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. Its very different from an affiliate program agreement (don’t confuse the two!).
For example, if you write a blog post about Widget X Software, and use your affiliate hyperlink in the post, you should 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.
Of course, that’s been a big problem on the Internet because some affiliates are creating fake review sites that are nothing more than sales pitches.
Types of Material Connections You Should Disclose
Now, it’s important to note that material connections you should disclose include more than just your affiliate status. This includes partial ownership of a business you’re promoting and even ownership of the business by a friend, relative, or client. In other words, key facts a prospective buyer should know in order to make an informed purchasing decision.
