90% of YouTube Affiliate Ads in Breach of FTC Regulation

A Princeton University research paper has found that 90% of affiliate links on YouTube and Pinterest are undeclared.

The FTC says that if a content creator is receiving money for a product feature or mention, this should be clearly outlined to US consumers:

“(…) if there’s a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed.

“For example, if an ad features an endorser who’s a relative or employee of the marketer, the ad is misleading unless the connection is made clear. The same is usually true if the endorser has been paid or given something of value to tout the product.

“The reason is obvious: Knowing about the connection is important information for anyone evaluating the endorsement.”

The study concerned over 500,000 YouTube videos and 2 million Pinterest posts. 0.6-0.9% were found to contain affiliate marketing.

The FTC says content producers should contain ‘explanation disclosures’ in their posts, but the study found that under 2% of affiliate links are marked in this way.

Science, technology and fashion were among the most common sectors to use undisclosed links.

The authors write: “Based on our findings, we make policy recommendations geared towards various stakeholders in the affiliate marketing industry, highlighting how both social media platforms and affiliate companies can enable better disclosure practices.”

Find the study here.