Should Google, Yahoo, Mahalo, etc. ban affiliate links? (or “Will the FTC ban undisclosed affiliate links for us all?”)
“We wanted to make clear . . . if you’re being paid, you should disclose that.”
Mary K. Engle, FTC associate director for advertising practices quoted in the Washington Post
If you’re getting paid you need to disclose it, that’s just the law. The only question is how do we disclose. There are levels:
- 1. STRONG DISCLOSURE: Clearly labeling something an advertisement. Google does this by requiring you to say “Ads by Google.” I would say this is the clearest form of disclosure.
- 2. STANDARD DISCLOSURE OF OBVIOUS ADVERTISING (SDOA): Magazines, TV, and newspapers achieve average disclosure without labeling advertising because it’s so obvious to everyone when the ads start and end. When the editorial content is over on LOST you have a commercial come on and it’s plain as day. When you turn the page in a magazine and see a Mercedes Benz or a vodka ad you just know it’s not editorial because it is not in the same format.
- 3. STANDARD DISCLOSURE OF NON-OBVIOUS ADVERTISING (SDNOA): When advertising and marketing messages come in the form of non-advertising based media additional steps are called for. If a newspaper has five stories on a page and one advertisement that is formatted like the other stories–say the same font and column layout–a reader might be confused. So, newspapers put “sponsored” or “partner content” on these sections to make it clear. When a news network like CNBC carries a long-form commercial that is designed in a talk show fashion they put a warning up front that this is paid content. They put “paid programming” in the channel guide as well. You can read about magazine advertising standards here.
We exist in a new medium, the web, and whenever a new medium comes out the overzealous marketers try to take advantage of the lack of standards and oversight. This leads to some form of regulation: self-imposed or governmental. Governmental is the worst kind because the Government doesn’t know your industry as well as you do, and they are historically very slow. If the government has to regulate your business you’ve failed as an industry and you’re pretty screwed because now you don’t control your destiny.
Affiliate marketing is on the precipice of being regulated.
We’ve been having some great examples on my post yesterday on undisclosure of affiliate links. Over at ReveNews there are some comments as well. Many other the comments are sophisticated (and many are childish, but that’s to be expected).
One of the more interesting ones I think is based on commerce sites. Should commerce sites disclose they are being paid? Probably not, because it falls into “SDOA” (standard disclosure of obvious advertising). It’s clear that a commerce sites make money by selling something. So, if we walk in to Walmart we assume that they are going to make money when we buy a Diet Coke. However, when we walk into someone’s house for a dinner party we don’t expect they are making money when we drink a Diet Coke. If you site is a blog most users assume it’s like a dinner party and don’t expect you’re getting paid for handing us a Diet Coke. If your site is callled “The Diet Soda Store” and it has ecommerce elements like a shopping card and prices we all know you’re making money and no disclosure is needed.
99% of the problem in the affiliate space is because people are making non-commercial sites with hidden advertising links.
If you mix a non-commercial metaphor (blog, TV show, news paper article) with a commercial objective (selling something) and don’t disclose you’re going to create the follow pattern:
- Most users will be duped and you’ll get better performance than if you did disclose.
- A small percentage of users will find out and get upset.
- An even smaller percentage of those users will report you to someone (government, your partners, the press).
- The end result will be some combination of offenders getting caught and in trouble with the law or press, confusion in the marketplace and drive users away, or industry/partner censorship of you and your process.
So, at the end of the day you’re much better off giving up performance at the start for longer value.
My feeling on the question of “should affiliates disclose” is currently as follows:
- If you’re not a pure commerce site you should disclose at the point of the advertisement.
- If you’re a pure commerce site it doesn’t matter because people expect you’re going to make money. Commerce sites are obviously doing commerce when they have shopping carts, the ability to buy stuff, product listings, etc.
Here are the gray areas I don’t have the answers for:
Comparison shopping links. Do these need to be labeled? I’m not sure, when I see five items listed by price at the end of a blog post or a news story I’m assuming it’s an advertisement where people get paid. Does everyone understand that? Do most folks understand that? If you look the Chitika ads on GearLive (see right) do you think they are paid or not?
- Partner or Offer Links: Is this clear to users? Many sites have “partner links” and I’m fairly certain those are paid when I see them (why else would they be listed as partners?). So, I know they are not just organic links, but do most folks know that “partner” means “commercial relationship” of some kind? I don’t know. I think this is a jump ball. In the About.com section (see image below) do you think that users know that “Offers” means they are getting paid? I don’t really know.
Thoughts? Other examples?
Should we ban unlabled affiliate links from Mahalo?
It seems the members of our editorial team are declining to list pages in Mahalo that have hidden affiliate links.
Questions:
- Should Mahalo ban all sites that have hidden/undisclosed affiliate links?
- Should Mahalo allow great sites that have hidden/undisclosed affiliate links?
