Incentivized Marketing is Coming Under Fire

Two recent articles bring to light the challenges in the incentivized marketing business:

Mark Meckler’s excellent iLegal column this week entitled ‘Incentivized’ Offers and the FTC – Things Are Heating Up” in DM Confidential most pointedly warns advertisers and affiliates to pay attention to the FTC’s actions around incentivized marketing.

“The inside word is that the FTC is going to really turn up the heat in the next several weeks, and intends to launch actions against multiple entities which it believes are running incentivized offers without appropriate disclosure. Industry buzz says that several major companies who have seen tremendous growth from running this sort of offer are being scrutinized and are at risk.

The legal sands are rapidly shifting for the incentivized portion of our industry. If you operate in this space, now is the time to make sure that your sites and offers are 100% compliant, to the best of your ability. After the FTC contacts you, it’s too late, and the FTC is going to extract their pint of blood, in addition to forcing you to comply.”

And Laurie Peterson of Mediapost published an article about ValueClick’s recent quarter’s success, and how it’s being tainted by the fears of an impending investigation by the FTC:

Stanford Group this week issued its own bulletin, stating “we believe the FTC is investigating deceptive Internet advertising by several companies, particularly relating to offers claiming or implying “free” products. While it is unclear whether ValueClick is one of those companies, the practices being investigated could negatively impact ValueClick’s lead generation business.”

So, my personal advice to you, if you’re an advertiser, affiliate or publisher is to make sure you understand what “free” means if you’re going to use it to market a product. Understand the implications of that offer, and make sure you’re delivering. And make sure you’ve read the FTC’s Disclosure document, and are following it’s guidelines.

And keep an eye on the developments around this topic. It’ll be interesting to see what happens this year.

update: Here’s another post on this topic that’s worth reading from 5 Star Affiliate Programs.


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