DECLARING AFFILIATE MARKETING
Affiliate marketing, as we know, is no new thing: its patent dates back to 1989, and the first affiliate networks started to appear in 1998 with Commission Junction and Clickbank. Naturally, it’s progressed a little from the banner ad and coupon code beginnings; we’ve now seen how successful subnetworks created with influencers in mind have noticeably grown, shaped and repositioned affiliate marketing into the more modern channel it is today. However, with this success comes once again the natural need to regulate; we’ve written pieces on sponsored content declaration and disclosure, and given our thoughts on how influencers should best declare gifted product, but affiliate marketing has, for some time now, remained a fairly muddy area.
With the recent ASA clamp-down on sponsored content and hefty fines incurred by some brands incorrectly, or simply not at all, disclosing collaborations, we thought it only a matter of time until affiliate marketing was called into the spotlight.
As the ASA states: “affiliate marketing is advertising and therefore falls under the advertising rules”. With social media quickly becoming the most regulatory transparent advertising platform, the CAP Code now advises on how to declare with full explanation on brand and influencer accountability. That said, we’re not entirely convinced by some of their suggestions, so have also included our advice for affiliate best practice to help you navigate the waters.
So, What is Affiliate Marketing?
This is a question that judging by some popular forum-based sites not everyone knows the answer to, yet still comments on. As previously explained, the concept of generating a form of weblink with a “tag” in it that allows a “merchant” (e.g. a brand or retailer) to see that a publisher (e.g. a website or blog) has generated them a sale on activity and pay them a small percentage of commission for the sale has been around since the late 1990s. Originally it was more based around publishers uploading a display advert to their site and the merchant paying them in return for the number of views and clicks to site. However, this is now considered quite an outdated concept (although the majority of all online magazines still do this without declaring to the consumer that by clicking on it they potentially earn revenue).
As the internet (and usage) improved other concepts were introduced. The approach that really boosted the affiliate industry was the launch of cashback sites; e.g. Money Supermarket and VoucherCloud. These websites make the majority of their money from affiliate links, without proportional complaint when you consider the amount that influencers get criticised. The same goes for insurance recommendation and flight comparison sites, amongst many other others. As an offline comparison, consider that the majority of service-offering jobs include commission on sales made, such as travel or estate agents, as well as performance-based bonuses in retail jobs.
When influencers arrived on the scene at first no one, including affiliate marketeers, knew where to place them. Early adopters joined Skimlinks (a website that highlights key words in a chunk of text, identifying those it deems the most critical and adding in an affiliate link automatically (e.g. try out these red shoes). Linkshare (now Rakuten) and others started to allow influencers to sign up to their platform, which in turn allowed influencers to apply for individual brand programs (which the brands approved on a one-to-one basis). Once validated, influencers could post display advertising and create links to those sites. The usual commission is around 4%, although it can rise to up to 15% (often this is not quite as It seems, read an article here to explain) though this is very unusual. At no time were influencers told they needed to declare these collaborations, and neither were online magazines, newspapers or voucher sites. For example, the Daily Mail’s TV/Showbiz section has a “Fashion Finder” tool with content all created using affiliate links which is rumoured to generate over £80,000 per day in commission.
When rewardStyle turned up on the scene (almost seven years ago from the present day) the problem escalated. As the first affiliate platform to focus on the needs of the influencer, its technology and UX (user experience) blew all other affiliate networks out of the water. Creating links was now possible from your mobile phone, with immediate access to link creation for all of the brands signed up to the platform, rather than the one-to-one approval. This means that brands often don’t know and can no longer control who talks about them. In addition, you could monetize Instagram content (now housed within LIKEtoKNOW.it) and create purpose built widgets for your blog that looked beautiful within your content. What rewardStyle didn’t do was suggest that influencers include a declaration that they are earning money. Their thorough and regular advice to influencers rarely recommends that declaration is a good idea – be it a moral or legal obligation.
