Exactly what is an affiliate compensation disclosure? It’s language you use to let readers of your website, blog, and commercial emails know that you’re an affiliate for a product or service that you’re promoting directly or indirectly in your content.
For example, if you write a blog post about Widget X Software, and use your affiliate hyperlink in the post, you will want to disclose that you have what the U.S. Federal Trade Commission (FTC) calls a “material connection” to what’s being promoted.
Why does the FTC want you to make this affiliate compensation disclosure?
So the reader can make an informed decision that includes the key fact that you may be biased because you get paid an affiliate commission on each sale. Without knowing you are an affiliate for the software you’re promoting, the reader might mistake your promotion of it as an unbiased reporting of the software’s merits. That’s been a big problem on the Internet with affiliates creating fake review sites that are nothing more than sales pitches.
It’s important to note that material connections you should disclose include more than just your affiliate status.
For example, if I promote Website Legal Forms Generator software as an easy and affordable do-it-yourself solution, I should disclose that there’s a material connection to the company.
In this example, I co-own the company and my law firm owns the copyrights to the website legal documents created by the software. If I were just an affiliate for the software instead, I’d still need to make a disclosure because of that material connection. If a relative or friend owned the software company, it would be necessary to disclose the existence of a material connection too.
Of course, the first place to start if you have any questions about affiliate compensation disclosures is contacting your Internet lawyer.