Despite the fact that the Federal Trade Commission (FTC) began requiring affiliate disclosures in 2013, a new study conducted by researchers at Princeton University has found that very few influencers on YouTube and Pinterest are disclosing affiliate links.

The researchers took a representative sample of half a million YouTube videos and over 2m Pinterest pins published by influencers over the course of a month in 2017 and found that more than 3,000 videos and 18,000 pins contained affiliate links. But only 10% of the videos and 7% of the pins contained a disclosure. The number of videos and pins subject to the disclosure rules but that failed to follow them is probably higher as the researchers did not look at videos and pins containing coupon codes, which can also be used to track sales referred by affiliates. 

What's required

The FTC's endorsement guides specifically address affiliate links and state that disclosure of these links must be “clear and conspicuous.” The agency explains:

The closer [the disclosure] is to your recommendation, the better. Putting disclosures in obscure places – for example, buried on an ABOUT US or GENERAL INFO page, behind a poorly labeled hyperlink or in a “terms of service” agreement – isn't good enough. Neither is placing it below your review or below the link to the online retailer so readers would have to keep scrolling after they finish reading. Consumers should be able to notice the disclosure easily. They shouldn't have to hunt for it.

But according to the Princeton researchers, most of the disclosures it did find were anything but clear and conspicuous and that “Explanation disclosures – which the FTC recommends – only appear in 1.82% and 2.43% of affiliate content on YouTube and Pinterest respectively.”

That might have something to do with the fact that few are aware of the rules. Indeed, the Princeton researchers noted in their paper that of the eight affiliate companies that were most prevalent, which include Amazon, AliExpress, Commission Junction and Rakuten, only two explicitly reference the FTC's guidelines in their affiliate terms.

Hidden risks for brands

While the FTC did fire off warnings to dozens of influencers last year and has engaged in some enforcement actions, the large volume of content published on sites like YouTube and Pinterest, combined with the fact that violations of the FTC's guidelines are so widespread, suggests that influencers and the brands they're publishing affiliate links for have little to be concerned about.

But the risks of not complying aren't limited to the possibility that the FTC will eventually crack down on violations and make examples of influencers and brands that assumed they were safe.

For brands specifically, there are other risks.

One is that lack of disclosure could actually hurt influencer affiliate campaigns. As Copyblogger's Brian Clark once pointed out, honest and confident disclosure can actually help sell. “If you're delivering value to your audience on a regular basis, they should have no problem with you being compensated for an occasional affiliate review or recommendation,” he opined. In fact, knowing that a purchase will help support the influencer might even encourage followers to make a purchase through an affiliate link.

Another risk is that absent disclosure, the relationship between influencers and the brands they put in front of their audiences isn't clear. Is the influencer endorsing the brand? Is the brand endorsing the influencer? This is a potential problem when influencers find themselves in trouble and the brands they've been associated with are at risk of becoming associated in some way with the trouble.

Playing by the rules is the right thing to do

Digital marketing is facing some of the biggest headwinds it has ever faced thanks in large part to players that either didn't follow the rules or, in the absence of clear rules, took liberties they probably shouldn't have.

One of the lessons being learned is that just because you can get away with it doesn't mean you should. When it comes to affiliate disclosures, brands have an opportunity to step up and help ensure that affiliate influencers are playing by the rules. Brands should take advantage of it while they can. 

Further reading:

Econsultancy training:

Patricio Robles

Published 3 April, 2018 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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