New FTC guidelines were just released that affect online marketers, especially in the direct marketing industry.
To enlighten you, I’m posting an article sent to me by Direct Marketing icon and Internet Marketing expert, Marlon Sanders.
I’m also including links to other blogs where this is being discussed including a post where an FTC rep has answered some questions directly. If I discover more pertinent information on this topic, I’ll update this post.
Feel free to hit the Comments link to leave your response.
Before you read anything, a disclaimer.. neither of us are lawyers and are not providing legal advice in this post. Do you own diligence if you’re seeking legal advice. What you will find is a translation and opinions:
“Should you freak out over the new FTC guidelines?”
by Marlon Sanders
Let’s talk about the latest FTC guidelines and how you should respond?
You’re going to be seeing lots of web sites and ads that say “The average person made .01 cents,” or $1.00 or other such ridiculous numbers.
Let’s talk about WHY this is and what you should understand about it. There’s a bit of sane thinking in this ezine, or I think there is.
So you might wanna read it.
The FTC published new guidelines about income claims and affiliate links.
Here’s a great link to an interview with Richard Cleland of the FTC from Fast Company: http://www.fastcompany.com/blog/jennifer-vilaga/slipstream/ftc-bloggers-its-not-medium-its-message-0
Since I ain’t no lawyer, you better learn about this stuff yourself. But let me give you a marketer’s perspective.
I in NO WAY am criticizing the law. I’m just stating a marketer’s viewpoint and explaining things you’re doing to see happen on marketer’s web pages, so you understand WHY you’re going to see these things.
A lot of what I say below is intentionally MELODRAMATIC and tongue in cheek. But there is a real law and real penalties. So understand that while I’m making a bit of light of it, there IS a real point here you need totake seriously.
Let’s drill down.
1. Typicality of results
If you use testimonials or endorsements that make a specific claim, you ALSO have to reveal the results the average user gets.
So if you read in one of my letters and endorsement or testimonial that says Johnny or Betty used one of my products and paid for a new house with it, you’ll ALSO be seeing a disclaimer that says:
“The average person who bought this product made .01 cents.”
I may be exaggerating but that is roughly what you’ll be reading quite a bit.
Now, you and I BOTH know (or you should know) that the average person buys stuff and doesn’t do a lot with it. Or if you don’t know that or haven’t heard it, it is the truth.
Then again, the average person reads two books a year, can’t spell the word Potato, thinks UFO’s exist, and doesn’t vote in elections.
So unless YOU are average, this shouldn’t be of great concern to you. Now granted, I had to look up the spelling of potato in Wikipedia. But at LEAST I’m bright enough to do that.
A lot of people aren’t.
HOWEVER — having said that, about three weeks ago, I published an article FORESEEING what has gone down. I published an article that said basically 95% of people don’t do squat at Internet marketing.
That statement a few disillusioned souls to refund to my office.
So let me break this down for you again at the risk of having other pie-in-sky dreamers freak out over it.
Here’s what you’re going to see:
Marketers WILL have statements in their sales materials that reveal the average results are PATHETIC.
Does THAT mean the methods don’t work?
What it means is people don’t work the methods. I speak the truth.
a. Very few people read more than five chapters of those books, ebooks and courses they buy. I know this because I’ve put tracking links in products and I can tell how deep people read into the product.
So HOW pray tell are the average results going to be good when, on average, NO ONE even READS the product?
Should the fact that you’re competing against people who can’t and don’t read ALARM you? Or should it KINDA make you excited to know that you’re competing against people who buy stuff and never even read it?
b. Out of the people who DO read, there are many reasons people buy products.
A LOT of people, maybe even the majority, buy out of curiosity or to do research. They don’t INTEND on acting on the information.
I do this ALL the time.
I’m a curious person. I buy stuff all the time out of curiosity with zero intention of doing anything with it.
Does that INVALIDATE the information I’m reading and mean it doesn’t work because a whole lot of people are just like me and reading for enjoyment, research or curiosity?
c. Do you really believe you’re an average person?
