Who Regulates Affiliate Marketing?

There’s certainly no doubt that affiliate marketing has proven itself to be one of the fastest and most effective ways to earn a substantial passive income online over the last few years. But, when I first decided to start working as an affiliate marketer, I had one main question that I couldn’t seem to get off my mind.

When it comes down to it, who regulates affiliate marketing? Is this something that a particular branch of global government takes under their control? Or, is it something that’s ahead of current laws and is working on its own? 

With affiliate marketing becoming such a profitable endeavor, it’s easy to understand why more and more people are looking into getting involved in this kind of opportunity, but to truly be successful, I feel like you need to really understand the ins and outs of the process.

However, because it’s such a new form of earning money, finding information can sometimes be a bit of a challenge. 

This is especially true when you’re working with a global market, as different countries have different regulations for sales and advertising. Here are a few things you need to know about affiliate marketing regulations and how they can affect your potential business. 

What Is Affiliate Marketing? 

When I first started out, I found that the first thing I really lacked was a consistent and accurate description of what affiliate marketing actually was. In its most basic form, affiliate marketing is when an influencer, such as a YouTuber or a Blogger, is approached by a particular company and asked to make a recommendation of their product to their audience.

They will then be provided with a link back to the product and will receive a percentage of the profits made as a result of their direct link. 

This is quickly becoming one of the most popular forms of advertising for businesses, as it comes with a wide range of benefits for everyone involved. First, the amount of risk a company has to take with this marketing technique is significantly less than standard means.

This is because the company loses very little if the influencer is unsuccessful. Mainly it will just be the cost of the sample product. 

However, when a company invests thousands upon thousands into a marketing campaign and it fails, it will not only result in terrible financial losses, but it could also ruin the reputation of the company as a whole.

With affiliate marketing, this risk disappears because influencers are making a recommendation based off of their own experiences and opinions, rather than trying to create a campaign for the purpose of sales.  

As for the influencers, this is a great opportunity for them to take advantage of the massive audience base that they’ve been able to put together. Many companies will pay anywhere from 15% to 20% of the profits that come their way.

If I assume that I have 100,000 followers and a quarter of them decide to try a product that costs $100 and that I’m earning a 15% profit on, that’s a significant chunk of change coming my way for making a recommendation on a product I really did enjoy. 

Now that I understood exactly what affiliate marketing was, it was now time to figure out what rules and government agencies regulated it. However, I quickly learned that this became more and more complicated with a lot of different grey areas to work through. 

Who Regulates in the UK? 

The UK government has set something that’s called the CAP Code, which is essentially a rule book for non-broadcast advertisements, sales, promotions, and direct marketing communication and is controlled by the Advertising Standards Authority (ASA).

It helps to ensure that no company or promoter is using unfair tactics to scam potential buyers or receive an unfair advantage over competitors. In 2010, the 12th version of this governing document was released to include online marketing tactics. So, in short, influencers taking part in affiliate marketing in the UK fall under these particular regulations. 

That means that if I plan on working with a company that’s based in the UK, I’ll need to make sure that I comply with these specific requirements. These rules are mostly based on what you’re allowed to promote to specific audiences and the phrasing you can use to get your point across.

This means that if I plan on making a deal with an alcohol brand, I need to make sure that my recommendations are specifically for people over the age of 18 and without any current mental struggles that could result in them making bad decisions. 

The rules laid out in this code are simple and completely understandable. Don’t promote potentially harmful products to an at-risk audience. Use your sense of social responsibility when promoting things such as gambling or lotteries. These are regulations that really, in my opinion, should be common sense for any influencer who cares about the well being of their audience. 

Who Regulates in the US? 

Who regulates affiliate marketing in the United States? Is it the IRS making sure that the appropriate taxes are being paid on earnings? Is there an Internet Affiliate Board that I should be registering with? 

Honestly, the answer is currently no. There is absolutely no governing body currently managing or regulating this market space as we speak. The government, as a whole, is having a hard time keeping up with the constant changes and progressions that this marketplace is making, which can be both a positive and a negative at the same time. 

For influencers, it means that there aren’t any concerns you need to worry about when taking on this kind of opportunity. It means that you can use whatever tactics you personally feel fit your audience to make the right recommendation and make the profit. 

However, it also means that there is no one guaranteeing that you receive the payment you agreed on, that the customers get the same product you were sent to promote, or that promoters actually use their test products to promote the company and not bash it into oblivion.

This can make some companies a bit nervous about getting involved in the tactic and can result in us influencers losing out on potentially amazing opportunities. 

However, that doesn’t mean all is lost in this wild west landscape of a marketplace. There are still certain steps that you can take to put your company’s mind at ease and create a population of well-intentioned and honest influencers to continue the trend.

How to Become Successful

The first thing you’ll need to do to become a success in the world of affiliate marketing will be to build your audience. Having a powerful and massive viewer base will make your influence undeniable for business owners.

It will also give new followers of your content a sense of confidence in what you have to say. Generally speaking, I found that people cared much more about what I had to say when I had hundreds of thousands of people already listening to me. 

However, once you’ve gained your audience, you need to work just as hard to maintain their attention and respect. This means that you’ll need to not only create consistent and worthwhile content but also promote products that make sense.

If you’re writing a blog about healthy eating and nutrition, accepting a deal with McDonald’s probably won’t go over well. On the other hand, if you have a mommy blogging channel on YouTube, then you should definitely think about taking on that Gymboree deal that came your way.

By carefully selecting the products that make sense for your audience, you can feel secure that they’ll be interested and invested in what you have to say. The more personal you make your promotion, the more likely you’ll be to see the type of engagement you were hoping for.

Show your viewers that this is a product you loved yourself and want to share so that they know you’re not only in it for the money. 

Affiliate marketing has become one of the best new ways for companies and influencers to promote products and earn massive profits along the way. However, because this is such a new and upcoming marketing technique, many laws and regulations have fallen a bit behind.

However, that doesn’t mean that you can just be lax and do whatever you want whenever you want. As an influencer, you have a social responsibility to make sure that your audience is exposed to products they’ll truly enjoy and that will help make their lives better in addition to helping make you the profits you need to continue. 

If you’re thinking about getting into the affiliate marketing business, make sure you keep this information in mind and remember to stay true to the brand you’re trying to create so that everyone from the businesses down to your individual viewer can all benefit together.