News emerged today that the Office of Fair Trading has accepted legal undertakings from affiliate network, MoreNiche. The undertakings were set to address the OFT’s concerns about how merchants go about selling health and beauty products, in particular the way they are promoted through affiliate channels.
The OFT has two main concerns. The first is with affiliates operating websites containing what’s alleged to be reviews when in actual fact they are commercial promotions. The second is with some affiliate websites not making it clear to the consumer that said affiliates are being rewarded for purchases made by the consumers being introduced to MoreNiche’s merchants.
Results of the OFT investigation have meant MoreNiche and its director have established guidelines ensuring improvements are made to the operation of the affiliate network. The improvements will be made under the Enterprise Act 2002. MoreNiche will be reviewing its affiliate websites to prevent consumers from being misled and ensuring their affiliate status is clear.
MoreNiche was on hand to answer a few questions from A4u about the news. You can read the answers from the affiliate network’s Managing Director, Andrew Slack, below.
What are the Office of Fair Trading's latest concerns about affiliate marketing?
The OFT is seeking to ensure that consumers understand what type of content they are viewing. Ultimately they wish to make sure consumers are no being misled.
Due to the transparent nature of affiliate networks’ tracking links, visitors (or potential consumers) are being sent from an affiliate’s website to the merchant’s website in most cases without any knowledge of this tracking taking place.
Is it therefore important that if affiliates are earning commission from the content they are publishing that is made clear to the visitor. If affiliates do not disclose, the consumer may be misled, which is especially important to content based affiliates.
What is MoreNiche's involvement?
AS: MoreNiche is one of the largest content-based networks around. Most of our sales are being generated via bloggers and website owners writing content around our clients’ brands. The OFT approached us back in 2010 to get a broad understanding of how both our network and affiliate marketing in general operates.
We worked with the OFT to implement a solution that its happy with. The solution requires our compliance team to manually review affiliates’ websites to ensure they have a disclosure in a prominent position. Due to the volume of affiliates we have, we designed a guidance portal to provide assistance. However it is important to note affiliates may create their own disclosures and this is purely for ease.
How will MoreNiche make the kind of improvements dictated by the Enterprise Act 2002?
AS: When joining MoreNiche affiliates must now agree to a more comprehensive selection of terms. In addition, our compliance team will be manually reviewing all sale-generating affiliate sites and ensuring they have complied with the affiliate disclosure framework.
It is important to note that affiliates are responsible for the content on their own websites. When running any business it is important that you, as an affiliate, understand what legal requirements you must adhere to. To make this easier for affiliates we do have a number of extremely useful guidance notes and sector updates.
Is there a chance other networks could be investigated by the OFT?
AS: Larger networks, which benefit from a broader ‘mix’ of affiliates (email, voucher, cash back, etc) are likely to be less of a target. However it is very likely that as the internet becomes more regulated, other affiliate networks will need to comply.
I would encourage all network owners to take a read of our undertakings with the OFT and see if they should apply them to their business. I would also encourage the IAB to look at what we are doing with the affiliate disclosure portal and see if they would like to take ownership of this incentive in any way.
Are there likely to be any repercussions in the performance marketing industry as a whole?
AS: Performance marketing is evolving very quickly and challenges like this (along with others e.g. cookie law) are great opportunities for networks and affiliates to fly the flag for our industry. It’s worth showing that we are embracing change and working with and not against regulators.
I personally believe that this will have very little impact on our industry or our clients’ sectors. The change will simply force networks and merchants to question if they are doing everything possible to help affiliates comply with law. If they are not, maybe it’s time to invest some resource in this direction.