Your Legal Requirements as an Affiliate or Influencer
Affiliate marketing (also known as influencer marketing!), is 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 have built an engaged community, it’s likely they are 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! However, there’s more to influencer and affiliate marketing than just posting on your socials. There are some key legal requirements for affiliate marketing 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 as an affiliate.
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 does not 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 are 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 will be set up for success.
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 are promoting or endorsing and that they understand that you are 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 are located in Canada or the US, you should be familiar with the guidelines in each country.
Who Needs to Comply With Affiliate Marketing and Influencer Laws?
As an affiliate or influencer, it is 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 are 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 are promoting, or whether or not you receive compensation, you still need to disclose that you are acting as an affiliate.
Honesty of Affiliate Experience
All content posted by the affiliate in carrying out the services agreed upon in the influencer agreement 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 is 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 affiliate disclosure example 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 just 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 are getting some kind of compensation for promoting what they are selling.
Don’t bury the hashtag at the bottom of your content set. Make sure it’s easy to find and is 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 is a material connection between the affiliate and the company.
- Prominent - For example, the disclosure must be included in posts or tweets, 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 or social media post. .
- Made in close proximity to the claim(s) to which it relates - The disclosure is clearly and conspicuously, i.e., separated from other text, in a font that is easy to read and clear enough to be noticed and read. The disclosure cannot be buried in the post or in the comments.
How To Disclose That You Are An Affiliate
This means that for blog posts and emails, the best practice is to put the disclosure “above the fold.” This means that the reader will know before they start reading there are affiliate links, versus only finding out if they read all the way through 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 are using a photo to promote your disclosure, the language should be overlaid on the picture so it is easy to read if there is no caption where you can clearly make this affiliate disclosure.
If you’re doing a live stream, make sure you mention the connection and that you are an affiliate several times so that people are made aware of the connection, even if they only tune in for a portion of the video.
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.
Therefore, if you are creating an affiliate program or hiring influencers for your own business, it’s a really great idea to pass along brand guidelines that include legal requirements for affiliate marketing to ensure that your affiliates are legally promoting your product or service.
If you are working in affiliate marketing or influencer marketing, the best rule of thumb is to be transparent, straightforward, and honest about your relationship with the brand you are promoting.
Make your affiliate disclosure and affiliate link disclosure clear, easy to read, and obvious. Your community will appreciate this transparency and will be more apt 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!
Following these guidelines will ensure that you meeting your legal requirements as an affiliate or influencer. If you are looking to start an Affiliate Program we have Affiliate Program Terms that set out all the legal requirements and details for your affiliate program. If you are looking to hire influencers in your business to promote your products or services, check out our Influencer Marketing Agreement which is an agreement that sets out all the details of your working relationship with people you hire to promote your products. Don't send money or product out the door without an agreement in place!