Influencers are largely left to make up their own minds and although there have been recommendations from the ASA on their own website for a while, they are incredibly outdated, out-of-touch and crucially not written by somebody in any way experienced in dealing with influencer marketing (in our opinion). For example, the suggestion that the brand is liable to a fine when an influencer posts an affiliate link to their website is completely unreasonable – as the brand (if working through rewardStyle) has no control over who posts links, and when. Without proper investigation of the methods of the hosting networks, we feel regulation is largely impossible.
Is it Advertising?
The reason for the majority of push back to the ASA’s suggestions is that the regulator considers affiliate marketing to be “advertising”. However, if you look up the definition of the word you can instantly see the differences between an affiliate link and a paid collaboration:
Advertising is an audio or visual form of marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service or idea. Sponsors of advertising are typically businesses wishing to promote their products or services. Advertising is differentiated from public relations in that an advertiser pays for and has control over the message.
Firstly, as explained previously, the “advertiser” (in this sense: the website being linked to) often has no control as they aren’t aware the link has been created and is being used by an influencer. Secondly, the idea that the influencer promotes it in a “non personal” way is up for debate. Many would argue that the difference between influencers/creators and magazines or news titles is that they are independent individuals who can choose to recommended/not recommend as they please. Lastly the use of the word “employs” implies prior communication and some form of written agreement or contract, which is rarely when an influencer chooses to create a link through an affiliate platform.
Affiliate Links within Blogs and Twitter
As is the case with declaration of sponsored campaigns, there are different guidelines dependent on the way affiliate links are used within content. For example, rules for “written” content (unclear, but presumably a blog or website instead of a social media platform) declaring your use of affiliate links at the bottom of a post (or not at all) isn’t enough anymore, even if writing “small print” is satisfactory for a host of other regulatory standards within the industry. In the eyes of the CAP code it is considered insufficient because there is potential that the links and any directly connected claims would not be considered obviously identifiable as “advertising” at the time they are encountered by the reader. This print needs to be “easily visible” and identifiable before your audience “encounters” these links, which will be difficult for most to incorporate into their content style.
If your entire blog post has affiliate links (or more affiliate links, than not) disclosing with an identifier such as “Affiliate links are used in this post” or “I use affiliate links throughout this blog post” or a “recognisable icon” which immediately notifies your audience of the affiliate advertising before the post is the recommendation. Where only some of the links are for affiliated product, the whole post needn’t be declared as above, but each affiliate link or any related content must be disclosed individually or within the section where used. We suggest using an asterisk next to all affiliate links and explaining this to your readers before they reach the first affected link.
On text-based platforms such as Twitter “labelling the content with ‘Affiliate’ or similar is likely to be the clearest way of identifying it as advertising”. Our suggestion would be to use an icon to disclose on platforms with limited word count and include the use of affiliate links with these in your bio. We can’t afford to be wasting nine characters now, can we?
* or Affiliate if you can spare the characters, with an explanation of this in your bio.
As we said before, the CAP code recommendations are lengthy and in a dream scenario they’d also like you to incorporate a further clarification: “In addition, although not a requirement, affiliate marketers may choose to state within the post that they receive a small share of sales through the link(s).” Remember, your audience doesn’t necessarily have the same knowledge as you, particularly when it comes to the technical side of the industry, so a little clarification on affiliate links wouldn’t go amiss. In disagreement with the guidelines, we don’t think this is necessary for every post with affiliate links, but just make sure it’s on your website and easily found as a “How I Work” page. It’s best to be honest and open with your audience so that they are never left wondering if you have earned money when they have bought something as a result of engaging with your content.
Pictorial Rules; Instagram, Pinterest and “Image First” Content
For pictorial content where an image is presented first (Instagram, Pinterest, etc.) the CAP Code advises “it is likely that an identifier like ‘Ad’ should be included on the image itself so that the nature of the content is clear before consumers engage with the post by clicking on the image.” We’re all for properly disclosing, but placing this on the image itself to us is somewhat creatively destructive. We won’t expect print advertising to be adding watermarks across billboards or ad declaration banners in magazines any time soon so we don’t think this is the perfect solution. Also, looking at the meaning of the word “advertising”, this scenario is not a two-party agreement, but a one-sided decision by an influencer to create a link. Therefore it is not an advertising partnership and arguably only requires a moral obligation to tell your followers that you may earn some money if they choose to buy an item via your link.