Personally, I don’t like the attitude that everything should be boiled down to the lowest common denominator and we should protect people who can’t read, can’t spell (or at LEAST look it up in Wikipedia) and believe stupid stuff like they can push a button and buy a yacht the next week.
One way or the other, evolution will eventually weed those people out. Just not in OUR lifetime.
I like to think that God don’t make junk and that I got a little something going for me. And I would hope you do also.
d. Decreased competition is GOOD.
This law will weed out some competitors who just don’t want to reveal that the people who buy their deal on average don’t do squat.
This is good.
It’s the law of supply and demand. Less supply means more of the pie for the rest of us. Seriously, this law isn’t the end of the world.
I’ve complied with MOST of it all my career or done my best to. Much or most of this law has been in place for a long time. People are just now realizing what the law says.
My take is, you don’t freak out. You just comply. Ain’t no big thang. But when you see some disclaimers that sound outlandish, you DO need to understand WHY they are there and the purpose and intent of them to protect new, uninformed people from making bad decisions.
I HAVE seen people who ARE sincere believe extreme hype and spend money they didn’t have.
Law one: Do NOT spend money you don’t have to chase an uncertain result. Scared money never wins. You build a business with money you can afford to lose.
Law two: There is no simple, easy, no-brainer thing you can do that will bring you in 6 g’s a month. Everything in business requires a brain and thinking.
Law three: People who are an overnight success were either lucky, inordinately talented or spent a long time preparing for that big moment of success.
Law four: There is no magic ebook or course you can buy that in 30 days or even 60 is going to allow you to pay off those huge credit card bills or buy you a Lambo. So stop asking for it and looking for it.
You GROW a business over time, not overnight. Relationships with customers take some time to build. And some people like my friends Lee McIntyre and Jason Fladlien DO extremely well really fast. But yeah, that ain’t average.
It took me a lot longer.
Is This A Hidden Flaw In The Law?
Now, lest you think this is all rosy, there IS a hidden flaw in the law.
Here it is:
What the law SHOULD say is that you have to publish the average results of people who reasonably followed what you taught.
This does NOT mean you skirt the law. I’m just saying here is why I think it’s misguided. Now, I’m NOT blaming the FTC on this. They are trying to protect people.
I understand that and it’s a noble cause. They have the right to make and enforce the law and it’s our job to comply fully and completely.
But let me give you an example from a marketer’s perspective:
The AVERAGE person who buys a beginner’s book on how to play the guitar WON’T ever play more than maybe one chord.
They read chapter one, and go back to playing video games, eating bon bons on the sofa or reading the National Enquirer.
I’m NOT making this up. This is actually true. But what’s wrong with that? I have all kinds of books on all kinds of topics I bought for one reason or the other and never did anything with.
Like this book over here on my bookshelf on how to design a database. Like I ever read that! I mean, it sounded like a good idea at the time!
I doubt I made it through one chapter. No big deal. And on rare occasion I eat bon bons and read the National Enquirer. So there you go.
Here’s what the law SHOULD say through the eyes of a marketer:
What is the average result by the person who actually follows the majority, if not all, of the instructions?
Of course, there are so few of those people, it wouldn’t make for a very good law. That would expose how ridiculous it is.
For example, how many people READ the Bible cover-to-cover or even the New Testament?
How about even one whole chapter?
And how many of those people can even QUOTE what the 10 commandments are not to mention even take a stab at following them?
The obvious example here is the people who buy something off of a TV commercial that helps them drop 10 pounds.
Whatever “it” is comes with a little manual that says in addition to using whatever the tool is, you ALSO have to STOP stuffing your pretty little face with pizza, beer, tacos, nachos, pie, cake and candy, not to mention those piggie blanket things down at the mall I like to chow down on.
Of course, about .00001% of the people actually do that.
So we all KNOW what the average results are.
Does that mean whatever was sold doesn’t work?
It’s like Jared on those Subway commercials. By the way, I think Subway is a trademark. I probably am supposed to say that.
