Evolve or Perish: The Changing Landscape of Affiliate Advertising

The world of online advertising is rapidly changing. The types of campaigns that affiliates have historically made money on are being driven out of existence, leaving affiliates with two choices: risk prosecution trying to milk a dying market, or join the new breed of companies elevating the industry and prospects by offering real brand name brands and real consumer value.

Overly-aggressive and deceptive practices by online advertisers have caught regulators’ attention, and the major online players are scrambling to self-regulate before the FTC does it for them. As a result, online advertising firms can expect a long-term taming of the “Wild West” that once was.

Below is a time line of events in 2009 that demonstrates the increasingly strict field of online affiliate advertising, provided by Hydra.

October 5, 2009 - Google Adwords:

“Beginning in the coming weeks, we'll no longer accept ads that promote Unacceptable Business Practices. This includes, but is not limited to, negative option or unclear billing, the sale of normally free items or services, and false celebrity endorsements.”

October 5, 2009 - FTC:

“…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.”

“…both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers.”

September 29, 2009 - Bing

“Microsoft Corp., in collaboration with the Federal Trade Commission (FTC), the U.S. Postal Inspection Service (USPIS) and Western Union, today launched a series of online public service announcements (PSAs) designed to help protect consumers from scams related to mortgage foreclosure rescue offers and promises of credit repair and advance fee fraud, also known as lottery scams.”

August 19, 2009 – IL Atty Gen’l & Oprah

“Attorney General Lisa Madigan… filed consumer fraud lawsuits against three suppliers and a local affiliate marketer of acai berry products charging that the companies lure customers with free trial offers – through aggressive Internet marketing techniques – and then charge customers’ credit cards prematurely, do not always supply the product and make it nearly impossible to cancel.”

“In addition, Harpo, Inc., producers of “The Oprah Winfrey Show” and “The Dr. Oz Show,” along with Dr. Mehmet Oz, filed a trademark infringement complaint today against 40 Internet marketers of dietary supplements, including acai berry products among others.”

July 21, 2009 - Yahoo

“… any affiliate-type offers (i.e. teeth whitening, colon cleanse, weight loss, etc.) must cease from running on the Yahoo! Network. In addition to this, dating offers cannot run through our exchange either.”

July 15, 2009 – FTC

Federal Trade Commission Chairman Jon Leibowitz, joined by California Attorney General Jerry Brown, today announced Operation Loan Lies, a coordinated national law enforcement effort to crack down on mortgage modification scams.

July 7, 2009 – FTC

“The Federal Trade Commission today announced a law enforcement crackdown on scammers… promising non-existent jobs; promoting overhyped get-rich-quick plans, bogus government grants, and phony debt-reduction services; or putting unauthorized charges on consumers’ credit or debit cards.”