Jason Van Orden brought an issue about FTC rules as they apply to "affiliate marketing" to my attention today. He writes about an issue raised by Gary Ruskin of Commercial Alert with the FTC about buzz marketing and it's potential harms on children.
My gut reaction to the FTC's letter to Mr. Ruskin is that the FTC rules apply equally to affiliated marketing on internet sites as they would to a traditional sponsorship in an off-line world. This is consistent with all things in the world of "internet law". The laws are really not different just because we're on the internet. It's the application of traditional laws in the new media world that have not yet been tested in a court. Of course, that's cold comfort to many who are trailblazing in this field. (I digress...)
So, the crux of the FTC's letter is on page 4, where it states that "it would appear that the failure to disclose the relationship between the marketer and the consumer would be deceptive unless the relationship were otherwise clear from the context." That means what it says: be clear about who your relationships are with. A badge on your blog site reflecting the sponsorship or affiliation or a statement in the disclosures at the end of your podcast would make sense to me.
I think you'd need to go beyond a statement in the website terms of service, if not for the legality then for the sake of maintaining the trust of your readers. I think this way because, other than me (and perhaps lawyers like me), who reads terms of service documents? They are *very* important in my opinion, but the average reader will not click the link and go on to read it. So, if you're goal is to not hide the ball from your reader/listener, then burying the affiliations in your terms of service doesn't sound like the best practice to me.
Now, in the spirit of disclosures: I happen know Gary Ruskin, and I have supported Commercial Alert, the organization to whom the FTC's letter is addressed. I think Commercial Alert raises valid issues about commercialism and especially its impact on children. (Nobody has paid me to say that either!)
I will add this question about sponsorships and disclosures to my podcast's agenda. Hopefully I can address the question in a bit more depth there.
Update 12/14/06: Check out Paul Colligan's take on these questions on his affiliate marketing world 2.0 blog. He gets much more granular in how this issue plays out in practice, raising some good points that I hope to address in one of my upcoming podcasts.
(BTW, totally off point but rather annoying to me anyway, are the letter's examples on page 4: The individual in the example about a dishwashier is female and the person in the example about the cell phone speaker is male. It just smacks of traditional sexism to me. I can't remember the last time I or any of my female friends commented to anyone about how great their dishwasher is. Why can't authors of these sorts of documents just mix up the genders a bit... just throw me a bone every once in a while?)