My Take On The New FTC Rule Concerning Online Marketers

Before I share my point, here’s a major update regarding this blog:

1. I am too busy on my recently launched site (not related with online marketing) so you will just see me write a new post twice or at least once a week. To make up for it, I’ll make sure to give you articles that is really informative and worthwhile.

2. I’ve been asking my other website’s visitors about their biggest problem on their online business and generating traffic comes on top of the list. So I’ll be posting more on this topic and probably would change the whole structure of the site accordingly.

I think that’s about it…now on with the topic – The New FTC Guides Governing Testimonials and Endorsements.

If you haven’t read about it yet, here’s a link to the FTC’s site: http://www.ftc.gov/opa/2009/10/endortest.shtm

Before moving on, I just want to say that what you are going to read here are just my personal opinion. This should not be taken as a legal advice. I am not a lawyer and neither know a lot about laws (I’m not even based in the US!).

Before taking any suggestions, you should first approach your lawyer. Plus, if you do not agree with my site’s TOS, please leave this site now. : )

Whew…a very boring paragraph to read right? But you’ll be seeing a lot of those in the near future so you just might as well get used to it.

I assume that you have read the new guide on the link I gave you above, if you haven’t or is too lazy to click and even glimpse on it (like most people do), you can continue reading…just don’t take it out on me if your business get busted later on.

As you know, these new rules will greatly impact all online businesses that have testimonials (results-driven and income claims – yes, now you can’t use the most effective type unless you include a disclaimer that states the average typical result of  your buyers) and those that are doing endorsements and any product referrals.

Here’s what I have to say:

1. Testimonials.

If you are one of those that do use “specific” results-driven testimonials or post income claims/ proof, you should consider changing it. Unless you want to put a disclaimer after each testimonial stating the average typical result of your buyers which, for most if not all, is pretty embarrassing.

Here’s why:

No matter how good your products are, your average result will always be really really low. A really high quality product with an income proof of $5,000 per month and with customer testimonials showing a result of $1,000 in the first month, may have an average result of $00.01 or probably less.

And it’s not because the claims or testimonials are fake, its because a lot of buyers (we’re talking about 80%+ here) will not finish reading it, will not even follow the information, and will not take any action at all. I’m guilty of it…and I know you are too.

For example, this “Buffettology” book that I purchased two years ago. I haven’t finished reading it until now. I remember reading the first chapter but after that, I just put it in my pile of unfinished books. Why did I bought it? It’s because it’s the current “craze” way back then.

How many ebooks, books, e-courses, etc. do you have in your hard drive? How many of those you actually finished reading and took action til the end?

My solution:

Use other type of testimonials. The one’s that are pretty general and doesn’t convey your customer’s results like “Hey Ricz, I really love your product. Looking forward to purchase another one from you.”

If you really want to use “results-driven” and income claims testimonials, you just have to find a way to state the disclaimer and reveal what your average “typical” result really is in a way that it doesn’t devalue your product.

2. Endorsements/ Recommendations

FTC wants you to fully disclose to your website visitors the real relationship between you and the products you promote/ endorse/ recommend. If you earn any compensation from it (commissions, paid reviews, etc…), you need to tell them. Transparency is key.

My Solution:

This one won’t really affect your sales if you do it right. If you’re targeting other niches (not the make money online/ internet marketing niche), you don’t have to worry about it at all. Of course, disclose to your website visitors that what they are clicking is your affiliate link and that you are receiving a payment from recommending it. Non-IM guys won’t really mind it at all.

If you are in the make money online/ internet marketing niche, find a way to make them buy from you and not from other sources. You can do this by offering high quality bonuses that complement the product your promoting. The only way that they can get these bonuses is when they get the product from your affiliate link.

To reiterate, please don’t use this as a legal advice. Always consult your lawyer regarding this and don’t think that you can get around with this new rule. Do your best to always comply!

I would love to hear your opinions about this new rule. If you have something in mind, you can freely do so by replying below. : )

Others who read this post also read:

• August 31, 2009 -- Getting Ideas For Your First Info Product (1)
• August 25, 2009 -- How To Become An Expert In Your Niche (1)
• August 10, 2009 -- Don’t Be Sold! (1)
• August 1, 2009 -- How to Write a Sales Letter That Really Sells (5)
• September 9, 2009 -- Split Testing Basics (2)

Tagged As: Affiliate Marketing, Internet Marketing, Internet Marketing Tips, new ftc rule, online business, online marketing