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May 6, 2023
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Influencer marketing involves brands collaborating with influencers or content creators to reach a wider audience through social media. This strategy has become widely popular amongst businesses who seek to promote their products and services in a quick and efficient way, while reaching widespread audiences.
However, the Australian Consumer Law (ACL) acts as a safeguard for consumers by restricting misleading and deceptive trading practices, and further provides remedies for consumers who have suffered as a result of such conduct.
Influencers are legally required to disclose any commercial partnerships if they are endorsing a brand’s product. Advertisements should clearly mention words such as ‘sponsored content’ or #ad so the consumer can make an informed decision about the product or service being promoted.
So, it is imperative that social media influencers and brands are aware of their legal obligations associated with marketing and trading in order to avoid any ramifications that may subsequently arise from their misleading or deceptive conduct.
How to Prevent False Advertising
A lot of influencers promote products and services on their social media channels, e.g., Instagram, YouTube, and TikTok. Companies consider influencer brand deals a successful way of marketing as they reach untapped markets by exploiting the loyalty of a content creators’ followers.
As an influencer, incorporating a brand deal into your other original content is a relatively seamless process. While you may have to think of creative ways integrate sponsored content into your daily posting routine, brand deals are a great way to make money and often, help your followers get a percentage off the original price of a product. Needless to say, it is important to ensure that the values held by the brands that you work align with yours, as the products and services you promote will inevitably shape your public perception.
Likewise, such products and services can taint your reputation, and things can easily go downhill if influencer advertisements are not posted in compliance with the ACL. It is the consumer’s right to know that content falls under paid sponsorship or partnerships. If the influencer fails to specify the commercial nature of the partnership, they can be reported for misleading and deceptive conduct and their brand will suffer as a result.
In simpler terms, any paid, business-related endorsement by influencers should be clear, upfront, and obvious to viewers. Consumers should not be under the impression that the content being promoted by their favourite influencers is completely authentic and free of bias if in fact, the influencer is getting paid to advertise a product or accept gifts or services.
At the end of the day, the purpose of these regulations is to maintain a level of trust between the creator and the audience.
Use the Right Labels
It is integral for content creators to remember that they need to be honest with their audience to dodge any legal consequences. The relationship between the influencer and the brand must be made apparent with labels such as ‘Advert’, ‘#ad’, ‘Advertising’, ‘Paid Partnership’, ‘Branded Content’, and ‘Paid Promotion’.
The use of misleading labels like Spon, ‘#sp’, ‘Collab’, ‘Affiliate’, ‘gifted’, or simply stating the brand’s name is not sufficient to inform the audience of the nature of the post. Influencers should also use the paid promotion tag in their Instagram post and refer to their sponsorship in the caption of their ad. They can do it in their own unique way but should ensure that the partnership is explicit and that the post is easy for the audience to understand.
Code of Ethics
The Australian Association of National Advertisers (AANA) is a national body responsible for the regulation of responsible advertising to ensure honest marketing practices and protect consumer rights. In essence, these regulations exist to protect the end customer from fake reviews or false marketing practices by promoting transparency so that marketers can fairly endorse products.
With a growing trend of influencer marketing, the AANA has established certain ethical codes. Influencer marketing is predicted to reach $15 billion by December 2022. The Code of Ethics was introduced based on the Australian Consumer Law. Rulings by Influencer Advertisement Standards are formulated according to consumer complaints.
The code applies to any material that draws the public’s attention in regards to the promotion or opposition of a service, product, or brand in Australia. It includes all marketing or advertising communication in the advertiser’s control which can affect a potential consumer of the service or product. It also applies to infomercials, advertorials, sponsorship announcements, and user-generated content communicated on a digital platform.
The Code is aimed toward both the influencers and brands, so both should be aware of the Code. Influencers need to make sure they go through the agreement of the partnerships with the brand. If the brand has asked an influencer not to disclose within their posts the commercial nature of the endorsement, then there is a serious breach. Both parties need to understand their legal obligations and lay them out in the agreement.
Who Can Report?
All Australian citizens have the right to report to AANA any dishonest advertisement that violates the Code. The content creator will have to remove the post or make changes to the advertisement. This is why both parties involved should be familiar with the details of the Code of Ethics before entering into a partnership.
Additionally, the ACL provides that misleading advertisements can attract penalties upwards of $500,000 for content creators and over $10m for corporations.
Although, The Code cannot be enforced in the same way as the Australian Consumer Law. There are no financial penalties for violations as per the 2021 Code, but there can be other consequences. Content creators heavily rely on their public image and following to gain popularity. If there is an instance in which a breach of the code by the influencer is publicised, it can tarnish their career and even damage the reputation of the brand involved. Social media trolls are famous for bad-mouthing people who are caught doing anything questionable. To avoid such repercussions, companies and individuals need to make smart and well-informed decisions before entering into any kind of commercial agreement.
The Case of Anna Heinrich
Anna Heinrich (a contestant on ‘The Bachelor’) was the first person to breach the Code of Ethics in April 2021. The influencer uploaded an image of her in a dress made by the brand Runway The Label on Instagram. Heinrich seemingly assumed that her regular partnership with the brand was widely known, and thus, only tagged the band in her post without explicitly stating that it was a paid promotion complaints were received regarding the lack of transparency of Heinrich’s potential partnership with the clothing retailer, despite her promoting their products on a regular basis. This case is a classic example of a breach.
The investigation panel noted that the post was misleading as it was not clear whether it was affiliate marketing or organic content. The panel thought that tagging Runway The Label was not enough, and there was no mention of the nature of the advertisement in her hashtags and captions. Ad Standards considers honest marketing a right of the consumer, and the bureau continues to review complaints related to the matter.
Get the Best Legal Support
It is the responsibility of both brands and influencers to arrange a meeting with a lawyer to review the sponsorship agreement and ensure compliance with the Code.
At Immerse, we have customised packages for your legal needs. If you require a legal expert who can understand the goals of the partnership and devise any necessary contracts, our experienced legal advisors will take care of your sponsored work and content creation requirements. We help brands and influencers stay on top of their A-game.
Connect with us
So, whether you’re a content creator seeking to collaborate with brands, or you’re a brand looking to try influencer marketing, our legal experts can make sure you’re covered. Get in touch with the Immerse team today!
Mark Lazarus
I am not your typical suit and tie lawyer. As you will note from my LinkedIn Profile, I was the Legal Director of the famous energy drink brand, Monster Energy for almost 6 years (based in London), and currently an Australian and UK qualified lawyer with experience across APAC, EMEA and the US.
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