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#Ad: The New Rules of Social Media Advertising That Influencers Need to Know

  • 26 June 2022
  • Studio Legal

Written by Alyce Evans and Jennifer Tutty, Principal

They say a picture tells a thousand words. However, in 2021, you may have to include a #Ad if you want to stay out of trouble. In the world of social media and influencers, it’s becoming less clear what is an ad and what is genuine (‘organic’) content.

Does your favourite food blogger really love that new brand of chilli oil, or have they been paid to act like they do?

What is the AANA Code and What Does it Mean for Social Media?

In February 2021, the Australian Association of National Advertisers’ (AANA) new Code of Ethics came into force. Its purpose is to ensure that any advertisements or marketing communications are legal, honest and truthful.

If an influencer is posting content as marketing for another brand, company or individual, and receiving a benefit for doing so, then they must label this content as advertising.

Who does the Code apply to?

The Code applies to all forms of content across the Internet, print media, cinema, radio, television, direct-to-consumer media, billboards and more. It also covers new and emerging technologies, taking into consideration our rapidly evolving digital world.

This means that yes, it does apply to social media influencers using Instagram, Twitter, Facebook, Tik Tok, Twitch or other social media platforms.

Across social media platforms, an ‘influencer’ is typically someone whose profile is followed by anywhere from thousands to millions of people. When they share content, their wide audience of followers sees it. Consequently, brands have caught on to the major marketing potential of paying for a sponsored post on one of these profiles. This has created a new stream of income for popular influencers, who can command large sums of money or free products, in exchange for a post on their profile.

How to Comply with the Code

If you’re an influencer and a company slides into your DMs offering to pay you to post about their products or services, then the Code of Ethics will apply. You will need to make it clear and obvious to your followers that the content is the product of your commercial arrangement with the brand.

What if you’re receiving free products, not payment, in exchange for your posts?

If a company sends you free products or gifts in exchange for a post on your profile, then you have received a benefit for posting that content. In this scenario, the Code of Ethics also applies.

Essentially, if your content is being posted to promote a product or service, you’ve got yourself an ad.

What if you genuinely like the products?

Although genuine interest in the products is important for transparency and honesty with your followers, it is not relevant to whether or not you have breached the Code.

If a brand gives you free products or pays you to post about them, it doesn’t matter to the AANA whether you actually like them. If you like a product that a company pays you (in money or products) to post about, it’s an ad and will need to be disclosed.

However, if you post about a product with no influence or communication from the brand to do so, this might be ‘organic’ content, as opposed to an advertisement. There is a fine line to this, so you will need to make sure you are not receiving any benefit from the brand in exchange for these posts.

Do you have to write #Ad?

The Code indicates that influencers must clearly distinguish any content that is the product of a commercial arrangement with a brand.

Previously, the AANA applied a ‘relevant audience’ test. This meant that influencer content would not breach the Code if it was likely that their followers would be aware that a post was paid for. This applied even if the promotional nature of the post was not explicitly stated. This test no longer applies.

As a result, influencers must be more transparent and active in disclosing any branded content as such. The safest way to label any sponsored or branded posts is with the hashtag #Ad. The AANA notes that other labels such as ‘Advert’, ‘Advertising’, ‘Branded Content’ and ‘Paid Partnership’ may also meet the Code’s requirements.

The key criterion is transparency. Your must be clear, honest and upfront about any relationship or arrangement you have with the brand. Ambiguous labels such as ‘sp’, ‘Spon’, ‘gifted’, ‘Affiliate’, ‘Collab’, ‘thanks to’ or a mere link or mention of the brand’s name are unlikely to meet the requirements of the Code.

It is also important to note that social media platforms may have (or create in the future) their own rules regarding promotional posts.

If you are collaborating with a brand or acting as an ambassador, you might be able to use labels to this effect. However, any labels must accurately describe the arrangement you have entered. If in doubt, add in a #ad (or another similarly clear label).

Hidden Hash Tags

Although it may be tempting to bury these hash tags within a bundle of others or at the end of a long post, this may land you in hot water. The AANA notes that ‘hidden disclosure’ is a no-go. Its important to place your ad disclosure somewhere visible and clear, such as at the beginning of a post, video or on the image itself.

What Happens if you Ignore the Code?

In Australia, the advertising industry is self-regulated by Ad Standards. The Ad Standards panel will use the AANA Code to rule on any complaints regarding non-compliant content.

As Ad Standards is not a court or government regulator, it doesn’t have the power to punish influencers who flout the rules. However, this does not mean that the Code can or should be ignored.

Reputational Damage

Ad Standards publishes its rulings to the public and in some instances will forward cases to the media. Effectively, the influencer will be named and shamed.

In the world of social media, followers expect authenticity and transparency, so failing to disclose promotional content may lead to a loss of followers. This reputational damage may have a flow-on effect, with brands refusing to work with influencers who have been called out by the media for deceptive advertising.

The AANA Code and ANNA (Heinrich)

Recently, the advertising regulator demonstrated that it’s taking these new rules seriously, ruling that an Instagram post of former Bachelor winner, Anna Heinrich, had breached the AANA Code. The post featured a photo of Anna in a Runway The Label gown. Although Anna’s post tagged the brand, Ad Standards ruled that this wasn’t enough to disclose the content as a paid advertisement.

Potential Penalties under Australian Consumer Law

Although Anna may not have been penalised for her behaviour, others may not get off so easily. In regards to the Code, its not simply a matter of post now, apologise later.

If a complaint is raised to Ad Standards, the panel may report it to the relevant government agency or industry body. This includes the Australian Competition and Consumer Commission (ACCC), which enforces the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010 (Cth).

Under the Australian Consumer Law, advertising must not mislead or deceive consumers. If an influencer doesn’t disclose content on their profile as an ad or sponsorship, this could be misleading or deceptive conduct. If so, they may be found in breach of the Australian Consumer Law and liable to pay a significant fine.

Although the ACCC hasn’t brought any charges against influencers not disclosing their content as an advertisement, it may do so in the future.

With the risk of breaking the law, significant fines and potentially irreversible reputational damage, #transparency is likely to become the new normal for influencers across Australia.

Studio Legal’s Top Tips to Follow the AANA Code of Ethics 

1. If a brand offers to pay you to promote its product on your social media, the AANA Code of Ethics applies.

2. Creating content under a commercial arrangement with a brand? You need to make this clear and obvious to your followers.

3. Receiving free products or gifts in exchange for a post? The AANA Code of Ethics applies.

4. For influencers, there is a fine line between posting ‘organic’ content about products you like, and advertising. If you’re receiving a benefit from the brand for making the post, it’s an ad.

5. Even if you genuinely like the products or brand, if you’re posting about them under a commercial arrangement with that brand, this is an ad and needs to be disclosed.

6. #Ad is likely to meet the Code’s requirements.

7. Other labels such as ‘Advert’, ‘Advertising’, ‘Branded Content’, ‘Paid Partnership’ may meet the Code’s requirement.

8. Ambiguous labels such as ‘sp’, ‘spon’, ‘gifted’, ‘affiliate’, ‘collab’, ‘thanks to’ or tagging the brand are unlikely to meet the Code’s requirements.

9. Hidden hash tags and burying the disclosure at the end of a long post or in a bundle of multiple hash tags won’t meet the Code’s requirements.

Written by Alyce Evans and Jennifer Tutty, Principal

Further Information

If you have any legal questions relating to influencers, social media or advertising, please contact us through our online form or via email at hello@studiolegal.com.au.

DISCLAIMER

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. Please see the full disclaimer in our website terms. Please contact Studio Legal if you are seeking advice about a specific legal matter.