Due Diligence Prevents Damage (Continued) "There are some merchants who are able to utilize this form of market- ing effectively. There are some large brand direct marketing merchants in this area. But... "Those who are successful in this arena have a lot of experience making it work and are well versed in all the ins and outs (managing the part- nerships, managing the leads, etc). It's definitely an area where the unin- formed should not jump into without a full understanding of the model. "It's always good advice for an advertiser to understand how their product/service is being promoted." Now that we've looked at the different types of loyalty affiliates, you can ana- lyze your own business model against theirs and make an educated decision on the policy to have for them. Whatever your decision is--however inclusive or exclusive-- write it down now so that you have it for the pinnacle of this week's work, which will be your complete affiliate program agreement. 167 T H U R S DAY: WO R D YO U R R E C O M M E N DAT I O N S O N A F F I L I AT E D I S C L O S U R E S Thursday: Word Your Recommendations on Affiliate Disclosures As I am writing this book, the following considerations are a must-read for all U.S.-based merchants and affiliates. I understand that with time the need for affiliate disclosures may expand well beyond the United States. Therefore, I highly encourage everyone to study this section of the chapter regardless of their current geographical location. Requirement to Disclose Relationships On December 1, 2009, the Federal Trade Commission's "Guides Concerning the Use of Endorsements and Testimonials in Advertising" (Endorsement Guides) came into force. With these guides, the FTC sought to patch the gaps in the Federal Trade Commission Act that was too general for the realities of new media. The FTC Act originally pro- hibited deceptive and unfair acts and practices in commerce, as well as misleading advertising. According to the FTC, the Endorsement Guides "really intended to provide additional guidance on how these prohibitions apply to online marketers, bloggers, and, in some cases, affiliates." Although officially the guides are not regulations but interpretations of the FTC Act, all businesses are expected to "voluntarily comply" with them (source: Richard Cleland's interview to Jim Edwards, http://jimedwards .s3.amazonaws.com/ftc-advertising-interview/index.html ).Therefore, it is imperative that we look at them in a bit more detail. You can download the full 81-page Endorsement Guides at www.ftc.gov/os/2009/ 10/091005endorsementguidesfnnotice.pdf .