Can you imagine the commercials when they say THIS?
“While Jared dumbped 108 pounds, (or however many it was) the average Subway customer actually GAINS 25 pounds in a period of 5 years because in addition to eating subs, they ALSO on average consume 512 pizzas, 398 bottles of beer, 498 pieces of candy, 109 servings of cake or pie and 598 bon bons, not to mention soft drinks and other assorted goodies.”
Americans, on average, are considerably overweight. Eating at Subway ain’t gonna change that as long people continue to pig
down on other stuff.
Is THAT Subway’s fault?
So I ate at Subway this week. I also bought a full pumpkin pie and chowed down on it (albeit a little guiltily). I had some pizza and ice cream.
So on net I think I gained 1 or 2 pounds this week. None of that is Subway’s fault. By the way, this example if HYPOTHETICAL. Maybe Subway customers lose tons. I don’t know.
It’s an example or illustration that’s pure fantasy in my head and NOT representative of true, real Subway customers.
Here’s my POINT:
Isn’t the real question what happens in that rare event when someone actually FOLLOWS instructions?
I think that my results would look pretty decent if you looked at what happens when people act on what I teach. Like on my Dashboards.
For the people who actually go through all the steps on an icon, I imagine most people get a good result on that ICON. Thing is, they don’t go through all the icons. And that’s the fly in the ointment as far as average results are concerned.
Here’s an Example
About 3 weeks ago I published a drop dead ezine issue with extreme specifics on how to do an outline in freemind and record it using software that also is gratus.
Out of roughly 50,000 people who got my ezine issue, THREE PEOPLE did anything with it.
What percentage is that?
My math is crap (cause I’m “average” at math). But I think that is .006% average results.
If you’re one of those 3 people, congratulations.
You’re the anomaly.
The weird, rare person with an ounce of entrepreneurial ability and instinct and the capacity to take action.
People worry about competition.
Look at it this way. For every 50,000 potential competitors, about 3 of them will ever do jack.
This is what average is.
If you’re one of the other 49,997 who didn’t do jack, it’s OK. You’re AVERAGE! It’s normal to not do anything.
It’s OK that you read my ezines for either inspiration, or for ideas, or for use in the future.
A lot of people read this ezine just in case they DO decide to do something in the future. It’s all good. Nothing wrong with that. Fact is, I’d say that’s most people.
I do the SAME exact thing.
I subscribe to, buy and store information of all sorts from all kinds of resources.
An Example From My Family
A long time ago when my dad who is 80+ now was a young buck, he took a correspondence course to learn how to fix Television sets, which
were the hot new technology on the block.
I’m assuming the company sold a lot of those 3-year correspondence courses.
My dad finished the course and they flew him in at their expense to a graduation with two other people. That’s right.
Two others finished the course that year! Three total.
My dad went on to do very well in the TV service business and at one point serviced the TV sets for virtually every hotel and motel in in the city we grew up.
And that was his part time job.
The correspondence course was a GREAT course. It worked. It allowed my dad to accumulate substantial assets and support my family over
the course of his lifetime.
Yet the average person who took that course NEVER made even one DIME because they never FINISHED it.
That’s the fly in the ointment with this law.
You know that book “How to Win Friends and Influence People” by Dale Carnegie?
On AVERAGE I dare say people who buy that book do NOT Win Friends or Influence people. Why? Because it says stuff like you have to smile
at people and consider their point of view and listen.
How many people who buy that book REALLY do it? Seriously. How many people do you know who listen, always consider the other person’s
point of view and who do all the other stuff the book teaches?
Not me! That’s for sure. And probably hardly anyone I know.
Ain’t Dale Carnegie’s fault I like to talk more than I listen, criticize others, and consider my own point of view first.
2. Revealing affiliate links
This one is more vague. But the FTC says that, more or less, you need to be transparent about this relationship.
You tell people it’s an affiliate link or you make a commission. Whatever.
I don’t think this amounts to diddly squat. Just do it.
Here’s my affiliate link: blah, blah, blah.
