Your Legal Requirements as an Affiliate or Influencer

Affiliate marketing is closely related to influencer marketing, and it's a great way to diversify and add income streams to your business and get an extra boost of cash in your bank account. Affiliate marketing is easy to do when you already love a product or service and have been using it yourself. If you've already been referring people to it and telling everyone what you love about it, then why not get paid for your loyalty and marketing, right?

The know, like, and trust factor is a huge reason why people decide to make a purchase, and if you've built an engaged community, it's likely they're going to trust your recommendations and are more likely to buy what you recommend.

Even if you don't think of yourself as one, you might just be an influencer after all! But there's more to influencer and affiliate marketing than just posting on your socials. There are some key legal requirements you need to keep in mind too. Read on to learn exactly what these are so you can keep it legal when promoting and sharing all your favourites.

What Is Affiliate Marketing?

Affiliate marketing is when you partner with a company or brand to promote, recommend, or endorse a product or service. It doesn't matter how big or small the brand is, any business can implement affiliate marketing.

An affiliate marketing arrangement may pay the affiliate out in free product, commissions, or even discounts, in exchange for them promoting and sharing about their products or services.

Is Affiliate Marketing Legal?

Yes, absolutely! Affiliate marketing is 100% legal. However, it's important to know that as an affiliate, you're technically considered an influencer, so it's important that you understand the influencer disclosure requirements.

As long as you know the laws that govern you and ensure all of your posts, promotions, and marketing materials follow the affiliate marketing guidelines, you'll be set up for success.

Affiliate vs. Influencer vs. UGC: What's the Difference?

When this post first went up, "affiliate" and "influencer" covered most of the creator world. Now there's a third term you'll hear constantly: UGC, or user-generated content. They overlap, but they aren't the same thing, and the difference matters legally.

• An affiliate promotes a product using a unique link or promo code and earns a commission on the sales they drive.
• An influencer is paid, in cash or product, to promote a product to their own audience. Affiliates are really a type of influencer, which is why the disclosure rules below apply to both.
• A UGC creator makes content, usually short videos or photos, and hands it to the brand. The brand posts it on its own channels or runs it as a paid ad. A UGC creator often doesn't post anything to their own following at all.

Here's the legal piece people miss: the disclosure rules below apply to whoever is doing the posting. If you're an affiliate or influencer posting to your own audience, the disclosure is on you. If you're a UGC creator handing content to a brand, the brand is responsible for disclosing when it posts your content as an ad.

The bigger legal issue in UGC deals is usage rights and ownership: how long the brand can use your content, on which platforms, and whether they can run it as paid ads. If you're hiring UGC creators, or working as one, you need a written agreement that spells this out. Our Influencer Agreement covers these usage and ownership terms, and can be set up for UGC-only, content-delivery arrangements.

How to Keep Your Affiliate Marketing Legal

There are a few things you need to keep in mind in order to make sure your affiliate marketing meets certain legal requirements.

Most of the laws around affiliate and influencer marketing are aimed at ensuring that your community is aware that you have a material connection with the brand you're promoting or endorsing, and that they understand you're being compensated in some way for promoting them.

In Canada and the US, there are laws that you as an affiliate need to be aware of and follow so that you don't find yourself in legal trouble.

In Canada, the Competition Act governs advertising and marketing standards. In the US, the Federal Trade Commission's Guides Concerning Endorsements and Testimonials sets out the rules affiliates and influencers need to follow.

To learn more about the Ad Standards Guidelines in Canada, click here. For more information on the Federal Trade Commission's Disclosures 101 for Social Media Influencers, click here. Whether you're located in Canada or the US, you should be familiar with the guidelines in each country.

Who Needs to Comply With Affiliate and Influencer Laws?

As an affiliate or influencer, it's YOUR responsibility (not the brand's) to ensure that your posts are legal, although the brand could find themselves in hot water too, and that you're not being deceptive to your community.

Not knowing your legal requirements for affiliate marketing isn't an excuse! Anyone who is sharing their affiliate link or promo code, or is receiving any kind of compensation for promoting someone else's products or services, should disclose their relationship as an affiliate with the brand.

This compensation could be gifted products, money as commission, or discounted or free services. It doesn't matter how big or small your business is, how many products you're promoting, or whether or not you receive compensation, you still need to disclose that you're acting as an affiliate.

Honesty of Affiliate Experience

All content posted by the affiliate must be clear, true, and not misleading. For example, you can't market a product or service you've never used before!

