I’ve mentioned this FTC regulation change in passing and have promised to blog about it. This is such a big and intricate topic that I’ve decided to break it into two parts – Part 1 is the “WHY” and Part 2 will be the “HOW”.

I’m still working to figure it myself – what it means to me as a blogger and as a business with an affiliate program – and what I will do to stay in compliance, thereby avoiding the $11,000 fines. (Ouch! That would hurt! This is important!)

It is interesting that this issue has become a legal requirement – it is one I discussed with Andrew Darlow very early on in my online career.  We talked about the need for people to know where business relationships existed and how to get that message across.

The new FTC regulations are quite the hot-bed of debate and emotion among bloggers and online business people – let me assure you. More than a few conversations swung to this at BlogWorld last month – as it directly impacts anyone with a blog.  I’m sure traditional businesses are figuring it out too since many of them have affiliate programs or provide free products for review and use to more than one online resource.

Obviously, I don’t work for the FTC and did not create these regulations. I can only give you my opinions and interpretations and point you in the direction of more information, opinions and interpretations.  I can, however, offer you access to the 81 page guidelines if you care to wade through the original document.  I’ll start with that => CLICK HERE FOR THE FTC GUIDELINES

Now I’ll begin my opinions and interpretations…

To me, the regulations speak to ‘transparency’ – one of the buzz words of the election last year and business these days.  I’m a big fan of transparency myself and don’t believe in hiding who I am, what I believe in and any relationships I might have with others.

When you watch tv and see an advertisement, you know the company created it to tell you about their product and influence you to buy it.  If a celebrity happens to be in the ad, you know they are being paid to endorse the product.  Everyone gets that, right?

Now let’s turn off the tv and turn on the computer. Things get a little more confusing.  Say, for example, you are on CNN.com. I think the average person would know that the tv screens across the top and the “PC” and “MAC” guys talking about why a Mac is better, is an advertisement.  The website is related to a tv station people know, and it looks like an ad.  Right? (btw – this blog post is in no way approved or endorsed by CNN and if they ask me, I’ll take this example off, but hey, it’s free advertising for them and I don’t feel I’m doing any harm to their brand so hopefully it will be ok!)

Now let’s look at a blog. I’ll use mine as an example… because I have links titled “Product Offerings” and you know they are eBooks and products that I have created, you know they are basically my ads and that I am selling something and will receive a benefit if you purchase.

So I think the average person would still be clear about the relationship between the medium (tv, website, blog) and the ad.

Let’s go to the next level – take a “widget” ad. Again I’ll use my blog as the example.  Further down on the side bar is an ad for Adobe products.  But do you realize it is an ad and that if you click it, I will earn a commission?  Some people do, others don’t.  Put this type of banner ads on ‘resources’ pages and it can get even more fuzzy.

Now we’re digging down to the area that the FTC is most concerned about. (Again, my opinion.)

Look at blog content. I’m talking about the actual post – the words, paragraphs and text typed in an entry.  I’ll use one of my blog posts as an example.  I really like Alyson Stanfield’s book, “I’d Rather be in the Studio!”  I have blogged about it and told you why I like it and what value I see in it for artists.  The post was titled – Here is my one complaint about Alyson Stanfield’s book – “I’d rather be in the studio!” – now I’m out of excuses! I just went back and read the post again and see that no where in it, did I tell you that if you clicked the links and bought the book, I would get paid a commission.  BINGO! This is what the regulation is all about.

The issue is that people who aren’t online for business, may be unduly influenced by what they read in a blog post – believing that it is an unbiased opinion or endorsement.  (I think I have been in the habit of saying when I’m NOT compensated but not always that I am – I apologize if you are upset by that.)  You know an advertisement when you see it and make your decision knowing they want to influence you.  These new disclosures are to help people do the same thing online.

If I write about the book again, I will be required to add a disclosure saying that I receive compensation if you make a purchase. One of the tricky things is HOW to do that without ruining the flow and feel of a blog.

So why are people upset? This seems to be for the greater good, right?  Well, I’m sure there are many reasons people are upset.  Here are a few I have heard…

• I only recommend things I believe in so I don’t see why I have to take this extra step. I’m sure this is a true statement for many, I know it is for me, but it isn’t for everyone.  Some people will recommend anything that will make them money regardless of what the product is.  (Remember those people that used to roam the countryside selling snake oil?  They are now online!)

•  It will be a hassle to implement. Yup. I’ve been thinking about how to streamline the process so it is consistent both for me and for my readers.

• It will be a hassle as an affiliate manager. How can I be sure my affiliates comply?  There seems to be some gray area about whether companies providing affiliate opportunities could be help responsible if their affiliates don’t follow the rules.  I surely don’t want to be held responsible and will be communicating with my affiliate shortly!

The unspoken fear, I assume, is that disclosure will affect the bottom line. Many people make a living as bloggers.  You might wonder how and why so many people put so much free information on the internet.  Sometimes it is purely philanthropic. I know bloggers who refuse to become affiliates even if they recommend products, because they never want their intentions questioned, and they have adequate sources of income from other avenues.

But people have bills to pay somehow.  I know I do! And many choose blogging as their source of income.

I blog because I enjoy writing, I enjoy sharing and also because it lets you get to know me and the information I have.  That could lead you to buy one of my products or hire me as a coach.  Purchases are what makes me able to spend time writing blog posts and doing free calls instead of painting a new collection to license.  It is all a balance but at the end of the month, my bank wants me to pay the mortgage!

There are bloggers who create great content but don’t create products like I do.  They rely solely on the ability to build an audience an advertiser wants to reach.  They then ad paid advertisements or affiliate links to the site that can benefit their readers.  They may receive some free products as well in exchange for access to their audience.  Overall, it’s a great thing and a win-win.  The public gets great information, often for free, and the creator (or blogger) gets to pay the bills.

That concludes my understanding of WHY these guidelines have come to pass.  Stay tuned for HOW I plan to comply with them and how you can too.

In the meantime, here’s to your creative success!

– Tara