- Google has banned paid links, do you think they should follow Mahalo and ban/lower the ranking of pages with undisclosed affiliate links?
More Affiliate Summit Keynote discussions…
Wow… I’m on the road again today (at LAX with Tyler right now in fact), but the feedback on the Affiliate Summit just keeps coming in.
Mahalo’s Missing DNA back at you Jason Calacanis
- There is only one potential cure for the system gaming which pollutes the Net- and some gaming is good- it forces innovation. The real cure is to remove the incentive from the system. Ponder that…if so there will be collateral damage. There are many good publishers, analytics people (who can do PPCSE via arbitrage much better than merchants) and community builders. Please-all of you- stop thinking of yourselves as “affiliates”.
Affiliate Summit West 2008 Thank Yous
- Also, love him or hate him, you have to thank Jason Calacanis for doing what he did at the Keynote…It’s rare that you see a keynote that leaves everyone talking for the duration of the conference, but that’s what Jason is a pro at. So thanks Jason…you jerk.
Calacanis and the Real Hurdles for Affiliate Marketing
- While I do agree with Jason Calacanis’ basic premise that web content creation should always strive for the best and focus on quality and community rather than quick profit, I don’t think web spam is the biggest hurdle for affiliate marketing (or search engines for that matter). Instead, the biggest hurdle for our industry in the coming years is our ability to open the doors to new content creators who want to find ways to responsibly monetize the content they are creating.
More feedback on my talk at the Affiliate Summit yesterday.
Yesterday I gave the keynote at the Affiliate Summit in Las Vegas. It’s a fantastic event filled with great folks, many of which are doing good work. Of course, many of us know that affiliate programs–the ones where folks get a commission for selling something–are one of the major contributors to index spam and pollution on the web.
As you would expect, having me speak at a conference about Affiliate Marketing is almost as bad as having me speak at a conference about SEO (search engine optimization). After all, I started Mahalo.com as a reaction to the large amount of low quality sites on the internet and the degrading quality of search results.
In the Affiliate World I’m the bad guy. The more Mahalo succeeds the more folks in the Affiliate business will suffer because the honest truth is that most consumers DON’T want to go to the sites that Affiliates are making. Affiliates typically make sties that are “thin” with little original content, and in some cases stolen content. These sites are typically made with goal of spending as little as possible to get you to click as much as possible–the result is profitability, but the cost is the user experience.
Now, some of the folks do create nice sites and most of the folks are good people. Overall, my impression is that there are much better content creators out there making better sites in almost every vertical so these sites don’t need to exist 90% of the time. However, they exist because they are economically viable.
As you can imagine, coming into a room full of hard working folks and telling their hard work is kind of a waste of time isn’t going to make you the most popular guy. However, I did make a point of telling everyone that they are very hard working and very smart and that they should work hard make high-quality sites.
The number one question I got was how do you define high-quality. I gave what I think is a very simple test: take the ten best sites out there for your vertical. Loook at them deeply and ask yourself “can I make something at least 20% better? If you can’t then why do it? The users don’t need you and you’re basically spinning your wheels.
That’s what I’ve always done as a benchmark for myself. Let me show some examples:
- I started Silicon Alley Reproter magazine because I didn’t think WIRED or Red Herring did a good job covering New York City. I was right, and we created a product that was 1,000% better for New York coverage.
- I started Weblogs, Inc. thinking that we could create blogs that were 100% better than existing media options out there. We were correct and Engadget, Autoblog, Joystiq, Luxst, and BloggingStocks all had amazing success.
- I started Mahalo.com with the idea that we could create pages that were more helpful for “guidence” than Google, Yahoo, MSN, Ask, Wikipedia, About.com, and DMOZ. Will we be right again? I don’t know yet, but I think so.
Jangro has a really nice point in his coverage of the keynote:
http://www.jangro.com/a/2008/02/26/thank-you-jason-calacanis/
- But his basic message is that Internet Marketers are pissing in the well, polluting our rivers, overfishing our oceans, insert your own tragedy of the commons metaphor here.
While he delivered his message it in a way that shouldn’t have surprised anyone, I am glad he did it.
To those of you who took offense to what Jason said, I say grow some skin and really think about what this guy is saying. Would you really rather have someone here telling us all how awesome we are while blowing smoke up our collective asses?
News flash. There ARE internet marketers out there who are making a mess of the Internet.
It doesn’t matter if Jason gets it or not. It doesn’t matter if you think what you do is “affiliate spam” or not. It doesn’t matter if he insulted our boy Zac. (Zac will be just fine).
What matters is this is what a not insignificant portion of the world outside of our little industry thinks about us.
And it’s not people that don’t matter to us. It’s the people who have control over our traffic.
That last line is the key point. The Affiliate folks making thin, lame, or weak sites have to understand that the Valley looks what they do as the lowest form of creativity on the internet. Content creators hate Affiliate spam sites, bloggers hate the spam comments from then, and the PhD’s at Google and Yahoo spend all day trying to kill them.