All posts, blogs, publications, testimonials, and endorsements by the affiliate must (i) reflect the genuine and reasonably current personal opinion of the affiliate; (ii) be based on adequate information or experience of the product; and (iii) be reflective of their actual use and, if implied, continued use of the products.

Affiliate Disclosure of Material Connection

All posts, blogs, publications, testimonials, and endorsements must disclose any material connection between the affiliate and the company, including (i) any payment; (ii) receipt of free products or services; or (iii) any combination of payment and free products or services.

Affiliate Disclosure Language

In general, the affiliate must include affiliate disclosure language in all of their posts, blogs, publications, testimonials, and endorsements. Such disclosure must clearly indicate that there's a material connection between the affiliate and the company, and what the nature of that connection is.

The affiliate must use at least one of the following terms, or a similar term, in all posts, blogs, or publications:

• "Paid ad" or #Paid
• "Ad" or #Ad
• "Sponsored" or #Sponsored
• "[COMPANY NAME] gave me this [PRODUCT NAME] to try"

Ambiguous language must not be used to disclose a material connection, including terms such as "Ambassador," "Thanks," "Collab," or "Spon." These simply don't cut it. Your hashtags need to clearly show the material connection between you and the brand, and make it obvious that you're getting some kind of compensation for promoting what they're selling.

Don't bury the hashtag at the bottom of your content. Make sure it's easy to find and clearly stated. Disclosing your affiliate connection first in your content is the best way to approach this.

Placement of Affiliate Disclosure

Affiliate disclosure of the material connection with a company must be:

• Clear. It's easy to determine that there's a material connection between the affiliate and the company.
• Prominent. For example, the disclosure must be included near the top of a social media post, in a video or IG story endorsing a product, or "above the break" in a blog post.
• Made in close proximity to the claim(s) it relates to. The disclosure is clear and conspicuous, separated from other text, in a font that's easy to read and clear enough to be noticed. The disclosure cannot be buried in the post or in the comments.

How to Disclose That You're an Affiliate

Your affiliate disclosure should be close to your affiliate link, meaning that someone shouldn't have to go hunting for it. It should be clear and easy to find. Don't simply link to your affiliate clause in your Terms of Use. While you absolutely CAN do that as well, you should ALSO disclose your affiliate relationship within your content, near the link.

For blog posts and emails, the best practice is to put the disclosure "above the fold." This means the reader knows before they start reading that there are affiliate links, versus only finding out if they read all the way to the bottom of your content.

An affiliate disclosure example could read something like this:

"This blog/email contains affiliate links. We may earn an affiliate commission if you purchase something through our affiliate link or promo code."

If you're using a photo to promote your disclosure, the language should be overlaid on the picture so it's easy to read if there's no caption where you can clearly make this disclosure.

If you're doing a live stream, mention the connection and that you're an affiliate several times so that people are made aware of it, even if they only tune in for a portion of the video.

On social media channels, use the Paid Ads option whenever you can. If you have any affiliate links anywhere on your website, you should have an affiliate disclosure statement in your Website Terms of Use, too.

What Happens If I Don't Disclose My Affiliate Relationship?

You may be subject to criminal penalties and fines if you find yourself liable for deceptive marketing. Not to mention, you'll likely lose your rights to promote the brand! The brand could also be found legally liable if an influencer or affiliate fails to make the right disclosures.

So if you're creating an affiliate program or hiring influencers for your own business, it's a really great idea to pass along brand guidelines that include the legal requirements for affiliate marketing, to ensure your affiliates are legally promoting your product or service.

If you're working in affiliate or influencer marketing, the best rule of thumb is to be transparent, straightforward, and honest about your relationship with the brand you're promoting. Make your affiliate disclosure clear, easy to read, and obvious. Your community will appreciate the transparency and will be more likely to purchase through you than if you were to act secretively.

Lastly, only promote the brands and products you love, and keep your content as real and authentic as possible. Affiliate marketing is all about integrity!

The Contracts You Need to Keep It Legal

Following these guidelines will help ensure you're meeting your legal requirements as an affiliate or influencer. To put the right paperwork in place:

• If you're starting an affiliate program, our Affiliate Program Terms set out all the legal requirements and details for your program.
• If you're hiring influencers or UGC creators to promote your products or services, our Influencer Agreement sets out the working relationship, payment, disclosure obligations, and who owns the content.

Don't send money or product out the door without an agreement in place!