Why Care About Compliance?Written by Dawn Kidwell
October 14, 2012 # 1:58 pm # Legal Challenges, Marketing Insights, Specials # One Comment
In the past year alone, the Federal Trade Commission (FTC) accused 10 individual affiliate marketers and two affiliate networks of using deceptive online marketing practices. In the interest of increasing consumer protection against such acts, officials at both the state and federal levels are aggressively enforcing compliance regulations, and they have set affiliate marketers in their sights. So, should you care if the affiliates in your network are compliant with marketing regulations? In a word? YES.
When it comes to compliance, it’s better to be proactive than reactive. Affiliate marketing evolves almost daily, and so do compliance issues. For starters, you must stay on top of the changes. Educate yourself. Pay attention to the outcome of legal cases. Don’t just read the laundry list of actions taken against the accused parties, but consider how those actions might be relevant to your own risk assessment plan. Think about how difficult those steps would be to implement in your network as well as their impact on your business. If it makes sense to incorporate some of these measures, do it. It might be a little painful, but it’s better to endure a little pain now instead of a lot of pain later in the form of a full-blown government investigation.
Second, create an air-tight Terms of Service (TOS) document that communicates your expectations to your affiliates from the get-go. Let them know up front the types of promotions you allow and the types that will serve as grounds for termination. Tell them what you will monitor if they choose to do business with you. Outline the actions that you will take should violations occur. An experienced regulatory compliance lawyer can help you with this. Once that legal document is in place, enforce it consistently and fairly. As an extension of this, research the marketing practices of any merchants and affiliates you wish to do business with before you sign on the dotted line.
Third, if you get the sense that an affiliate is non-compliant, check it out. Don’t ignore the behavior and don’t wait. It’s better that you discover the bad behavior before the Feds do. Document everything. Print screen captures and statistics, and jot down anything that even gives a whiff of illegal stink (sign it, date it, time stamp it). Then, take action. Every so often, check up on your top performers to find out why business is so good. Make sure it’s because they are truly marketing ninjas and not marketing nightmares.
Lastly, regulatory compliance is serious and complicated business. If you aren’t sure where to start or if you are wondering if the compliance documents and monitoring program you have is place are enough, AffiliateFairPlay.com offers a jumping off point. The site offers links to FTC Advertising Guides, network log analyzers, legal cases, competitive intelligence resources, and monitoring software. When it comes to regulatory compliance, you really can’t afford not to care.