Confronting Regulatory Challenges with Alternative Health Publishers

In April, the FTC filed suit against fake news sites promoting Acai berries as weight-loss products, and attempted to freeze the assets of companies involved, pending trial. Beyond the sites themselves, the network through which these publishers operated was also under review.

While this incident is not representative of the performance marketing industry as a whole, cases like these teach us that quality and integrity are vital publisher characteristics — especially those that work in sectors facing strict regulation. Publishers and advertisers in this sector have responsibilities but both parties can take steps to minimize the risks and maximize the benefits of their performance-based marketing.

What should publishers do?

Following a revision to FTC regulations in 2009, publishers promoting alternative health products are required to add a disclosure statement to their sites clarifying their commercial relationship with advertisers. FTC regulations state that “when there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement... such connection must be fully disclosed.” The first thing publishers must do therefore is provide this disclosure onsite, regardless of whether or not the advertiser requests this action. As mentioned, those who fail to follow this policy could face extremely steep fines.

To ensure compliance, publishers can easily write the statement themselves (or visit DisclosurePolicy.org). Further, placing the disclaimer on a separate page within their site can provide blanket coverage to all links rather than attaching the statement to each individual link. The likely effect on conversions is therefore minimal provided the statement is clear and factual.

What should advertisers do?

While publishers are primarily responsible for disclosing the commercial relationship, advertisers are responsible for advising the publisher to do so. Further, advertisers should ensure that all publishers on their program are compliant with regulations. A crucial element to enforcing compliance falls within the program terms and conditions, which should clearly state the need for publishers to use this disclaimer. This action is vital because entering into a commercial relationship with a publisher means “...the advertiser has assumed the risk that an endorser may fail to disclose a material connection or misrepresent a product, and the potential liability that accompanies that risk.” However, the advice goes on to state that “the advertiser’s efforts to advise these endorsers [publishers] of their responsibilities and to monitor their online behavior” will be taken into account should any issues arise.

Ultimately, it is the advertiser’s responsibility to ensure that the correct product information is communicated to their publishers. The FTC considers it “reasonable to hold the advertiser responsible for communicating approved claims.” Given that the advertiser established the relationship with the publisher, they are “...responsible for taking the appropriate measures to prevent those endorsements from deceiving consumers.” Therefore, to help ensure publishers are clear in how they use the promotional material, advertisers may wish to provide a set of pre-approved copy in different lengths that publishers can easily paste to their sites to alleviate any compliance concerns.

In a case settled in March this year, the FTC also stated that “whether they advertise directly or through publishers, companies have an obligation to ensure that the advertising for their products is not deceptive.” They go on to advise a “reasonable monitoring program to verify that those publishers follow the principles of truth in advertising.” Advertisers therefore need to consider what this monitoring process should look like. They may wish to undertake a regular audit, conducted with the input of their network. An added benefit to this action includes identifying re-engagement opportunities with dormant publishers. More cautious advertisers may wish to run an invite-only program that remains publicly hidden on the network, making the task of building relationships with publishers and monitoring their activity more manageable.

Advertisers in fields such as health face a tough regulatory environment. With proper attention to the points outlined however, the alternative health sector can successfully drive business through this channel. Ultimately, a higher level of regulation is good news for the affiliate industry, as it will sweep away malpractice and leave advertisers with professional and capable publisher partners. The health market could present a sizable opportunity for quality publishers, as health advertisers will likely pay a premium for trusted promotional partners.

About the Author: Owen Hewitson is a client strategist at buy.at & Affiliate Window.

Also Read: Sector Watch on Entertainment for Affiliates
It’s not just the alternative health sector that is attractive for affiliate marketers. Learn effective affiliate promotional types, various means of engagement, and review misconceptions surrounding affiliate marketing within the entertainment sector.