Or: Affiliate link: blah, blah, blah.
Ain’t no big thang. I’m not sure exactly how you have to reveal them or what’s required. I BELIEVE you just have to state that they’re affiliate links. That’s how I read the law.
“OMG! I clicked a link, bought and someone snagged a few bux in their bank account because of it. The world is coming to an end!”
Personally, I make an ATTEMPT to buy via affiliate links because I want to SUPPORT the people who give me ideas and turn me onto cool stuff. But maybe that’s just me.
I reckon lots of average folks out there believe that the people who take time to write elaborate reviews on blogs with nice graphic design and perty pictures ‘n stuff are just altruistic human beings and doing it without making one penny if they click their little link their, whip out their credit card and punch in the numbers.
So in the spirit of full disclosure, get this NOW! ALL links to ANY product in my ezines or products that are NOT my own ARE affiliate links.
That means, if you click and pull out your credit card and enter those little numbers on it and push SUBMIT that money is going to appear in my bank account.
If you have a problem with that, then do NOT enter your credit card numbers now, quickly and easily and do NOT push submit. Not NOW. Please. Thank you very much.
If you have been deceived into thinking I’m a charity and I do this out of the goodness of my human heart just because I ain’t got nothing else to do with my time, then let me clarify this for you right this second.
You click. You buy. I profit.
How ’bout them bananas?
The Final Disclaimer
In the words of Frank freaking Kern, I ain’t a lawyer nor do I play one on TV.
That means you’re well advised to go read the little law yourself, consult your own legal advice, and, in general, use that little thingy God put in your head called a BRAIN.
Now that’s a pretty novel concept for a lot of us, myself included. And I DO expect that at least 3 people who read this ezine will do it.
Still, I gotta say that just cause I’m supposed to and it makes me sleep better at night.
What You DO Need To Do
As I read the law, here’s the scoop:
1. If you publish testimonials or endorsements that aren’t typical of average results, you need to reveal what those average results actually are, as pathetic and pitiful as they probably are or will be.
2. If you make claims or promises in your letter, as anyone selling anything does if they hope to make any sale before Christmas, then you need to state what the average results.
I’m not certain the law requires this but I believe it does.
Again, you and I both know that in ANY how to product, the average results will be absolutely pathetic. Just embarrasing. So live with it.
Comply with the law. There is no choice about this.
Personally, I’ll probably state that my average earnings from my buyers are .01 each unless I can get provable stats that show otherwise.
Since thousands of my email addresses from thousands of customers in dozens of countries are no longer valid, getting stats OTHER than that won’t be easy.
So when you see those average earnings from myself and other marketers, understand why they are there and what they MEAN.
Oh, if I send you a survey about this, please take it and return it.
You can also publish testimonials that are fluffy without specific results. Like “OMG, Marlon is so smart!”
Personally, I like to print out and read those testimonials anyway. I try to get other people to let me read them to them but you know…that doesn’t go down so well.
3. Consider publishing a separate web page for non-U.S. customers
I’m NOT sure about this one yet. But I THINK you will legally be able to serve up a different page to non-U.S. customers.
4. If you use affiliate links, reveal they’re an affiliate link.
Like honestly, who except the rawest newbie doesn’t know this in our industry.
So revealing it won’t make a dime’s worth of difference in your sales.
This is NOT the end of the world.
People will STILL buy from you if they are educated about the law in the U.S.
Average results suck but hopefully YOU aren’t average.
And if you are, join the crowd.
Oh, and read the law yourself since I ain’t no lawyer nor attorney. I’m just an online marketer who likes to sell stuff. I may be wrong as the day is long on all aspects of this law and my opinions.
So use your noodle to get the boodle and do a bit of your own sound thinking and research.
