The Affiliate Marketing Mistake That Could Get You Sued

So you want to post an affiliate link or share some sponsored content, you know, create a new stream of revenue, but every time you go to do it, you’re like, wait, am I allowed to post this in this way? Is there something I’m supposed to be doing to make sure it’s legally okay? If you could confidently share products and services that you use and love and then get credit for it aka affiliate marketing, you could be making money for things you’re already telling people about without any extra work on your part, which as a solo entrepreneur is so important. But that hesitation of, am I doing this right or is there some legal thing I need to know is keeping you from sharing, which is keeping you from making more revenue that you could be making easily in your business.

You don’t know what you don’t know about what the rules are, so it’s got you stuck. From micro influencers to seven figure creators, the legal lines around what you can and even must legally disclose are confusing. You’re not wrong about that. And the lawsuits being filed lately against creators prove it.

In this episode, we’re going to explore exactly how to share affiliate links and sponsored content in a safe way so you can create a new revenue stream in your business and confidently do so.

So as you’re well aware, people from everyday creators to influencers to people like house coaches, business coaches, everybody in between share things like affiliate links all the time where you know, you get a little kickback for giving somebody a link to hopefully a product or service that you like, that you use already.

There’s also sponsored content on the other hand where, maybe a brand like Kit, you know, pays you to create a podcast episode or they sponsor your weekly newsletter in exchange for a mention. There’s even the idea of sharing things that you receive for free, because once you start to grow your business, or if you’re a creator and maybe create some lifestyle content, brands might start sending you things and then people have the question of like, do I have to let people know, even if I didn’t get a kickback for it, but I just got the product for free?

Now, this stuff has been going on for years and years in the online business industry. People have been doing it both right and wrong, and by the end of this episode, you’ll have a much clearer idea on what exactly that is. It’s super easy.

But there were actually two recent lawsuits that brought this to my attention, and like that we’re going through a big shift when it comes to affiliate marketing in the online business space.

One of those lawsuits was actually brought against Alo, A LO, the the clothing company that makes athleisure and athletic wear, and the creators who were responsible for promoting Alo’s’ products online.

Now, I won’t bore you with a whole legal case breakdown of exactly what this Alo case is all about, but basically what you need to know is that this case that was again brought against Alo and the creators who shared the affiliate links is basically brought by everyday customers like me and you who were consuming this content, saying that the links were not properly disclosed, that the relationship between the creators and Alo was not properly disclosed.

What’s really important for you to know is that in some of these cases, with some of these creators. It’s not that they didn’t disclose it at all, it’s that they didn’t do it correctly. Right. This is also a really important legal lesson that you always hear me harping about, which is that people don’t have to be your customer necessarily. They can consume your content to sue you.

So if you share an affiliate link in your Instagram stories and someone clicks on that link and buys something from it, that puts you at legal liability, which is why you need to listen to this episode and why you need to learn by the end of this episode, how to properly share things like affiliate links and sponsor content.

From my perspective, there’s, there are a few things going on here, like of course, there’s always a lack of awareness when it comes to the legal stuff because it’s complicated and I get why a lot of times people just don’t want to learn it. It’s boring and you know, whatever. I also get that there’s just like maybe things are moving really quickly in their businesses, or people maybe think that no one will notice.

I think also that some people think that the rules don’t apply to them. Not in the sense that they think like they’re better than or above the law, but maybe more in the sense that. They will go unnoticed, like they’ll fly under the radar. Right. I also know from talking to, and I reached out to a couple of my friends who share a lot more sponsored content than someone like me who pretty much doesn’t share any of it. To ask them like, what are some of the considerations that you have when you are sharing sponsored content or when you’re going to create, um, a piece of content and have an affiliate link in it, like an email or, um, in your Instagram stories.

And they were telling me that there is a lot of pressure to tone down the labeling of sponsored content because when you label sponsored content a lot and like probably even as much as you legally need to, it doesn’t perform as well.

So there’s internal pressure from the content creator knowing if I do all this and then the content doesn’t perform, I’m not going to get sponsored again. And there may be even some external pressure from the companies themselves.

I think the point of this Alo lawsuit and there’s also one against Revolve clothing that is very similar. Um, but that also includes some like pricing change issues that are a little bit different and kind of beyond the scope of this episode. But I think that there a wake up call for all of us to remember that there are rules. And they do apply to us no matter how small your online business is or how big of a creator you are. So here’s what you need to know about it and what you need to do to stay protected online. This whole episode is going to help you.

