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December 10, 2018

Even Angels Quietly Make Money Referring Buyers to Sellers

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 6:09 am

Last week, we told you about network TV morning news and talk shows receiving “secret” payments when they plugged particular products in deal segments on their programs.

The concept of affiliate marketing — where sites get small commissions for referring their readers to sellers — is almost as old as the Internet itself. When a reader clicks a link to a seller on a website, it may be specially coded to identify what site referred the potential buyer.

You might be surprised who is using affiliate links now — Oprah and even Consumer Reports.

Our own Consumer World website uses affiliate links sparingly and has for years, usually in conjunction with a bargain. But, unlike virtually any other site, we flag each such affiliate link’s description with two hot green plus marks (++). And those plus marks lead readers to a clear but small disclosure at the bottom of the page explaining that we may earn a commission if you make a purchase from that link.

*MOUSE PRINT:

Consumer World affiliate disclosure

There is nothing inherently wrong about a publication entering into affiliate relationships with sellers as long as it doesn’t affect the editorial process. The question is, how well disclosed is that financial connection to readers? The FTC’s endorsement and testimonial guidelines require clear disclosure when a product reviewer has a financial connection to the product shown. We all could do better on disclosure.

 

Consumer Reports

While preparing last week’s Consumer Reports section of Consumer World (for which we receive no money), MrConsumer noticed a surprising disclosure in their “Top Gifts Under $50” story. The piece highlighted various products that rated well in Consumer Reports tests and provided direct links to the sites where they could be purchased. What was unexpected was a disclosure in tiny print at the end of the story.

*MOUSE PRINT: [highlighting added]

affiliate disclosure

Yes, even Consumer Reports, famous for not accepting advertising, buying all the products it tests instead of accepting free samples, and having a strict noncommercialization policy, makes money referring readers to sellers of the products it features in some stories.

We asked the organization, particularly given its sterling reputation and image, why they would virtually hide a disclosure like that in the smallest possible type. A spokesperson for them responded in part:

“Consumer Reports recently added new retailers to its shopping program, making it easier for consumers to buy rated products from a variety of online retailers while they’re researching them on ConsumerReports.org. At the time, we elevated our shopping disclaimer to the top of the page. We also have another disclaimer at the bottom of the page that links to the About Us section of our website where people can find additional information about our Commercial Partnerships.”

The November 30th story with the tiny disclosure only at the bottom apparently was an update of a previous story before the format change and therefore only had a disclosure at the end.

And as to why Consumer Reports makes the disclosure in such small type even when it appears on the top, the spokesperson said, “I have no answer for that.”

 

O – The Oprah Magazine

Oprah's Favorite ThingsAnother angel in the public eye is Oprah. We told you last week that historically, products that appear on her “Oprah’s Favorite Things” list of gift ideas have been chosen based solely on their merit. And we can confirm that is still the case after speaking to a product maker who has appeared on the list.

But does this mean that she or her magazine have not figured out a way to capitalize on the list? Not quite.

What O – The Oprah Magazine doesn’t talk about too prominently on its website is the fact that they have an affiliate relationship with the primary seller of the items on the list — Amazon. Click one of the “buy at Amazon” links in the story and if you buy the item, ca-ching for Oprah’s folks.

And as they say in a famous Seinfeld episode, “not that there’s anything wrong with that.”

Except for this. It is only at the very end of the page of this year’s list, just above the Hearst copyright, that this tiny disclosure appears (in one very long line that we had to divide in half to fit here):

*MOUSE PRINT:

O Magazine disclosure

In conjunction with our story last week, we asked the editor of Oprah’s magazine a variety of questions including how its affiliate relationship with Amazon worked. We did not get a reply. Twice.




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December 3, 2018

Network TV Shows Get “Secret” Payments for Hyping Products

Filed under: Internet,Retail — Edgar (aka MrConsumer) @ 5:29 am

Pressed for time? Read the shorter news release version here.

When you see a news story online or a feature segment on television about a product or service, you never expect the media in which it appears to have a financial interest in it.

The trouble is, today there are hidden financial connections between media outlets like TV networks, and outside commercial entities selling products or services. What appear to be regular informational segments on TV shows sometimes are really advertising in disguise. Consumer World has been investigating these secret connections for over nine months, and today reveals some of the surprising findings.

The issue is evident most clearly in “deal” segments run by the major TV networks several times a week. For example, Good Morning America (GMA) airs a popular Steals & Deals feature, and The View broadcasts “View Your Deal” twice a week. In these segments, show hosts or guest presenters demonstrate and tout five or six products that viewers can purchase for a limited time at deep discounts. And many are genuine bargains.