The King of Step-By-Step Internet Marketing and “The Ambassador of Old School Marketing”
P.S. In the spirit of complete compliance, here is my new disclaimer:
Ain’t NONE of the results in NONE of the web pages below anything remotely resembling AVERAGE nor typical.” People who succeed at stuff possess superhuman, freakish ability and you should NOT assume you fall in that elite class of superhumans. You’ ain’t never gonna amount to nothing so just give it up. That’s my disclaimer. My average buyer earns .01. And if you work really hard, read well and follow all the instructions you too can end up in this elite class.
Marlon Sanders is the author of “The Amazing Formula That Sells Products Like Crazy” for approximately .00001% of the people who buy the product and the KING of Step-By-Step Internet Marketing for those 3 people out of 50,000 who can actually follow steps. Everybody else is basically screwed with no hope of being anything but average — EVER!”
Updated Nov 28, 2009 – Free webinar interview with FTC rep with Jim Edwards:
You may also want to read Chris Rempel’s post on his blog for another viewpoint:
Joel Comm’s attorney weigh in on his interpretation and makes suggestions for affiliates and merchants/product owners.
Frank Kern’s Blog
Here’s some insight from Internet Marketers Andrew X and Steven Lee Jones that I received in my inbox and found useful. You may find it useful too…
As you may of heard the FTC has released some new guidelines which
will affect all affiliates working online.
We got many questions about this recent change so we decided to
give you all the facts and answer all your questions in this
What’s the short version of what the FTC changes are?
The U.S. Federal Trade Commission released their new guidelines on
10/05/2009. You’ll find the complete guidelines at
It’s a long read, so let’s see if we can summarize the main points
for you quickly:
1) If you have a relationship with someone whose product you’re
endorsing (which also means promoting), you must disclose that
relationship. That means you have to say explicitly if you got a
free copy of the product and/or any payment for your endorsement.
2) If you use testimonials to sell a product (yours or someone
else’s), you can’t use testimonials that give specific results
without also telling readers/viewers what the typical results are.
They’ll fine you $11,000 per violation.
There are more details in the guidelines, which we strongly
recommend that you read, but those are the key points. And by the
way, we’re not lawyers, so by all means get true legal advice from
a lawyer as you’re figuring out how you’ll respond to the new
Frankly, some parts of the new guidelines are vague. The FTC says
they did that somewhat on purpose, and they’ll handle things on a
case by case basis.
That makes it more difficult to know how to comply in certain
situations, because it’s hard to figure out how the guidelines
apply, but that’s the way it is.
That means there are plenty of unresolved questions, too…and we
won’t know the answers until the FTC starts enforcing the
The FTC has said that the guidelines are really meant to clarify
things for bloggers and for corporations, but it’s easy to see how
they could go after just about any marketer due to the vague
When do the new rules take effect?
They go into effect on December 01, 2009.
They were approved by a unanimous vote (4-0), so there’s no chance
they won’t go into effect on the scheduled date. This is just
something we’ll all have to live with, whether we like it or not.
What about for marketers with businesses outside the U.S.?
If you’re outside the U.S. and you’re not selling to people inside
the U.S., you’re not affected at all.
But really, how many web businesses never sell to people in the
U.S.? Not many. It’s safer to assume that folks in the States will
buy your stuff, and that you should follow the FTC guidelines.
What does this mean for testimonials on a sales page?
We know you’ve seen testimonials on sales pages that say things
like, “I made $14,576 in 20 minutes with just the tip on page
12!!!” Those are likely to disappear.
It used to be perfectly acceptable to cherry-pick great results
like that and cover yourself with a simple disclaimer like this:
“These results aren’t typical.” Not anymore.
The guidelines say, “advertisements that feature a consumer and
convey his or her experience with a product or service as typical
when that is not the case will be required to clearly disclose the
results that consumers can generally expect.”
That means if you’re going to mention specific results in
testimonials, you have to tell people what the typical results are.
We all know what the typical results are for most information
products… people buy them and do nothing with them. That means
it’s nearly impossible for you to quantify a “typical” result. If
you don’t know what results at least a statistically significant
sample of buyers got, you can say what’s typical!
All of that means (get ready for it) you simply can’t use
results-based testimonials. Period. Unless you want to risk an
$11,000 fine each time you get caught.
