How to Run Compliant Farticles (11)
I've posted this elsewhere, and I thought Stackers might find it informative.
In light of all the recent discussion on cloaking, there's been some discussion on running farticles/advertorial style landing pages.
The conversation typically goes something like:
A: "These guys are running farticles and absolutely killing it!"
B: "Don't run farticles; it's not a long term business. You'll get busted by the FTC."
A: "Well, what if I run them advertising only to Australians/Europeans/Asians/animals/insects/protozoa? What if I have disclaimers? What if I..."
B: "There is no such thing as a compliant farticle."
Well folks, it's true. Farticles, as they've been run in the past, are unethical and highly illegal. But, you can run advertorial style pages if you do it the correct way. There are multi-million dollar companies doing so right now. And they're either making a killing doing so or they're very deep in debt. As you will see, however, running a compliant farticle is hard -- and damn near impossible unless you own your own product.
So here's what I'm going to do:
1. Walk you through the legal documentation which explains what aspects of farticles are illegal and why. This will help you understand what you can't do with farticles and why.
2. Walk you through a compliant farticle run by Hungry Fish Media, of Force Factor, Somnapure and Stages of Beauty fame. This will help you understand what you must do with farticles in order to remain compliant.
(Disclaimer: While I may have some legal training, I am not a lawyer and you should take none of the following as legal advice.)
1. What aspects of farticles are illegal?
Take a look at FTC vs Ricardo Jose Labra, the FTC's filing for a case against a man accused of running farticles who is currently in the process of getting his ass handed to him.
If you scroll down to page 5, you'll see a section titled "Violation of the FTC Act." Ah, yes, there's the good stuff.
Here's what RJL was doing that the FTC no likey:
- False and Unsabstianted Product Claims
RJL made claims that use of the product would cause rapid weight loss. These claims were either false or not substantiated.
Lesson: You cannot make shit up about the efficacy of the products you're promoting. - Misrepresentations / Fake News Reports
RJL's page implied that the report was an objective one, with tests performed demonstrating the effectiveness of the product. Comments following the articles were misrepresented to appear to be independent commentary. In fact, the report was simply an advertisement, no tests had been performed, and the comments were made up.
Lesson: You cannot be deceptive about whether your landing page is an objective report. Also, you cannot make shit up about the user experience of the products you're promoting, including bullshit testimonials. - Failure to Disclose
As above, RJL's page did not disclose a connection to the seller of the products and purported to be an independent report. RJL did not disclose "adequately" this connection and in fact expressly implied that the report was objective and no connection was present.
Lesson: You must clearly and conspicuously disclose your connection to the seller.
2. What does a compliant farticle consist of?
Well boo-fucking-hoo, right? I mean, there's no way anyone would buy anything from a pre-sale farticle that conforms to the above three lessons, right?
Wrong.
Take a look at this magnificent motherlover: Health Headlines
(If anyone has an issue with me "outing" this page, let me know and I'll consider taking down the link. Given that this isn't run by an affiliate but rather by a massive direct response firm, I can't imagine anyone will have a problem with it.)
So let's take a look at what this page doesn't do. Taking the three lessons from above:
- You cannot make shit up about the efficacy of the products you're promoting.
Implementation: Note the lack of bullshit promises, eg. "Gain 28.6 pounds of muscle in 3 hours!" Note the use of celebrities and their quotes: "Force Factor is the absolute best product to hit the market in years." I guarantee they have documentation on file supporting every single one of their claims, such as "Increased Blood Flow and Oxygen Delivery to Muscles," "Boosted Strength, Endurance and Power," etc. Note that all these are listed as "Benefits of Nitric Oxide Supplements," not as benefits of Force Factor itself, so the company does not necessarily need to have performed its own tests as long as tests have been performed using nitric oxide supplements in general. That before and after picture at the top -- do you think the ripped it from someone's lander? Hint: Hell no. - You cannot be deceptive about whether your landing page is an objective report. Also, you cannot make shit up about the user experience of the products you're promoting, including bullshit testimonials.