Oprah's Favorite ThingsThe products offered are unrelated to each other, but may be grouped together under a theme such as summer beach bargains. The theme of two recent deal segments involved “Oprah’s Favorite Things 2018.” That is an annual list of products that Oprah recommends in her magazine and through her surrogates in television segments as worthy products and gifts. In no way are we suggesting any wrongdoing by Oprah or the products that make her list. We are using it as just one example of the type of bargain segment that network programs are broadcasting.

Some media outlets have figured out a way to capitalize on the list. It is all done very quietly, without prominent disclosure to the viewer that the programs are making money directly or indirectly from the sale of these products.

Good Morning America

In early November, ABC’s GMA featured in a Deals & Steals segment a first look at six of Oprah’s Favorite Things for 2018, and offered them at deep discount:


Deals & Steals segment on ABC’s Good Morning America

There is no oral disclosure anytime during the segment that ABC has a financial arrangement to be paid by the makers of the products they are demonstrating. Only at the very end of the segment does any disclosure come up:

*MOUSE PRINT:

GMA disclosureDisclosure on ABC’s Good Morning America

“Promotional consideration” was provided by the six companies whose products were featured on the program. Normally this means that products were provided to the program to give to audience members, which did occur in this instance.

But segments like this are no longer just about touting deals to viewers and giving free merchandise to audience members. They are now about the program quietly receiving money based on the actual sales of the products promoted on the show. How do they do this? Viewers are sent to a special website created just for the show with these items, or to the show’s own website, and if they click on the special link provided and buy the item, the show gets a commission.

How do we know this? Certainly not from watching the program. It is only on the special GMA website (GMADeals.com and GoodMorningAmerica.com/shop) that there is an added disclosure:

*MOUSE PRINT:

GMADeals footer
Disclosure at GMADeals.com that ABC receives a fee on purchases

This is a bit different from the disclaimer at the end of the TV segment because it clearly says that if you buy the featured products, ABC is going to receive compensation. This is not an isolated incident.

The View

ABC also features bargain segments like this on The View. That program cleverly uses a vague oral disclosure at the beginning of the segment that says “We’ve partnered with vendors for at least half off.”

At the end of the Oprah’s Favorite Things segment on The View in early November there is a disclosure in the credits that the brands shown in that segment paid ABC “promotional and financial consideration.”

*MOUSE PRINT:

The View creditsDisclosure in credits on ABC’s The View

This does not clearly communicate to the average viewer that The View gets a cut of every item sold. Like GMA, The View sends shoppers to a special website (ViewYourDeal.com) where they can purchase the items shown. It is only there that the viewer first learns that ABC is going to be paid money when a purchase is made.

This sounds very much like an affiliate relationship whereby a reader clicks a product link on a website and is taken to the actual seller’s website. The website owner who referred the sale to the seller gets a small commission if a sale is actually made.

In ABC’s case, the concept of affiliate marketing has been transformed for use on a television program. If you buy an item you see promoted on the show, the program gets a commission. Clever. Very clever.

The Today Show

ABC is not alone in quietly collecting affiliate-type commissions. On NBC’s Today show, viewers are only let in on the secret via an explicit but fine print disclosure on a cluttered screen at the end of their Steals & Deals segments. They make no disclosure of the payments on their special website, deals.today.com, however. See sample segment.

*MOUSE PRINT:

Today disclosure
Disclosure at end of Today’s Steals & Deals segment

The Law

Under the FCC’s “payola” rules, if a program’s producers receive payment to feature a product, that fact must be disclosed to viewers during the program. Similarly, the FTC has two sets of advertising guidelines. They both require clear and timely disclosure: (1) if there is any financial connection between a presenter and the products being touted (endorsement and testimonial guidelines) and (2) if the presentation looks like a regular part of the program but is in fact commercial in nature (native advertising guidelines). Of particular relevance is the FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements.

We asked Disney-ABC’s PR folks four times to explain the differences between “promotional consideration” and “financial consideration,” who pays whom when these segments are aired, and whether ABC makes money in an affiliate-like relationship based on the number of products sold. Despite these repeated requests to representatives of both GMA and The View, no response was received.

However, a vendor whose products have appeared in a previous GMA Deals & Steals segment confirmed to Consumer World that ABC uses a commission structure whereby it receives a percentage of sales.

NBC did not respond to two inquiries.