If Affiliates keep up their spamming antics they are going to become a real target by not only the rest of the industry, but also the FTC, which doesn’t take nicely to covert marketing.
At the end of the day I’m really glad I went to the Affiliate Summit because I met a ton of great people, I learned a lot, and once again we’ve started a really important dialogue–not disimilar to the one about SEO.
I’m really looking forward to continuing the discussion… the comments are open.
Affiliate Summit Keynote
The Affiliate Summit keynote went really well…. it was less controversial and more substance. I’m really glad they invited me and we had the hard discussion about affiliate spam.
I’m going to post the coverage below:
- Live Blogging the Jason Calacanis Keynote at Affiliate Summit
- Jason Calacanis Urges Affiliates to Think Big, Stop Holding Up Checks
- Message board discussion of the keynote
- “Don’t pollute the river”, affiliates told.
- Jason Calacanis Keynote Recap (Affiliate Summit)
(please post links in comments if you find them)
Oscar Coverage
We’re doing live coverage of the Oscars right now….. got about a dozen folks here at the office.
PMOG, the playful web, and some brilliant stuff that almost changed the world (Virtual Places and Third Voice)
It’s not often I find something online that I find absolutely frackin’ brilliant, but at Foo Camp last year I got a glimpse of PMOG and I new it was important. For the past two weeks or so I’ve been playing with it and I’m blown away.
PMOG stands for “passively multiplayer online game,” an obvious play on the MMOG acronym which stands for “massively multiplayer online game.” World of Warcraft is the best known MMOG with over eight million people paying around $15 a month to level up. It’s online D&D, and it’s crack.
In WOW you get experience points and level up for going on missions to kill dragons, but in PMOG you get points and level up for surfing the web.
How it works is fairly simple after you get past the betaness of the product: you install a tool bar which tracks your activity on the web (see above). As you surf the web you get experience points (see below), and you can get even more experience points for taking or creating “missions.”
A mission is basically list of sites to visit. I create a list of Star Wars fan-created movies (see above). As you travel from video to video you a see a little note (see below) that tells you a little about the film.
This reminds me a lot of Ehud Shapiro’s Virtual Places (Ubique Ltd) which AOL bought back in the day for $14M (if my memory serves me correct). In VP you could command a bus (see below) and take folks on a tour of the web. It was a ton of fun. It’s also similar to Third Voice, a service which allowed users to post a comment on any website, again with a third party piece of software.
Wow, Virtual Places and Third Voice… talk about old school services. I wonder if Mark Zuckerberg and Kevin Rose even know what those services are?!? We’re old huh!?
I met Ehud in 1995 and actually built an city called “Restaurant City” with a building called VPTowers for people using Virtual Places as part of GNN and AOL Greenhouse–but that’s a story for another day.
ThirdVoice let you annotate the web. I loved this idea, but it was controversial because people could write on your website. Folks lined up against it and it caused a real bruhaha back in the day, and it of course flamed out. It’s really interesting to think about Virtual Places and Third Voice because at the time those companies were thought to be as important as Netscape, Yahoo, and Pointcast. They wound up being exactly as important as Pointcast in fact.
Anyway, back then this was all new and web browsers crashed every 100 or so pages. Today, the web is very stable and browsers only crash every 200 or pages or so.
Back to PMOG….
Simply surfing around the web is not all PMOG let’s you do. You can also create allies and enemies who you battle with on web pages. You can drop a bomb from the tool on Apple.com for example. If you start dropping bombs, however, people might use a tool to block your ability to drop bombs. You can wear armor so that you don’t get hit by a bomb, or put lightpost on a website to send folks to other places. You can give people things in creates. It’s all very clever.
Essentially it makes surfing the web a multiplayer game. It doesn’t have a killer addictive feature yet that keeps you coming back for more, but I can feel that feature will popup any time. Even if it doesn’t, PMOG is a really fun way to play with your friends.
PMOG was created by one of my oldest friends in the Internet industry, Justin Hall. Justin was the first blogger, before there was a term for journaling. It’s great to see Justin execute on something like this 12-14 years into his web career. He’s got a huge win on his hands I think.
PMOG is just one of those things that just makes your mind spin with possibilities. It reminds you of the creativity that Web 1.0 was all about: art over commerce, cool over cash flow, and clever over commercial. Sometimes I wish the web never made any money and we could have just played with it as a diversion. I guess some folks still do. Rock on Justin.
Jason Kidd Trade to Dallas verdict? 15 assists in game 2
Cubes is a genius… as Kanye Would say “take this, haters!”
My prediction? When it comes down to crunch time in the playoffs and finals look for JKIDD to stop and pop for the win, and dish for the open three for the win–over and over. No one spreads the floor like JKIDD. Old? Yes. done? Not yet.
Gears of War 2 Trailer…..
Gears of War 2 trailer is out, and the video game team at Mahalo is excited… 