Implementation: Note that there is no bullshit "reporter," and note that the page does not attempt to imitate a newspaper publication or claim to be a report of some independent testing. Also, note the lack of bullshit testimonials. - You must clearly and conspicuously disclose your connection to the seller.
Implementation: Note the text on the right side of the page stating "HFM Marketing, LLC sponsors this website, and its parent company distributes Force Factor. Writers are compensated by HFM Marketing, LLC." This text is not buried at the bottom of the page. In fact, it's so damn conspicuous that I bet no one reads it.
"Ok, awesome, I'm gonna get started running compliant farticles right away!"
Good luck.
Here's why it's tough:
- You need to be able to back up your promises of efficacy.
Any claims you make you need to be able to substantiate. If you're running an affiliate offer, testimonials provided by the advertiser may or may not be legit; it's your ass on the line if they're not. The only way to be sure is to have your own effective product and collect testimonials yourself from your customers. - You need to have a product that doesn't suck.
Look, you don't get sued because your landing page is deceptive. You get sued because your landing page was deceptive and thousands of people bitched about it to the FTC. Hungry Fish Media is not 100% safe; they could get sued by the FTC and the FTC would probably win. But guess what? They make a decent product they respond promptly to customer complaints... Their customer experience isn't shit, so they don't have tens of thousands of complaints on file with the FTC. This is very difficult to do as an affiliate. Most of the offers whored out to networks are crap; if they weren't crap, the advertisers would promote them in-house and make a killing. Do you see Force Factor, Somnapure, or Stages of Beauty on any affiliate network these days? No. Why? Because it isn't worth it for these companies to take the risk of affiliates running shitty pre-sales pages with bullshit claims and tarnishing their brand and getting them in trouble with the FTC. Create your own product so you can have full control over the customer experience and can reduce your customer complaints. - You need to be able to aquire customers at a CPA lower than your CLV.
Hungry Fish Media's CPA for this page might be high -- $60? $80? It doesn't matter, because I guarantee you the CLV is even higher -- way higher than your typical shitty rebills. Look, it's true that this page probably won't convert as well as a deceptive farticle. But it's also true that it doesn't need to -- because the CPA is probably way higher than $40 or $50 or whatever the rebill du jour is paying out. Why? Because the product doesn't suck. Because the product isn't sold on false promises, and doesn't result in irate customers charging back and demanding refunds. Create your own product that doesn't suck. You probably can't afford to run compliant farticles without doing so.
One thing to add: When you own your own product, you don't need to worry about the offer going down next week. That means you can afford to do some massive scale media buy testing to bring your CPA way down. I haven't seen Hungry Fish Media's offers running on Google search -- probably because after massive testing they're able to acquire customers way cheaper through media buys.
If you have access to a cloaker, don't be a fool about it. Either run your own products, a la Hungry Fish Media, or use it to get around anal traffic sources rules -- eg. Google's keyword relevancy restrictions, squeeze page restrictions, etc. Don't use it to break the law.
Hope this helps some people. Go forth and kill it.
great info....I still am amazed at what I see run in the states sometimes.....
the FTC is watching everything......there is really no point of taking that risk
If you're into compliance and legal crap this is a good read. This is a blog put together by Jeremy Johnson who's being sued by the FTC. he documents how everything he did was compliant based on everything the FTC had stated in their guidelines and breaks it all down with screen shots and everything.
http://evilftc.com/
If the FTC has a hard on for you no matter what you do it isn't right. Usage of language like "know or should have known", "clear and conspicuous", "express or implied". You can't fight these things, how do you argue against them. Well I didn't know. That's fine but you "should have known". You just can't fight it. Try and keep it clean and do your best and don't piss off consumers and you shouldn't have issues. Also, have you stuff reviewed by competent legal counsel, it's not really that expensive and if you have a good attorney they'll work with you to balance compliance and conversions.
Smaxor what kind of rates would you expect to pay to have a lawyer check on your landers every once and a while. Recommend any good ones?
Mr Green, not sure how much stock you place in him, but Rich Gorman at DR has always suggested Dozier and Venable, and especially Tom Cohn at Venable, who was at the FTC for 17 years.
