| || |
The Peril of Compensated Persuasion – May 7, 2009
As many of you know, we have been blowing the whistle for a few years about "review" websites that are actually affiliate sites. For those who need a bit of an education or haven't read our past writings, an affiliate website is one that links over to a manufacturer's or retailer's website AND is paid a commission if you buy anything from the destination website.
As most of you know, for years we didn't even accept advertising but as our costs of doing our reviews has grown, we now accept display advertising similar to Google- meaning that if you click on one of our clearly marked sponsored links, that advertiser pays us a small click through rate regardless if you buy anything from their site or not. This is NOT how an affiliate site works. The affiliate site only gets paid if a consumer buys a product at the destination site so while Treadmill Doctor doesn't have any monetary reason to steer consumers to one brand or another since all the advertisers pay the same click through rate, an affiliate site is motivated to convince you to buy a particular product from the website that pays them the highest commission.
There are a couple of "treadmill review" affiliate sites that clearly state the nature of their game and to those, we compliment you on your transparency but on the whole, the affiliate world is full of those pushing Sole and Smooth products especially because they get up to an 8% commission on these products. On a $1,500 treadmill, that's a $120 payday?not a bad take for just being a cheerleader for a particular treadmill. The problem is that most of these sites mask themselves as "review" sites when all they are is a promotional website.
We thought that this was going to continue ad nauseum but to our surprise, the government is finally getting serious. According to an article in the Wall Street Journal on April 23, 2009, the FTC (Federal Trade Commission) is getting serious about websites and bloggers that pose as review sites and are actually affiliate websites. According to the Journal, the FTC is proposing legislation that holds companies liable for misleading claims and a decision is expected as early as this summer. Under the proposal, not only will the affiliate site be held liable but also the manufacturer or retailer that pays the commission will also be held liable. That is good news for consumers. According to the proposed guidelines, the websites will have an opportunity to stop the deception but if it does not stop, the FTC will be able to force these scoundrels to repay consumers.
As the Journal points out, it has been like the "wild west" on the Internet for some time. The problem has been not that the Internet has been the wild west but rather that many of the "review" sites have been like Jesse James. Although the products the affiliate sites have been pushing aren't bad and in many cases are superior products there ought to be full transparency. We have always thought that if you are being paid to formulate an opinion, you ought to let the consumer know.
If you have been snookered by an affiliate site, you can file a formal consumer complaint with the FTC at www.ftc.gov