It’s a common scenario – a brand sends out a bunch of sample packs of the brand’s products to popular influencers. Presumably, it’s with the view that someone with a degree of influence will try the product, like it and feel the need to talk about it to their engaged audience on social media. The desired result is then that their audience become new or heavier consumers of the brand’s products.
The question is, when a brand does this, are they effectively placing an advertisement for publication, and what level of responsibility do they have to ensure that the influencer’s resulting post complies with the law and relevant regulatory codes in Australia, particularly when the influencer is commonly left with the creative control of the post.
Ad Standards have received and considered several recent complaints involving posts by Influencers where the complainant has questioned whether the post is organic content, or content for which the Influencer has been provided with some incentive to post.
Complaints about sponsored posts have significantly increased since March this year after the AANA updated its Code of Ethics and Practice Note in February.
In recent months, the Ad Standards Community Panel have considered complaints involving more and more brands. This blog post discusses whether in those determinations, a brand has been found to have control over an influencer’s post.
Code of Ethics
First, a quick reminder about what the relevant codes in Australia say about distinguishable advertising.
Section 2.7 of the AANA Code of Ethics requires that “Advertising or Marketing Communication shall be clearly distinguishable as such”.
Accordingly, Ad Standards must consider the following two questions each time a complaint is made about an Influencer’s post where it is alleged that the post contains an advertisement for a brand:
- Does the material constitute an ‘advertising or marketing communication’, and if so;
- Is the advertising material clearly distinguishable as such.
Question 1 – Does the material constitute an advertising or marketing communication
When considering the first question, Ad Standards consider advertising to mean: “any advertising, marketing communication or 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 or oppose directly or indirectly a product, service, person, organisation or line of conduct”.
The question of what constitutes a reasonable degree of control is one that is frequently raised and causes confusion for many influencers, advertisers and agencies. A number of responses from advertisers when discovering they are the subject of a complaint have included that they did not have “control” over what the influencer actually posted (or whether they posted at all), and therefore argue that the influencer’s post falls short of the definition of advertising for which the Code of Ethics would apply.
Whilst there is not a lot of clear guidance in the Practice Note about what constitutes a reasonable degree of control, the threshold has been, in our opinion, quite low in the cases determined by Ad Standards to date. In many situations, simply gifting product to a well know influencer with no specific instructions about what to post, or whether to post at all, has been found to still constitute a reasonable degree of control over a subsequent post about that brand or their product or service by the influencer.
Question 2 – Is the advertising material clearly distinguishable as such
When determining whether the advertising material is clearly distinguishable as such, Ad Standards consider the following guidance set out in the supporting Practice Note for the Code:
“Influencer and affiliate marketing often appears alongside organic/genuine user generated content and is often less obvious to the audience. Where an influencer or affiliate accepts payment of money or free products or services from a brand in exchange for them to promote that brand’s products or services, the relationship must be clear, obvious and upfront to the audience and expressed in a way that is easily understood (e.g. #ad, Advert, Advertising, Branded Content, Paid Partnership, Paid Promotion). Less clear labels such as #sp, Spon, gifted, Affiliate, Collab, thanks to… or merely mentioning the brand name may not be sufficient to clearly distinguish the post as advertising.”
The important thing to remember about question 2 is that there is no specific wording required in Australia to make a sponsored post clearly distinguishable from another organic post on the influencer’s account. From a risk minimisation perspective, brands can take steps to ensure that the influencer’s posts are always clearly distinguishable. Utilising tools such as the branded content tools (where they are available on the platform), using hashtags such as #Advertisement prominently within the post and having an enforceable influencer agreement with relevant clauses around disclosure and amending posts where necessary can all aid in minimising risk.
Does the brand have control over the influencer’s post when no direction is provided?
Ad Standards was required to consider the issue of control when gifting without direction to post in detail following Tom Ford Beauty’s request for an independent review of the Ad Standard’s Community Panel decision about a recent post by an influencer about products sent to her for free by the brand. Their comments on this issue were as follows:
“The Panel noted that the Code does not define ‘reasonable degree of control’. The Panel noted that there is no indication of timeframes around which the advertiser can be seen to have control. The Panel noted that in the case of gifts to influencers the context in which the product is given cannot be ignored. The Panel noted that influencers operate as an advertising medium utilised by businesses to promote their brands and products. The Panel noted that many influencers have agents and that businesses exist which put brands and influencers in touch with each other. The Panel noted that influencers are sometimes paid, and sometimes provided with free product. The Panel noted that influencers’ posts may also be created in circumstances in which there is no relationship context. The Panel considered that the Code’s requirements should be interpreted with its purpose in mind, that is to ensure that consumers are informed, and that influencers should be transparent about their relationships with brands.”
“The Panel noted that the advertiser chose to send Ms Russian a gift knowing she was an influencer. The Panel considered that while there was no direct request or stipulation for Ms Russian to post about the gift, it is reasonable to assume that the motivation for an advertiser to provide free product to an influencer with whom they have a positive relationship is that they will post about the product or otherwise draw the attention of their followers to the brand as Ms Russian did in this case. The Panel considered that the advertiser has undertaken the activity of giving a gift to an influencer, and in choosing to send the gift they are exercising a degree of control, and the post did draw the attention to the product.”
It is interesting to note the comments in the case report that:
“A minority of the Panel considered that the advertiser did not have a reasonable degree of control over the advertisement as there was no formal agreement in place between the advertiser and the influencer about her posting the material. Further, a minority of the Panel considered that the advertiser did not request that the influencer post the product and did not have direct control over what was posted. The minority of the Panel considered that the influencer was in control of what was posted, not the advertiser.”
Despite the minority view, the Community Panel again considered that the post did meet the definition of advertising in the Code and found that the post was not clearly distinguishable as advertising.
What does this mean for influencer send-outs?
Your next brand send-out could result in a complaint to Ad Standards that you as a brand will have to deal with.
A good way to manage the risk is to have simple terms and conditions that you have your chosen influencers accept prior to sending out products. The next level down would be to send the gifts with clearly stated terms and conditions about disclosure if / when posting.
Why does it matter?
Complaints determined by the Ad Standards Community Panel are published on the Ad Standards website. Some of these then become the subject of news headlines which can cause reputational damage to the brand, the influencer and potentially the agency involved.
Further, should a breach of the Australia Consumer Law be identified, the brand, influencer and / or agency may find themselves facing any number of damages, injunctions, publication orders, remedial orders and in some cases pecuniary penalties, fines and infringement notices.
The loss of social media accounts can also flow from a breach of the platform terms of service.
For more information about the legal aspects of your influencer marketing strategy, including your influencer send-outs, contact us.
Information contained within this blog post is intended to be general information only and is not in any way intended to constitute legal advice. You should not act or rely on any information found in this blog post without obtaining prior advice specific to your circumstances.