Although he has recently bitched that "a series of 8 emails, 6 phone calls, and 1 C&D letter that Venable sent out last month cost us close to $5k." Well, hopefully you get what you pay for. 
Originally Posted by Smaxor
As an affiliate pushing crap offers or as an advertiser creating them, you can argue as long as you want that it should be "Buyer Beware." Hell, I've even heard affiliates argue that "I'm educating consumers that they should read the fine print!" Just don't expect to argue that in a court of law and come out ahead.
The FTC's job is not to make sure you follow the FTC's rules. The FTC's job is to make sure consumers aren't fucked over. So if you're following the FTC's rules but fucking over consumers at the same time... Well, you should know what's headed your way.
That's a really detailed report on affiliate marketing and the FTC.
Being an affiliate myself, I strongly believe that if you want to be sustainable and able to grow in long term, it's better to "be good", eg. stay away from trials, deceptive things... Yes they do make big money, and you might be able to bank in a very short period, however, you will have no idea when the FTC is going after you.
I've been hearing people saying, international affiliates are safe from FTC, well... I neither agree or disagree with this statement because no 1 really knows what can FTC does, and its ability to bring the lawsuit to YOUR country...
My 2 cent, be good to those who make you money, and you'll be fine in this business... Good write up spdg! This should be stickied!
Mr Green to engage decent legal counsel figure around a 2k retainer. That should cove reviewing 10-15 pages/offers, but they want a certain amount up front just to engage. Keep in mind if an attorney signs off on what you do, now they're liable themselves and sue-able so they don't want to just engage someone for 100 bux. Granted if you're brand new I understand you may not have that. But there's a lot of guys in this space that makes 100's of thousands a month and don't get legal counsel because they're cheap and lazy. It'll probably come back to bite them in the ass at some point.
I'm very happy to refer anyone to my attorney, he's amazing and reasonable, I only ask you're serious about working with them before you call. I've referred a bunch of people in the past that called him up asked him a bunch of questions, took a bunch of his time and never retained him. If you're serious about compliance I"m very happy to refer anyone to him. I also work with Vennable and yes their rates are retarded and they charge you for tons of random shit, they have been pissing me off with their billing lately. Crazy fees and a lot of status quo this is just how it is rather then pushing the line and fighting for it.
just a quick question here: is this also applicable to non-US affiliates? would FTC still be after you if you are not based in US? thanks!
Originally Posted by topgun
Originally Posted by Mr Green
Venable - well known, big and very expensive. Wanted a min $5k retainer (negotiated down to 2500) and charging an ass load per hour ($695/partner, less for associate). I also got ticked off at their faxing fees - the office fees were just nickle and diming.
Dozier - always had a weird vibe about them. People who put updates on blogspot domains in 2011 and claim to be internet marketing lawyers just doesn't work for me. No personal experience.
There's a newer guy in the affiliate legal biz but he's newer, his name is Aaron Kelly, haven't used him.
One other one is the FTC lawyer who sometimes posts on ShoeMoney - I got the feeling he was a one man show - my preference is a small-midsize firm where more then one person can look over a case over provide guidance if someone is on vacation etc.
Some people suggested Ifrah Law to me out in D.C (http://www.ifrahlaw.com), it's a much smaller boutique firm with reasonable rates. The head guy over there (Jeff Ifrah) is defending the Full Tilt Poker people. I've been pretty happy with them.
ETA: only relationship I have with Ifrah is client-attorney, and this is just a satisfied customer recommendation (as I reread this post I realized it seemed like an infomercial - I just tend to evangelize for companies/people I enjoy doing business with)
This guy is a great FTC/AG compliance attorney as well and a really cool guy. He's not my personal attorney but I talk with him all the time and he's represented 1-2 of the affiliate cases that happened with the FTC. Not a 100% sure on his rates but I'm sure they're much lass then Venable.
Richard B. Newman
HINCH NEWMAN LLP
Attorneys at Law
rnewman@hinchnewman.com
www.hinchnewman.com
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