There is no doubt that social media influences are one of the hottest properties in marketing and brand promotion at the moment, with the ability to quickly reach thousands, hundreds of thousands, or even millions of engaged potential customers.
For those unfamiliar with social media influencing, it is the promotion (for cash or free goods/services) of a brand or products by people and celebrities with a large social media following on platforms such as Instagram, Twitter, Snapchat, Facebook and Youtube.
The value of the market for influencing has shown immense growth lately, with some influencers making hundreds of thousands of dollars for a single post or tweet. In addition to this, there are many influencers with tens or hundreds of thousands of followers making a living purely from posting content to social media. The growth in the practice, as well as concerns about consumers being misled into thinking posts are natural endorsements and not sponsored content, has led to social media influencing coming to the attention of advertising regulators in many jurisdictions, including the US and Australia.
In the US, the Federal Trade Commission (’FTC’) recently issued a series of warning letters to some ninety influencers, bloggers and celebrities, complaining about their endorsements on Instagram. The letter said that where there was a material connection between the product and the influencer with the product, that it should be ‘clearly and conspicuously disclosed’ unless it is already clear from the context of the post. Material connections would include monetary payment, the receiving of free products in return for an endorsement, or a business of family relationship.
The FTC went on further say that where there was such a material relationship, it should be accompanied by the use of a hashtag such as #ad or #sp, and that such a hashtag should be clear and not buried or overshadowed amongst other hashtags (of which Instagram, for example, permits 30) or statements. The FTC has not as yet taken action against any influencer or brand for not doing so, but the warning letters clearly show that that is a situation which may soon change.
In Australia, as of 1 March 2017, there has been a change by the Australian Association of National Advertisers to its Advertiser Code of Ethics (the ‘Code’) to try and ensure that advertising on social media is made easier to recognise. The new provision 2.7 states that “advertising or marketing communication must be clearly distinguishable as such to the relevant audience”.
The guidelines set out two criteria which should be considered to see whether a social media post would be advertising: “Does the marketer have a reasonable degree of control over the material; and does the material draw the attention of the public in a manner calculated to promote a product or service?”
If a social media post is found to meet the criteria of being advertising, then the AANA, similarly to the FTC in the US, suggests the use of a hashtag such as “#ad”. Also similarly to the FTC, the AANA is keen for influencers to avoid the camouflage of such a hashtag amongst many other hashtags or text. The emphasis is on making it clear to consumers about the relationship between the parties.
The Guidelines apply to cash deals, but also non-cash deals, or the receipt of free goods/services in return for a social media post. It is, however, worth noting that a reasonable degree of control over the material is needed for the guidelines to catch the post (such as the brand approving the picture/tweet/video, or setting out requirements for the use of the product). As such, if a good is simply sent to an influencer, with no obligation to use the product or highlight it on social media, then it is unlikely to be caught by the guidelines.
Should there be a complaint about a social media post by an influencer, it goes to the Advertising Standards Board, which can ask for the ad to be removed. It’s worth noting that the Advertising Standards Board is not a government or statutory body, and as such has no power to punish any influencer or brand, other than perhaps through the generation of negative publicity.
This information is intended for guidance purposes only and does not constitute legal advice.