How do I properly label affiliate links?

 How do I properly label affiliate links?

How do I properly label affiliate links?
How do I properly label affiliate links?

How do I properly label affiliate links?

 An affiliate link is a partner link that serves as the basis for commission payments for referrals. When a visitor clicks on an affiliate link on a website, they are redirected to the advertiser's website, and in return, the advertising partner (affiliate) receives a referral commission. By using a unique code integrated into the link, the advertising company can determine which affiliate partner referred the customer.

 Affiliate marketing is a persistent trend in online business. Website owners, in particular, use affiliate links as a source of monetization. But what is an affiliate link exactly, and more importantly, do affiliates need to label their affiliate links as advertising? And if so, how should affiliate links be labeled correctly? In this founder FAQ, we explore these and other questions related to affiliate links, affiliate marketing, and advertising disclosure. Some of the topics covered include:

  • What are affiliate links?
  • How does one become an affiliate?
  • Do affiliates need to label their links?
  • Should an affiliate link be labeled as advertising?
  • How should affiliate links be properly labeled?
  • How can affiliate links be protected?


Definition: Affiliate Links

 But what exactly is an affiliate link? An affiliate link is not just any link. No, it is a partner link that forms the basis for commission payments for referrals. Each affiliate link includes a special code. With this unique affiliate link, an advertising company can identify which advertising partner, known as an affiliate, referred a customer. 

 By using the affiliate link, the partner company can identify the affiliate. There are different commission models based on various conditions. Depending on the model, the commission may be calculated for a simple click on the affiliate link, and the submission of customer contact information, also known as a lead or a sale.


Do you have to label an affiliate link as advertising?

 Initially, as an affiliate, one is interested in ensuring that their link doesn't appear to be advertising or easily recognizable as such. However, there is a general obligation to label commercial communications on the Internet. 

 This obligation can be found in § 6 (1) No. 1 of the Telemedia Act. Why? Well, the visitor or reader should be able to clearly distinguish between what is advertising and what is not. In other words, the rule is meant to ensure a clear separation between advertising and editorial content. This is to protect the user from interpreting veiled advertising measures neutrally or "incorrectly" and making decisions, such as making a purchase, based on this incorrect information that they might not have made otherwise.


ARE AFFILIATE LINKS CONSIDERED ADVERTISING?

 But does this apply to affiliate links, or are they considered advertising? Well, labeling is necessary when affiliate links fall under the definition of advertising. Advertising is generally understood as the dissemination of information to the public or selected target groups by profit-oriented companies or individuals, with the purpose of promoting products and services or maintaining the image of companies, products, and services.

 An affiliate link points to an external offering by a third party and is intended to expand the reach of that third party on the internet. The third party aims to generate interest in its product beyond its sphere of influence and acquire new customers through the link. Therefore, an affiliate seeks to promote the sales of a third party by placing the link. In return, they receive a commission from the third party for successful transactions. This corresponds to the previously mentioned definition of commercial communication, in other words, advertising.

 So, the answer is quite clear: Yes, you must label an affiliate link as advertising.


EXCEPTIONS FROM THE LABELING REQUIREMENT:

 In rare exceptional cases, it may be different if the commercial nature of the affiliate link is recognizable as advertising even without labeling. This applies, for example, to pure price comparison websites. However, since mistakes in labeling are always at the expense of the affiliate, the rule of thumb is: better to label too much than too little! Violations of the labeling requirement are considered violations of competition law and can lead to warnings.


How do you properly label affiliate links?

 It's all well and good to know that you should label an affiliate link, but you might ask: Where is the "how" regulated? To put it mildly: It's not regulated at all. There is, as of now, no law that specifies how to properly label an affiliate link. This makes the matter of labeling as advertising quite tricky, as you don't want to risk receiving a warning. It's important that even an inexperienced internet user can understand the meaning of the link.


EXAMPLES: HOW YOU CAN LABEL YOUR LINKS

 Not labeling affiliate links is by no means an option and could be costly for you. Therefore, we've selected a few examples of proper labeling for you:

  1. Asterisk (*): In most cases, an affiliate link is simply labeled with an asterisk (*). In addition to the asterisk, a notice must be placed on the website explaining the meaning of the asterisk. This notice must be prominently displayed. Although this approach is widely used, it has not been conclusively determined in court whether it is sufficient as labeling.
  2. Explicit Notice: On the other hand, it is legally secure to place a notice such as "Advertisement" or "Ad" directly next to the affiliate link. It may also be a good idea to label the entire article or individual text blocks as advertising. Even better, you can highlight the text block with the affiliate link, for example, with a frame, and include an additional notice.
  3. Banners: Banners generally do not need to be labeled as advertising since they stand out visually and usually have a strong promotional effect, even without notice. Nevertheless, you can take an extra precaution by placing a notice above or below the banner.


How to Shorten and Protect Your Affiliate Links:

 Another important topic in this context is the protection of affiliate links because these links are often awkwardly long. Protecting affiliate links is a method for shortening unwieldy, lengthy links. 

 Using a so-called URL shortener, you can convert ugly links into short ones. In professional jargon, this is called "link cloaking." Many affiliates employ this strategy because security is a critical success factor in affiliate marketing. Protecting links is essential for two main reasons:

  1. Whenever you send a long affiliate link to your customers, they will immediately recognize that you are promoting another person's product. This is already obvious through the labeling of the affiliate link. However, when typing a long link, errors can often creep in, potentially costing you valuable buyers and a portion of your commission.
  2. In the worst case, you could become a victim of so-called "internet pirates" who have their eyes on your affiliate link. They might steal your link, and as a result, you might not receive any commission. Unfortunately, this is not an uncommon situation.

Therefore, make sure to not only label your affiliate link correctly but also shorten it.


Conclusion: 

 Labeling affiliate links is a sensitive topic. In practice, many affiliates forget to label their links or do not do so because they fear a loss of sales. However, this fear is unfounded. 

 Affiliates who label their links are often rewarded by users and seen as more trustworthy. Moreover, legal warnings can be a costly affair. Therefore, the proper labeling of an affiliate link is important and should not be taken lightly.


Frequently Asked Questions (FAQ) on Properly Labeling Affiliate Links

How does an affiliate link work?

 When a visitor clicks on an affiliate link on a website, they are redirected to the advertiser's website, and in return, the affiliate, as the advertising partner, receives a referral commission. By using a unique code integrated into the link, the advertising company can determine which advertising partner referred the customer.


How do you obtain affiliate links?

 To obtain an affiliate link, one must apply or register with a provider or portal for affiliate marketing. Well-known providers include Amazon and Toys"R" Us.


Do you need to label an affiliate link?

 According to the Telemedia Act, advertising must be labeled accordingly. Affiliate links also fall under advertising, at least when the affiliate receives a commission from a third party.

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