Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Affiliate marketing is a type of performance-based marketing where an affiliate is rewarded, usually with a pre-agreed percentage of each sale, by a business for each new customer attracted by their marketing efforts. Because of the nature of affiliate advertisers, problematic advertising claims can spread to a large number of affiliates in a relatively short space of time.
In 2013, the ASA upheld complaints that a marcom for a free trial did not make clear that the consumer would be automatically charged for the product the following month. Amongst other things, it also ruled that efficacy claims for the product had not been substantiated. The manufacturer of the product responded to the ASA stating that the ad had been created by an affiliate and that they could not provide contact details for their affiliates. Notwithstanding the fact that the ads had been created by affiliates rather than the business themselves, the ASA held the business responsible. The fact the ads were apparently designed by an affiliate, in effect an employee of the business, was not considered a sufficient defence to relieve the business of its responsibilities to ensure claims in its advertising were robustly substantiated (LifeStyle Advantage Ltd t/a Essence of Argan, 6 March 2013; GTMC Inc, 31 July 2013).
The ASA also investigated complaints about an ad by a business’s affiliate marketer that made numerous efficacy claims whilst masquerading as a piece of editorial written by an independent individual. The advertiser did not provide substantiation to the specific challenges regarding the products efficacy or acknowledge that the advert was not clearly identifiable as such, in light of this the ASA upheld all points of the complaint (Slimtoneplus.com, 19 December 2012).
Advertisers should bear in mind that allowing their affiliate marketers free rein over the content of ads does not excuse them from the responsibility of ensuring that that advertising is compliant with the CAP Code. In 2013 the ASA investigated complaints about an online data storage business whose ads were making misleading claims regarding unlimited free storage. The business protested that an affiliate marketer had been responsible for the content of the ad in question, however, the ASA considered that as the business benefited every time a consumer clicked through and created an account, and that the affiliate was in effect an employee of the business, both the business and the affiliate marketer were held responsible under the Code. The complaints were therefore upheld (JC Inc t/a justcloud.com, 27th March 2013). Similarly as primary responsibility for observing the Code falls on marketers promotions run by affiliates that do not adhere to the Code will be problematic (Flamingo Intervest Ltd t/a Ziinga.com, 27 February 2013).
Similarly, relying on affiliates to correctly target ads does not mean that the brand itself relinquishes responsibility for the promotion of its product. A gambling ad that was mistakenly sent by an affiliate marketer to a child was complained about and investigated. Although the brand contended that the affiliate marketer was responsible for the administrative error that caused the child to receive a gambling promotion the ASA upheld the complaint and the brand was named in the adjudication (Club Website Ltd, 8 January 2014).