By Andrew Jankovic, Solicitor |
As you may be aware, the first industry code of practice for influencer marketing in Australia was launched in July 2020, by The Australian Influencer Marketing Council (AIMCO) (the “Code”). Established by the Audited Media Association, AIMCO has introduced the Code aiming to address clear deficits in influencer industry trust and transparency, by guiding advertisers and marketers on best practice when engaging in influencer marketing. The need for such a Code had become increasingly apparent through the exponential growth of the influencer marketing space, where global spend on influencer campaigns was $500 million in 2015 and one forecast has it reaching $10 billion this year 2020. For some time influencer marketing has been the “Wild Wild West” of the marketing space, full of influencers who ‘talk the talk’ but can be difficult to manage. In other words, many brands would see the value of reaching certain audiences, and then put their faith (and their brands) in the hands of influencers who can tend to not properly understand their commercial or legal obligations. Setting up an influencer campaign properly can mean the difference between one that gets the right sort of attention for your brand and generates return, and one that leads to drama and headaches.
We have advised a litany of brands on disputes in the influencer space in the last 5 years, with many of our clients realising too late that the influencers in question were not behaving consistently with expectations. So, will the new Code make a difference and has it so far?
The industry generally recognises that influencer marketing is likely here to stay, and that for influencer marketing to continue to grow and serve as a reliable tool for companies to advertise their brand, better standards and greater transparency are required. The AANA Code of Ethics already contains provisions requiring influencer advertising to be clearly distinguishable as paid advertising. The AIMCO Code sits alongside the AANA Code and does not override those provisions, or relevant legislation such as the Australian Consumer Law (ACL). Despite the AIMCO Code not being mandatory, it may act as a useful tool of reference.
Specifically, the Code establishes four main areas of focus to guide companies when engaging an influencer to ensure best practice in the engagement. These areas are:
- Influencer selection and qualification – vetting
Before formalising any agreement with an influencer, it will always be prudent to do your due diligence and understand if the influencer is worth your brand’s time and money, or that of your client. While there may be many successful cases of influencers boosting the awareness and goodwill of a brand, there are also many unsuccessful cases, due to non-performance or misbehaviour causing a brand’s image to be tarnished. We have seen many of these issues come up, especially in the earlier days of influencer marketing. How do you best protect your brand and ensure you are setting up your campaign for success? There are a few things you can do and it starts before the engagement. The Code recommends brands carry out specific vetting actions before engaging an influencer, such as:
- (a) Does the influencer conduct their activities as a business?;
- (b) Does the influencer operate their accounts as a ‘business account’ on the social media platforms?;
- (c) Has the influencer had any prior brand relationships, and were they successful?;
- (d) Review past posts published by the influencer – are they in line with their brand image?; and
- (e) What are the demographics and reach of the influencer?
- Advertising disclosure
All forms of advertising will need to comply and be in line with the ACL, which establishes the fundamental principle that a business cannot engage in conduct that is likely to mislead or deceive. Therefore, when applying this principle to influencer advertising in particular, a business cannot create content that contains disguised advertising; if it is an ad it should be made clear that it is an ad. As flagged above the AANA has further developed this principle under their Code of Ethics requiring that ‘advertising or marketing communication shall be clearly distinguishable as such to the relevant audience’. This means that if it is not clear that the content is commercial in nature, it will be necessary to distinguish that the content is in fact an ad by incorporating additional copy to communicate this. In practice, this can be done through the use of logos or brand names combined with other visual or audio cues, or by including qualifying text accompanying the content. The AIMCO Code contains some further guidelines on how and when to do so. The Code states that when an influencer has been officially engaged via a contracted engagement (which can be verbal or written and includes any transaction with financial payment; value in-kind; gifts; and/or free products), the advertising will need to be clearly distinguished. The Code establishes minimum requirements to distinguish the advertising content on platforms that use hashtags, by including the hashtags, ‘#Ad’ or ‘#Sponsored’. The Code says that Hashtags such as “#collab” or “#brand” or even “#ambassador” or “#paidpartner” may be used but only in addition to these minimum requirements. The Code says that for best practice, this should not be abbreviated to eg #sp or #spon or #gift.
In the case of videos, brand association should be declared through ‘screen supers’ or in the post caption/copy where applicable. However, the Code also outlines that it will not be necessary for a brand to distinguish advertising content when there is no contracted engagement with the influencer, or if the brand has no input or ‘control’ over the influencer content or outcome but it may be best practice even then to disclose eg #freegift.
It should be noted that this is stricter in practical terms that what has been actively done in the past where greater flexibility has been adopted with disclosure. Currently, abbreviations like #spon and more general words like #collab have been commonly used. Now according to the Code these terms on their own are not enough. Notably however the Code is not mandatory, it just provides guidance on best practice. It is too early at this stage to see whether these additional obligations are going to be adopted widely by the industry.
- The brief/contract
When engaging an influencer, it is always highly recommended that a formal written agreement setting out the terms is signed and executed by both parties. The Code recommends some items to include in influencer agreements, which are:
- (a) Intellectual property rights – Who will own the content and what type of licence must be arranged to use the influencer created content for the brand’s intended purposes. Will the brand have editing and review rights to control the content before publication;
- (b) Reputation and brand safety – Vetting powers which can be exercised by the brand. Anti-social misconduct clauses, to ensure the influencer does not engage in activity that could bring the brand’s reputation or image in disrepute;
- (c) Legal or industry code compliance – Specific brand safety guidelines relating to industry codes such as AANA, alcohol (ABAC), therapeutic goods, food etc; and
- (d) Remuneration – clear payment terms over the course of the engagement.
This is one area that we have seen little to no change in so far under the new Code. While the Code’s guidance is useful and consistent with common sense principles in this space, further considerations must apply for the specific engagement, the specific client/brand, and the nature of the specific risks in each case. Special consideration should also be given to item (d) in the list above, being how the remuneration is structured, in our experience, as money generally talks loudest when it comes to keeping influencers in line. Our position is that the contract is the single most important part of any influencer engagement, of all those matters within the contemplation of the Code. For now, the Code has not substantially changed behaviours in this space.
- Metrics & reporting requirements
Gathering feedback and data on content posted by an influencer is vital for a brand to gain an in depth perspective on how to improve marketing strategy. More often than not, it will be the influencer that will be in control of such information through their social media accounts. Therefore, in order for a brand to obtain such information, it will be necessary to create clear obligations on the influencer to cooperate with the brand in retrieving and providing metrics on the relevant content published.
In summary, our view is that the new Code is a useful step in terms of legitimising the influencer marketing space, and hopefully giving influencers a kick in the right direction towards commercial sophistication and legal accountability. Brands should continue to rely on their own legal advice when engaging any influencer, and build their contracts out with any influencer very carefully to match their own risk profiles and commercial prerogatives.
If you would like further information on the above and how it impacts on your business or your client’s business, please contact one of our experts below.