With the increased use of social media, businesses have shifted from more traditional types of marketing and advertising into the digital environment, with integrated or native advertising, blogs and social media forums to promote their goods and services. With this, businesses are increasingly turning to influencers to play a larger role in their social media strategies as part of their brand campaigns to help increase audience engagement. In this context, consumers can often find it difficult to determine what is advertising and what is not.
In this article, we look at the new AANA Standard which is likely to have a significant impact on those businesses that use influencers to promote their goods and services on social media and provide some tips to help businesses that engage influencers comply with their obligations, including their obligations under Australian Consumer Law.
The New Standard
The Australian Association of National Advertisers (AANA) has released a new standard to be inserted into the AANA Code of Ethics with effect from 1 March 2017 to include an explicit provision that:
"Advertising or marketing communications shall be clearly distinguishable as such to the relevant audience" (Standard)
The AANA's stated intention of the Standard is to ensure that (amongst other things) the typical consumer is able to distinguish between marketing communications and editorial online content. The Standard has been released alongside a guideline (which can be viewed here) to assist companies in meeting their obligations with respect to the Standard.
What type of advertising will the new Standard apply to?
The Standard will capture all advertising and marketing communications i.e. any material which is published or broadcast using any medium or any activity which is undertaken by, or on behalf of an advertiser or marketer, over which the advertiser or marketer has a reasonable degree of control, and that draws the attention of the public in a manner calculated to promote a product, service, person or organisation. The Standard will not apply to labels or packaging for products, corporate reports, press releases (or the like) and, in the case of broadcast media, any material which promotes a program or programs to be broadcast on that same channel or station.
Interestingly, the advertising or marketing communication does not require payment to be made for the broadcast or publication of the material for it to be captured under the Standard, but will apply equally where other arrangements have been made in place of direct payment. In the context of influencers, for example, where the business provides free product to the influencer in exchange for the influencer posting blog content to promote the goods or services of the business.
In addition to the Standard, under Australian Consumer Law (forms Schedule 2 to the Competition and Consumer Act 2010 (Cth)) there are prohibitions on engaging in misleading and deceptive conduct, making false representations and making false testimonials or false statements about testimonials. These laws apply to social media in the same way that they apply to any other advertising, marketing or sales which is undertaken by a company. For example:
- exaggerating a benefit of a product or service;
- not disclosing all relevant terms and conditions in relation to an offer;
- making a false representation that goods or services are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;
- making a false representation concerning a testimonial or a representation that purports to be a testimonial in relation to goods or services;
- making a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits or using an image of a well-known character or person, when you don’t have the rightful owner’s permission to use that well-known character or person’s image.
Importantly, businesses can also be held liable for misleading and deceptive conduct and for making false representations in respect of comments made by others on the social media site of the business, for example, comments made by influencers on the social media site of the business or customers' blog posts.
A breach of the Australian Consumer Law provisions may result in enforcement action by the Australian Competition and Consumer Commission (ACCC) and/or third parties who have been effected by such conduct, and can include court proceedings, penalties of up to $1.1 million for businesses and adverse publicity as well as a requirement to withdraw or remove the advertising and marketing content.
What will the Standard mean for those businesses that engage influencers?
Businesses will need to ensure that, when engaging influencers and where the business retains reasonable control over the content to be posted or published, that the content is clearly distinguishable as advertising or marketing content to the relevant audience.
In addition, businesses will need to ensure that all information in any marketing and advertising is a current and accurate reflection of the influencer's opinion on the product or service and otherwise complies with the Australian Consumer Law.
Tips to help businesses comply
Businesses should develop a social media policy for any influencers engaged by the business. The policy should set out the expectations of the business as to what is acceptable and unacceptable behaviour in relation to social media use and comments in respect of the social media sites of the business, as well as the individual’s social media sites when referencing the business, brand, product or service.
For example, ensure that any influencers DO:
- Disclose that they are an influencer of [x business] in all work where they are referring to the business, any brand, product or service of the business by:
- Including a disclosure #ad in all social media posts in a prominent position on any advertising or marketing communication;
- Prominently disclose that they are a 'paid [X business] influencer' in all social media blog posts or if not paid, the nature of the commercial arrangement;
- provide current and accurate information;
- ensure that any post refers to a product or service that they have used and have a genuine association with – ensure that they only post about what they know and assess the product/service honestly;
- check that the overall impression of the message is accurate;
- clearly disclose any important limitations or exemptions (if relevant);
- consider the audience - ensure that any messaging is not false, confusing, misleading or deceptive and it is presented in a way that is clearly understood by the relevant audience;
- closely monitor their posts and immediately remove any comments or posts from other persons that may be false, misleading or deceptive; and
Ensure that any influencers DO NOT:
- overstate the results of their experience with the product or service;
- suggest or imply that they are authorised to speak on behalf of [X business], nor represent that they do so; or
- suggest or imply that they have no commercial relationship with the business when they do.
Businesses should closely monitor influencer posts on their social media sites (and any customer posts) and immediately remove any comments or posts from persons that may be false, misleading or deceptive or that do not accurately reflect the nature of the relationship between the influencer and the business.