The disclosures the networks make come too late and are couched in industry jargon. Viewers have a right to know upfront in clear and unambiguous terms that they are really watching an ad, that the networks are making money on each sale, and that the gushing product comments of the show’s presenters could be influenced by the networks’ likely desire to maximize commissions.




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November 26, 2018

Your Frozen Turkey Was Probably 10% Water

Filed under: Food/Groceries,Retail — Edgar (aka MrConsumer) @ 5:52 am

Anyone who has cooked corned beef from a Cryovac package knows that it shrinks up to nothing after boiling. And ham often suffers the same fate. In prior stories we have explained that both corned beef and ham are often injected with up to a 35% water and salt solution. Nothing like paying meat prices for water.

Now we turn to turkeys. At least in Boston, turkeys were offered at a giveaway price this year — 39 cents a pound — at a number of major chains. And at least one store did not require a $25 minimum purchase to snare one at that crazy low price. To MrConsumer’s surprise, however, all the 39-cent turkeys had been bulked up with “solution,” like a body builder on steroids.

*MOUSE PRINT:

Turkeys injected with solution

Various brands checked had all been injected with 9.5 percent water, salt, sugar, and flavoring. This is really nothing new, but it just wasn’t as obvious before (including to MrConsumer). Why? There was a change in USDA labeling rules as of 2018 that makes the presence of solution hard to miss. Now the added water weight must be disclosed in type at least 1/3 the size of the name of the product.

Why is solution even there to start with? Certainly there are sensory benefits to having turkeys pre-basted to make them more moist. And no doubt the companies make extra money by fattening up the birds with water.

Thank goodness it is only 9.5%, and not 35% as with other meats.




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November 19, 2018

Clorox Splashless Is Also “Disinfectless”

Filed under: Food/Groceries,Health,Retail — Edgar (aka MrConsumer) @ 8:48 am

A Missouri consumer is fed up with Clorox brand bleach. She has been waging a three-year long campaign against one of the company’s most popular products that she thinks is being packaged and marketed in a deceptive way. We think she has a point.

There are two primary types of Clorox bleach:

Clorox bleaches

The one on the left is regular Clorox and the one on the right is their “splashless” version. Note how similar the labels are.

According to the company, they came out with a thicker splashless variety because customers complained about the regular type which could inadvertently splatter where it was not intended.

As it turns, that is not the only difference between the two products. Only on the back of the label does the company disclose the following about the splashless product:

*MOUSE PRINT:

Clorox Splashless disclaimer

That’s right, surprise, the splashless version does not disinfect or sanitize. And while certainly many use bleach merely to whiten their laundry others do expect it to sanitize also.

A check of the ingredients statements also reveals a surprise.

*MOUSE PRINT:

ingredients

While the exact amount of the disinfectant, sodium hypochlorite, is stated on the regular product, it is conspicuously missing on the splashless variety. One might reasonably conclude that there is not enough of the active ingredient in the splashless product to sanitize or disinfect properly.

We asked The Clorox Company why they don’t more conspicuously disclose that the splashless variety does not sanitize or disinfect and why the amount of the primary active ingredient is not disclosed. The company did not respond to our questions by publication time.




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November 12, 2018

Slick Olive Oil Label Designed to Deceive

Filed under: Food/Groceries,Retail — Edgar (aka MrConsumer) @ 5:56 am

Most shoppers don’t spend a lot of time scrutinizing product labels in the supermarket. And that might be what one manufacturer is counting on.

In what appears to be one of the most deceptive labels ever, this extra virgin olive oil brand seems to be deliberately trying to put one over on consumers.

Iberia full bottle

Only on closer inspection does the true nature of this product reveal itself:

*MOUSE PRINT:

Iberia oil closeup

You will have to look closely at this picture taken from the Target website. It reveals in thin black type on a dark green background that the content of the bottle is really “sunflower oil and extra virgin olive oil.” How diluted with sunflower oil is this product?

*MOUSE PRINT:

Iberia ingredients

Look carefully. This product is really only 20% extra virgin olive oil and the rest is sunflower oil.

Now, the front of the product does say “premium blend” but that does not clearly convey the true nature of this product in MrConsumer’s view. One might believe this means, for example, that it is a blend of various extra virgin oils from several regions.

So how does this company get away with a label so seemingly deceptive? No one had gone after them — until last month. A New York law firm just filed a class action lawsuit against the company alleging that its label is violating the deceptive practice consumer protection laws of all 50 states. Among the claims being made is that the product is not delivering the expected health benefits that purchasers expect because it is not 100% olive oil.




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