I’ve always said like, this stuff is not optional. It’s an audit free for all out there. It’s not the wild, wild west. The bigger issue is that you just might not know what the rules are, and so you could be doing something accidentally wrong.

Now there are federal laws around this, which we’re going to go over in a second, and 99% of states in America actually have consumer protection laws around these topics too. So in this case, I think that affiliate disclosures are pretty well known. Like for the most part, I think most of you know, if you’re including a link to something and you’re getting a kickback, then you need to include some sort of affiliate disclosure.

But I still don’t think people know exactly how to do it. I know you and I know that you’re here because you’re like, no, no, no. I am a rule follower. I just need to know what the rule is. I’ve been a little confused, a little overwhelmed. Maybe you’ve stuck your head in the sand and you’ve been a little, I mean, you’ve got other stuff to do, right? You’re a little busy. This has actually kept you from moving forward in this area of your business? Well, luckily not anymore.

Alright, so let’s go over in part one of today’s episode, what the rule actually is from the federal government about how to share about sponsored content and affiliate disclosures.

So the rule from the FTC, the Federal Trade Commission, says something like this. If you endorse a product through social media, your endorsement message should make it obvious when you have a relationship, AKA, a material connection with the brand.

Now a material connection in this case includes a personal family or employment relationship, or a financial relationship such as the brand paying you or giving you free or discounted services or products.

Now, one of my friends asked me the other day, what if I do sponsor content for a brand? You know, maybe in a couple of YouTube videos or something like that. But in the future I talk about them elsewhere, maybe in a video that they didn’t sponsor. My thought as an attorney was actually that even in that case, you should disclose the fact that this is an ongoing partnership if you kind of have a rolling basis with this company, right?

So maybe they sponsored two videos last month, but you know that next month they’re sponsoring another one. Or you know that they’re sponsoring your newsletter or your podcast in the future. You have an ongoing relationship with them. I think that still counts. Now here’s a real kicker that even I was surprised to learn.

You’re even required to comply with this US law related to the, you know, letting people know that your product is endorsed and that you have this material connection. Even if you are located outside of the US, if you know that your post might reach people who are in the US. I thought that was super interesting.

So how do you properly disclose that a piece of content is sponsored by a brand? First of all, the government tells you that you have to make it hard to miss. They don’t love it when you just pop something at the bottom or after somebody has to click something to expand, like read more or see more. If you’re sharing a video, for example, it should be on the video, not just in the description.

Same goes for Instagram stories, so you should actually have a little label that says sponsor content or partner, you know, ConvertKit partner, or something like this that makes it really obvious that this is actually a sponsor piece of content. The government even goes so far as to tell you that if you’re doing a live video, like you’re live on Instagram or YouTube or Facebook, you should actually repeat it periodically, verbally in your video.

They also tell us that it’s helpful but not required to use a hashtag. So hashtag is not just enough to get you out of it, right? So you can’t just put hashtag add or hashtag sponsored and not be enough, especially if it’s a video. It has to be more obvious. Again, remember they said make it hard to miss.

So just adding a hashtag, like hashtag AD isn’t going to cut it. I like to sort of use the obvious plus hard to miss formula, so not just slapping the hashtag on there, maybe putting a little tag on the actual video itself. Putting it higher up in the caption, something like that. But I like a little one two punch situation.

Now, when it comes to things that are more like affiliate links, that’s where it’s really important to know that it’s all about the placement. So if you have an a link, for example, that you put in a newsletter, you can’t, at the bottom of your newsletter, just put like some of the links in this email are affiliate, or by clicking on the links in this email, you might be giving me affiliate money. Like you can’t do that. So it actually has to be located, like the actual location of the disclosure is important.

So if you include a link, for example, in a newsletter, I would literally put in her parentheses right after it, affiliate link. The government also encourages you to describe what that means to people, but here’s where I do think that that can go in the bottom of your email.

So if it were me and I had an email and it had some links to affiliate stuff, I would put affiliate link directly after the link, and then also maybe put an asterisk after each one of those parentheses. At the bottom of your email, that is where I think in with an asterisk, you could say, um, these affiliate links, when you click these affiliate links, I may receive a commission for the purchase of the product or service that I’m recommending here.

Um, you know, there’s always the ability to add language about if it’s true that the price of the item does not change based on them purchasing it through you versus going directly to the company. That’s actually the issue or one of the issues that happened in the Revolve clothing lawsuit that’s currently pending because the price actually did change if people clicked on the affiliate links and that was not disclosed.

