By Winnie Lok, Solicitor

26 April 2021

In the age of social media where the line between user generated content and paid content has become increasingly blurred, there have been increasing obligations on brands and influencers to clearly disclose sponsorships. There have been recent developments in Australia strengthening the requirements to clearly distinguish influencer content as advertising. This has been shown up in two recent Ad Standards cases involving well-known influencers including an ex-Bachelor contestant breaching the rules in influencer campaigns.

What are the rules on this?

The Australian Influencer Marketing Council (AIMCO) was formed last year to provide resources for responsible influencer marketing. You can read our article where we discuss the AIMCO Influencer Marketing Code of Practice in further detail here and its requirements for appropriate disclosure and permitted hashtags and related guidance.

Section 2.7 of the AANA Code of Ethics is the source of the basic rule that advertising should be clearly distinguishable as such. On 1 February 2021, the Australian Association of National Advertisers (AANA) updated this section, and it was not long before we have seen the first breaches of this updated rule.

What has been updated in the AANA Code of Ethics?

For broader coverage on the Code of Ethics changes, see our recent article here.

The updates include a change to section 2.7 of the AANA Code of Ethics and the related Practice Note specifically relating to influencer and affiliate marketing. The AANA Code of Ethics acknowledges that it can be difficult for the audience to differentiate between influencer and affiliate marketing and organic user generated content. The updated Practice Note to Section 2.7 now includes the following:

Where an influencer or affiliate accepts payment of money or free products or services from a brand in exchange for them to promote that brand’s products or services, the relationship must be clear, obvious and upfront to the audience and expressed in a way that is easily understood (e.g. #ad, Advert, Advertising, Branded Content, Paid Partnership, Paid Promotion).

While it “smiles on” the above hashtags, it goes on to call out hashtags or disclosures that the AANA “frowns on”:

Less clear labels such as #sp, Spon, gifted, Affiliate, Collab, thanks to… or merely mentioning the brand name may not be sufficient to clearly distinguish the post as advertising.

The wording of section 2.7 has also changed. Previously you only had to ensure that it was clearly distinguishable “to the relevant audience”, but this relevant audience wording has now been removed. This means that in the past, an advertiser may have argued that the ad was clear enough to their audience (e.g. savvy fashion conscious audiences aware of the influencer world). However, that argument has now gone and there is a blanket requirement to make advertising distinguishable. The harsher rules are clear from this first test case.

What happened?

In January 2021, Australian influencer Rozalia Russian whose Instagram profile boasts over 250,000 followers, posted an Instagram post of her hand holding a bottle of Tom Ford Soleil Blanc with the caption “summer in a bottle @tomfordbeauty”.

In February 2021, former Bachelor contestant and influencer, Anna Heinrich posted an image of herself in a Runaway The Label dress to her 380,000 Instagram followers with the caption “Turning my apartment into a Runway 💚 Then back to my PJs I go! Wearing: @runawaythelabel”.

Ad Standards received several complaints about both Instagram posts regarding the lack of sponsorship transparency.

What were the decisions?

The Ad Standards Panel first considered Ms Heinrich’s Instagram post and determined that the post was in breach of Section 2.7 of the AANA Code of Ethics. The Panel noted that although some followers of Ms Heinrich may have been able to recognise the content as advertising material, there was nothing in the wording of the post or hashtags to clearly demonstrate that this is advertising material. The Panel also considers that merely tagging the brand is not sufficient to clearly express that there is a relationship between the brand and the influencer.

Ms Heinrich has since updated the post to include the disclaimer “Paid partnership with runawaythelabel”. Runaway The Label has not responded to the complaints.

The Ad Standards Panel reinforced their view two weeks later in their decision regarding Ms Russian’s Instagram post. For the same reasons in the Ms Heinrich case, it also determined that tagging the brand on its own is not sufficient to show an arrangement between the brand and influencer. There was nothing else in the wording of the post to clearly show this is advertising material.  The post was therefore found in breach of Section 2.7 of the Code. It is interesting to note here that the Instagram post had been published prior to the updated AANA Code of Ethics coming into force which indicates to us that the updated Code applies to any advertisement that is still currently published on the influencer’s social media profile regardless of the first posting date.

Tom Ford has not responded to the complaints and Ms Russian’s post still remains as originally published.

Going back to Ms Heinrich’s case, it is worth noting that this is not Runaway The Label’s first run-in with Ad Standards. Under almost identical circumstances in 2020 and prior to the recent update to Section 2.7 of the AANA Code of Ethics, complaints regarding sponsorship transparency were made against two posts published by influencer Sophia Batzloff on her Instagram profile. The first post depicted Ms Batzloff in a white singlet and skirt with the caption “🏹🏹 @runawaythelabel” and the second post depicted Ms Batzloff in a floral bandeau top and white skirt with a brown handbag with the caption “Feeling fruity 😜🍊🍋wearing @runawaythelabel”.

In this 2020 case under the old rules, (unlike these 2 new cases), the Ad Standards Panel then decided there had been no breach of Section 2.7 of the Code. The Panel formed the view that given that:

1. Ms Batzloff’s Instagram account had over 150,000 followers which made her a recognised influencer to her followers; and
2. Ms Batzloff’s Instagram profile had contact information which indicated that she was represented by an influencer management agency.

Ms Batzloff’s followers would recognise that as an influencer, many of Ms Batzloff’s posts would be sponsored consent. The Panel also considered the posts in question and determined that given the highly stylised and professional nature of photographs with a focus on the products and the fact that the brand was tagged in the caption of the posts, it was clear to Ms Batzloff’s followers that these posts were sponsored consent.

The contrast in the Ad Standards Panel’s 2020 and 2021 decisions is a very clear example of the updated Section 2.7 in effect. What was once acceptable by Ad Standards (i.e. tagging the brand  and relying on your target audience to “get” how it all works) is no longer considered sufficient to disclose a commercial relationship between an influencer and brand.

The Code Practice Note now expressly calls out that simply mentioning the brand name may not be enough, we now have two cases to show they are going to be policing this approach.

What can we learn from this?

There is no doubt that influencers are a powerful marketing tool. With the increase in influencer marketing, consumers have become increasingly suspicious of thinly veiled sponsored content being pushed as organic posts.

It is important for brands (and influencers) to keep up with the everchanging regulations that affect their industry. As seen with Runaway The Label, what was once deemed as acceptable for proper disclosure of sponsored consent is no longer the case. It is also very important to take note of the timeline in Ms Russian’s case i.e. the Instagram post being published prior to the updated AANA Code of Ethics coming into force. Unlike traditional advertising where campaigns and its materials can be rerun and reused, social media posts generally remain on influencers’ profiles after a campaign has been completed. In other words, influencers generally do not delete or archive a post once a brand endorsement or campaign period is over. This could mean that many brands and influencers could be found in breach of the Code so it would be worthwhile for brands and influencers to revisit any previous sponsored content (including those originally posted prior to 1 February 2021 but still live) to ensure that it is compliant with the current Code.

Brands should also seek legal advice when engaging any influencer and ensure their contracts include requirements for influencers to follow for any content they publish for the brand, to keep the campaign away from legal drama.