Affiliate links aren’t yet able to be integrated on Instagram still images, so this is one regulation that’s just applicable to stories. For those asking, shoppable Instagram posts are currently only available to brands who have their own SKU (product) lists that can be technically implemented in the same way they would be for retargeted advertising and display adverts. If and when Instagram introduces shoppable links onto the images of influencer accounts like they have done so for brand accounts, we naturally expect there to be an appropriate update on affiliate declaration in this context although we’d also expect the responsibility to fall to Instagram to update their users that this is an affiliate marketing method. The “#affiliate” labels seem to be the new marker and we think that this is readily identifiable as a message to your audience that an advert is present. But again, we do feel that it’s verging on crowding out the content focus.
Brands listen up. The Advertising Standards Authority has ruled that both the business and affiliate marketeers are responsible for meeting advertising rules; just because your affiliates are in control of their own content, you are currently still in-part responsible for ensuring that the advertising is compliant with the CAP Code. Whilst we appreciate this is a minefield to manage, it also raises the question of the networks you host your platform on as you need to be fully aware of exactly who has access to make affiliate links to your website. The code reads:
This includes content on a publisher or affiliate’s own website and social media if it is directly connected to the supply of transfer of goods, services, opportunities and gifts – web banners, targeted ads, content embedded with affiliate links etc.
There are a few examples of this online, but in essence, if an affiliate creates an advertisement for you, from which you benefit each time a user clicks on it, you’re accountable. If the claims are false or the ads misleading, this will be in-part traced back to you. This also goes for the targeting of affiliate ads. Though the technical side of targeting falls into the affiliate publisher’s hands, incorrect promotion of your product to the wrong audience will hold you as a brand to account. What that means is you need to be on top of the way your affiliates are advertising for you, making sure you know the type of content and to whom it’s being advertised. Ultimately, it’s your website at the end of each click and so you have to answer if an ad falls short.
We’ll be entirely honest with you here when we say we don’t think this affiliate update by the ASA and the CAP Code fully cuts the mustard. Also, having seen a multitude of emails sent to influencers (as a result of complaints made to the ASA for poor declaration) we are guessing they are aware that they know these suggestions are watertight as they are positioned as “suggestions” and “recommendations” rather than including any forcible language or implying any ramifications for not adapting to their guidelines. We also think the ASA’s method to open the flood gates to consumer complaints, and deal with making case by case changes rather than looking at the sector as a whole and acknowledging the pitfalls is a real shame. Throughout their entire guidelines (note: not law, but guidelines) they suggest using an identifier such as “Ad” and we can’t help but feel this is a step backwards in the realm of content declaration. These regulatory bodies have worked hard to clarify the meaning of terms such as Ad and Spon (etc.), and we think that including this within the intricacies of affiliate marketing, only serves to grey an area which was starting to look a little clearer.
Secondly, these are just guidelines, not set in stone and certainly not perfect. Consumers have been quick to deem content “illegal” which quite frankly is incorrect and borderline fanciful. As an agency, we’re currently in consultancy discussions with the ASA, in particular around the lack of concise and available information regarding this. It’s safe to say that with the tightening of the rules and regulations, no one is particularly eager to break them; in fact, we’ve seen a surge in declaration through the use of #gifted and influencers even going to the extent of declaring when something isn’t an ad. We want to know how to do it correctly, for all parties – brand, influencer, consumer – involved.
That said, the most important thing is to be honest and open with your audience. Whilst regulatory guidelines may be unclear, moral obligations are not – misleading and tricking your following can case unrepairable damage to your reputation in the space. Ultimately, they’ve chosen to engage with you, ads or no ads, and it’s essential to put them first both as followers and consumers. As audiences are gradually coming round to the appearance of #ad in their feeds, now is the time for declaration and disclosure to be done properly, bringing transparency across the networks and paving the way for appropriate advertising disclosure in other forms of media.