So there’s a lot more I could say about affiliate links, but I really just wanna keep this simple and not overcomplicate it for you. That’s really what you need to do. You need to disclose when you’re using affiliate links. You need to disclose when things are sponsored. You need to make it obvious. Don’t make people work for it to go find it somewhere. Don’t use lingo like spon con or jargon or something like that where it’s like maybe your people, your other influencer friends or creator friends would know what you’re talking about, but your customer base wouldn’t.

So I asked earlier this week for questions on Instagram. If you don’t follow me on Instagram yet, head over and say hi @samvanderwielen. But I wanna answer some of your questions related to affiliate links and sponsored content. So this first person on Instagram asked, do I need to add a sponsored or Ad hashtag, even if I’ve added the partnership label?

That’s a really good question because I know that Instagram has added the ability. To have, you know, the partnership labeled directly on the content itself. So I think that that’s a perfect, like, that is a great like foundation. It’s really tough to say because the FTC says in, for example, if it’s a video that the disclosure should be on the video, not just in the description.

And I do feel like the way that instagram has it. It just, is that like a little thing on the top? I’d also be curious if once people click on your video, if that that label actually goes away. So then maybe I would have something that pops up really quickly at the beginning of the video and I would probably add something to the caption.

One of the ways that you can get around this from the caption where, you know, the government had said it’s not good enough just to add a hashtag like Ad at the end of your caption is that some people will start off a caption with hashtag Ad, um, or hashtag sponsored, um, or something like that. So you could do that and then use the label if you don’t wanna put it on the video, maybe that would work.

The next person submitted a question asking, do I need to disclose pro bono content? I often throw in extra content for a campaign when it feels natural to, because it’s not paid for. Is it still an ad? So here’s where my question is. If you’re already in a relationship with a brand where they are paying you for some stuff, but then you’re throwing in extra content because you want to keep that paid relationship going, then I do think that you need to disclose the fact that you’re a paid partner of this brand.

But maybe not that this, you know, you could also disclose that this particular piece of content is not, paid for by them, but that you do have an ongoing relationship with them. I think that’s where it’s important. Also, just to be clear, the government does require disclosure even when you receive product for free and you are required to give honest takes on that review.

So if you received a piece of like a, a product or a service or something like that and you hated it, it’s actually illegal to go on social media, for example, and say that you loved it just to try to get other people to buy it.

This person said, I guess I use a lot of Shopify or Amazon. How do you disclose those? Because it’s easier when it’s with a brand directly. You disclose it the same way. So if it’s an Amazon affiliate link or a link to like one of those, I don’t know, like closet things for clothes, I forget what they’re called. But if you’re using any of those, you disclosing them the same exact way that I’ve talked about throughout this episode.

I think that gives you enough info on affiliate disclosures and sponsored content. I wanna hear from you. Is there anything that I didn’t answer for you in today’s episode? Reach out to me. Let me know if you have any questions. I’ll also, just in general, I love hearing from you. If you listen to the podcast and you’ve never reached out to me before and you’re like, I listen all the time, why haven’t I ever said anything?

Please send me an email and let me know that you listened to the podcast. Let me know what you like about it. Let me know what you want to hear here. Send me a message on Instagram, not because I wanna hear your praise, but because I want to hear from you. I want this to be a conversation I created On Your Terms® to give you a podcast where you can learn easy to implement legal tips and marketing strategies that actually work, but take less time.

So I hope that that’s what you’re getting out of it, and I can’t wait to hear from you. I am especially talking to you. If you listen all the time, I know you because you send me emails sometimes and you’ll say, I’ve been listening and I’m binging, and I’ve never reached out to you. I don’t know why. So if that’s you, today’s your invite to send me a message, say hi, start a conversation, let me know if you like this episode. With that, I will chat with you next Monday. I can’t wait to talk with you soon. Life is serious enough. I think it’s important to poke some fun at yourself. So let’s hear how it really went behind the scenes filming this episode. One of those lawsuits was actually brought against Alo, a LO, the clothing company that makes like, you know, moving, moving.

You need to disclose when things are sponsored. You need to make it obvious. Don’t make people work for it to go find it somewhere. Don’t use lingo and jargon. Lingo. Lingo. Is that the word lingo? Hmm. That’s it.

Thanks so much for listening to the On Your Terms® podcast. Make sure to follow on Apple Podcasts, Spotify, or wherever you like to listen to podcasts. You can also check out all of our podcast episodes, show notes, links, and more at samvanderwielen.com/podcast. You can learn more about legally protecting your business and take my free legal workshop, Five Steps To Legally Protect and Grow Your Online Business at Samvanderwielen.com and to stay connected and follow along, follow me on Instagram at samvanderwielen and send me a DM to say hi.