Use YouTube a lot and you will invariably stumble across affiliate marketing at some point. The term is used to describe a review or mention of a product where a link to buy that product is pasted in the video鈥檚 description.
The practice is lucrative for many YouTube stars, who get a cut on sales generated via the link. It is also perfectly legal, so long as you are transparent about the fact your video is essentially an advert.
Now a study by Princeton University鈥檚 Arunesh Mathur and his colleagues has found that around 90 per cent of affiliate marketing is not disclosed at all. That is in contravention of rules drawn up by the United States Federal Trade Commission (FTC) and Britain鈥檚 Advertising Standards Authority (ASA), the bodies which protect consumer rights in each country.
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The FTC disclosures to be 鈥渃lear and conspicuous鈥�, while the ASA 鈥渁ffiliate links and any related content must be identified as such.鈥�
鈥淭here鈥檚 a clear, pervasive problem of non-compliance,鈥� says Rebecca Tushnet, a legal scholar at Harvard Law School. 鈥淵ou need to disclose that so consumers can decide what weight to put on your recommendation.鈥�
Widespread problem
Mathur and his colleagues randomly sampled half a million videos on YouTube and two million pins on Pinterest then checked them for links to 33 of the most popular affiliate marketing programs, including Amazon鈥檚. Just under 1 per cent of the samples contained an affiliate link.
Of those, 89.5 per cent of YouTube videos and 93 per cent of Pinterest pins did not disclose them in the correct way. The number may well be higher as coupon or voucher codes, for example, were not picked up by the analysis.
There were an estimated four billion videos on YouTube by the end of 2016 (and 400 hours are uploaded every minute) so millions of affiliate marketing reviews may be in breach of the rules.
YouTube did not respond to a request for comment, while a Pinterest spokesman said: 鈥淲e have a policy that requires users that have a relationship with a brand to consult with the FTC鈥檚 endorsement guidelines. We encourage users to report content that violates our policies.鈥�
The impetus should be on affiliate marketing firms, not social media sites, to compel their users to disclose ties, says Tushnet. 鈥淓ducation and a few enforcement actions, which tend to ruffle feathers, would be helpful.鈥�
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