Sponsored posts on social media: what do I need to know?

Advertisers and social media users (importantly, social media influencers) must ensure that posts or comments made on social media platforms are compliant with the Australian Association of National Advertisers (AANA) Code of Ethics (the Code).

What is the Code?

The Code is the overarching document that sets out the applicable standards across any medium for advertising or marketing communications, including social media.  The Code has been adopted by the AANA as part of advertising and marketing self-regulation.  Its purpose is to ensure that advertisements and other forms of marketing communications are legal, decent, honest and truthful and that they have been prepared with a sense of obligation to the consumer and society and a sense of fairness and responsibility to competitors.  Other AANA Codes that may also apply to advertising or marketing communications include the Food and Beverages Advertising Code, the Environmental Claims Code and the Wagering Advertising Code.

‘Advertising or Marketing Communication’ is defined in the Code as:

‘(a)       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 or oppose directly or indirectly a product, service, person, organisation or line of conduct,

(b)         but does not include:

• labels or packaging for products,
• corporate reports including corporate public affairs messages in press releases and other media statements, annual reports, statements on matters of public policy and 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.’

Given this broad definition, sponsored social media posts will more often than not fall within the ‘Advertising or Marketing Communication’ definition. It is important to note that payment is not a requirement of the definition.  The Code will apply regardless of whether payment has been made, or the form of incentive (if any) that has been provided in connection with the advertising or marketing communication.

Do I need to clearly distinguish sponsored posts on social media?

In March 2017, the AANA updated the Code to include a new provision 2.7: “Advertising or Marketing Communication shall be clearly distinguishable as such to the relevant audience”.

Provision 2.7 is very broad in its application and does not require that sponsored posts be labelled as such, provided it is clear to the relevant audience that the post is commercial in nature, and distinguishes the advertising as being that of an ‘Advertising or Marketing Communication’.  The following examples would suffice:

• A brand name or logo that is clearly incorporated within the advertisement.
• A slogan or hyperlink in the communication, directing consumers to where they can obtain further information about the product.
• Inclusion of a legal disclaimer that is associated with the relevant product or service.

There is also no requirement that sponsored posts on social media include the hashtags #ad or #spon within the post or adjacent commentary.

Despite there being no formal requirement to label an advertising or marketing communication, the AANA recommends that sponsored posts on social media use the hashtags #ad or #spon, as it is a clear and simple way of identifying to the public that the post constitutes an advertising or marketing communication.

The Ad Standards Community Panel is the body that responds to complaints and determines whether advertising or marketing communications meet the standards in the Code.  If the complaint is upheld, the post will need to be removed.  If the complaint is dismissed, the post is free to stay in its current format.

In the absence of explicit disclosure, advertisers, particularly social media influencers, should take care to ensure posts and other forms of advertising or marketing communications are clearly distinguished.

Does the Australian Consumer Law (ACL) apply to sponsored posts?

As with other forms of advertising, advertisers and social media users can fall foul of the ACL if statements amount to or include false or misleading claims.  This obligation also extends to ensuring that third party posts or public comments that are made on your social media pages, are not false or likely to mislead or deceive consumers.  If you were to become aware of such posts, it is important that they are removed as soon as possible.

Claims appearing on social media pages must be able to be substantiated, if requested by the Australian Competition and Consumer Commission (ACCC).  If the ACCC is of the view that the ACL has been breached, the ACCC has the authority to commence proceedings against the relevant party, or, if applicable, issue an infringement notice.

The ACCC will be more likely to investigate cases involving false or misleading or deceptive conduct if:

• it is likely that widespread public detriment would result if the statement were relied on;
• the conduct is deemed to be “particularly blatant”; or
• if the statement relates to a business that has previously been under scrutiny by the ACCC.

Recommendation

With the increasing use of social media in modern businesses, advertisers and social media users must treat their “online” communications with the same caution as they would through other forms of advertising.  In the case of sponsored social media posts the simplest way to distinguish your post as advertising and ensure compliance with the Code, is to use the hashtags #ad or #spon.

Authored by:
Antoine Pace, Partner
Alana Long, Senior Associate
Cassandra Krylov, Lawyer