You can still use testimonials where people say they love your
product, or like you a lot, or generally think you’re swell. Those
tend not to be powerful selling tools, but they pass muster.
But that’s not all the guidelines mean.
You also have to disclose if your friends wrote your testimonials.
Again, will you get caught if you don’t? Probably not, but it’s a
risk. Honesty is the best way not to get in trouble.
The best advice is not to depend on testimonials to sell your
product. Make your offer good enough to sell on its own.
In a way, this is bad for new marketers, because it can be tough to
come up with a good offer. But it’s also good, because you don’t
have to worry as much about getting testimonials!
What does this mean for affiliate marketing?
It’s actually simpler for affiliates than for product sellers.
If you’re an affiliate, you have to disclose that you’re getting
paid when people buy through your affiliate link.
Yes, that means you need to tell people that your ClickBank link is
indeed a ClickBank link, even if you’ve made it prettier by saying
“yoursite dot com/productx” or whatever.
There are two ways to do this. The first way is to include a
something like this:
“Links on this site for product reviews are affiliate links. I get
paid a commission when you buy a product after clicking on one of
The second way is to be explicit about each link. You might say
something like, “I get paid a commission when you buy through this
Do both approaches cover you legally? Hard to say, and the FTC
hasn’t cleared that up yet. So do whichever one you think is safer.
Finally, as an affiliate be VERY careful about using the
promotional email templates product sellers give you.
Those emails often contain claims about results, and the new FTC
guidelines frown on that unless you tell people what the typical
The new FTC guidelines don’t specifically talk about email
marketing, but odds are good this will be considered covered as
well (hey, it’s selling). So when in doubt, leave it out.
So what should I do?
First and foremost, you’ll want to get some genuine legal advice,
especially if you have a big site and/or a large mailing list.
Don’t just take our word for this stuff.
If you’re an affiliate marketer, get busy adding disclosures to the
sites you use to promote products. That includes blogs and review
pages/sites. At a minimum:
1) Add a general disclosure to your site saying that your
promotional links are affiliate links, and that you get paid when
people buy through those links
2) If you offer an free items (front-end sign-up enticements or
bonuses), make sure you tell people that any affiliate links in
those items are getting you paid
Beyond that, it’s up to you. When in doubt, disclose more
information than you think you need to. It doesn’t pay to get on
the wrong side of the FTC.
If you’re a product marketer, you’ll probably have more work to do.
Here’s a very brief (and probably incomplete) checklist:
1) Start scrubbing your results-based testimonials from your sales
pages. If you actually CAN quantify typical/average results, go
ahead and do that, but most people won’t be able to. In fact,
during the comment period on the rules, some folks brought that up
with the FTC, specifically for weight loss products…and the FTC
promptly ignored it.
2) Modify your affiliate email templates (and other things, like
solo ads) to remove any results claims.
3) Contact your affiliates to tell them you did that, and to give
them new stuff they can use instead.
4) Scrub your products of any results claims as well, unless
they’re your personal results and you include ALL of your results
(results for every single trial of your free traffic strategy, for
5) If you use any testimonials from people you gave a free copy of
your product to, say so.
Bottom line, disclose, disclose, disclose. Did we mention disclose?
In the end, these new guidelines aren’t the death of Internet
marketing, or of affiliate marketing. And if you sell a product on
the web, you aren’t out of business.
That said, if you don’t want to risk racking up some eye-popping
fines, please take some reasonable steps to comply with the new
guidelines as soon as you can… and as completely as you can,
given that they’re a little vague at the moment.
We all have to make changes, unless we just got lucky and were
completely untouched by the new guidelines. That’s probably rare.
So make the changes you need to make and get used to the new world.
And look on the bright side. The new guidelines are going to make
it harder for people to sell with hype and false promises. Those
kind of fraudulent sellers hurt everybody by giving Internet
marketing a bad name.
The marketers who can pass muster and sell well even when being
completely honest can still make a killing.
Andrew X and Steven Lee Jones