I’d say the group is pretty much divided between those who are battering Yahoo and MSN with their old campaigns, and those who are trying to move on to display ads.

If you’re moving in to display ads and media buys, you’ve got one hell of a journey ahead of you. It’s possible to lose money rapidly when you switch from CPC to CPM. You can’t rest your hopes on an awesome landing page compensating for a poor clickthrough. You need top notch creatives, probably a professional designer, and enough moolah in the kitty to see it all go to burn many times over.

I strongly suggest you dip your feet in slowly with “monthly tenancy” offers and CPC banners where you can get them. You’re also about to discover just how much shitty traffic it’s possible to buy when you step away from Google. Be prepared to lose a lot of money before you make any. Be prepared to deal with sneaky asshole webmasters who’ll pull any string to make you believe that their traffic source is more valuable than it really is.

But for those of you who want to gut it out on the big three PPC platforms – I’ll say it one more time. You better get smart about it.