Affiliate marketing programs for online properties are essentially similar to traditional distribution or marketing referral arrangements in the offline world. Affiliate program providers range from the global US internet titans to the niche online networks.

For advertisers and merchants who are seeking to use an affiliate partner program to extend their sales channels, devising comprehensive affiliate program T&Cs are needed. Aside from the usual liability provisions, some of the more specific drafting issues will include:

• ensuring affiliates generate leads and sales in accordance with laws (especially consumer advertising and marketing regulations) and that are consistent with brand values.
• addressing chargebacks.
• permitted or reserved use of trade marks or keywords by affiliates for pay per click and search engine optimisation programs.
• requiring affiliates to make relevant disclosures of their marketing affiliate relationship with the advertiser or merchant.

For affiliates who are seeking to monetise their web traffic, the main issues are:

• understanding the referral metric (cost per click, cost per action) and the commission structure (flat %, % volume tier, etc.)
• how and when commission payments will be made.
• compliance with the affiliate program terms including general disclosure of financial compensation to their users.

As an affiliate, unless you are able to drive significant sales traffic to the advertiser or merchant its highly.

“Ethical” use of keywords has probably been a more relevant legal topic that has been the subject of court rulings. In the context of affiliate marketing, it pays to be aware of any specific contractual prohibitions and on the flip side for brand owners or advertisers to make sure that rules for affiliate SEO behavior are pre-defined to allow them to co-exist with the brand’s own SEO strategy.

So far most of the specific regulatory directives for internet affiliate marketers have been mainly US-centric guidance issued by the US FTC. At the moment, general consumer and B2C marketing laws in the region will guide the practice of most affiliate activities, but we’ll need to keep an eye open on any specific moves by consumer regulators as new variants of online channel marketing emerge.

Icon image: Ahmad Hania under CreativeCommons Licence