It’s now a widely acknowledged reality that commercial organisations need defined social media strategies and policies in place as a framework for approaching the world of ’gramming, liking, sharing, connecting (and, a recent addition to the Facebook stable, “reacting”) online. An increasingly important part of that strategy is often engaging social media ambassadors or “influencers” to promote products or brands online.

This tactic can give companies significant leverage when it comes to reaching their target market in a direct and authentic way (in fact, a 2013 Nielsen survey found this was one of the most effective ways to earn consumer trust). However, the waters are still murky in the minds of many as to where the legal boundaries lie when it comes to disclosing the commercial relationship. How should a company disclose a paid arrangement with an “influencer” they are using on a social media platform? Is a hashtag like #ad or #spon sufficient, or is something more required? Is the position the same across all social media channels? What are the consequences of getting it wrong?

In this post we’ve set out some guidance and tips for ensuring you play within the boundaries when it comes to sponsored content on social media.

The golden rule

It’s important to remember that the same rules apply online or on social media as to any other kind of advertising. While there’s nothing wrong with paying someone to endorse your product or promote your brand, if the endorsement has the potential to mislead consumers, or if the overall impression is likely to confuse viewers as to whether the content was sponsored, things are getting risky. As the ACCC’s guide to online reviews recommends: be transparent about commercial relationships (read: when in doubt, disclose).

Companies should ensure that any brand ambassador or social media influencer engaged to promote their product:

  • discloses that they are a brand ambassador or that they have otherwise been paid to promote the product or brand in a clear and unambiguous way that the target audience is likely to understand;
  • uses the product or has a genuine association with the brand; and
  • does not overstate the results.

Unfortunately, there’s no “one size fits all” solution, and things can get particularly tricky on a platform like Twitter or Instagram where ambassadors have limited characters or space to disclosure the nature of the commercial relationship. Whether a short-and-sharp hashtag like #spon or #ad meets the standard will need to be considered on a case by case basis, taking into account factors such as the proximity of the disclosure to the relevant claim to assess the overall impression of the associated image or post together with the disclosure tag. Are consumers likely to see the disclosure when viewing the content, or is it buried other details or content? Will they understand that the hashtag means the person was paid to endorse the product? Is something more explicit, like “[Sponsored]” or “ABC Company gave me this product to try and I love it” required in the circumstances? Given the potential for things to go rapidly wrong on social media, it’s worth investing in strategies and processes to ensure nothing slips through the cracks when it comes to disclosure.

If you’re managing a global brand, it’s also important to keep in mind that social media is equally borderless, and regulators in other jurisdictions differ in their views as to what constitutes sufficient disclosure. For example, the FTC in the US released a guidance paper in 2013 indicating that placing the word “Ad:” before a sponsored tweet would be sufficient, whereas using the hashtag #spon may not. Comparatively, guidelines released by the IAB in Australia in 2013 indicate that including the words “sponsored”, “paid” or “client” added at the end of the post, or even just a simple “(SP)” will be effective.

Steps towards compliance

There are some active steps you can take to ensure compliance when it comes to sponsored content:

  • maintain a clear and up to date social media policy and monitoring process;
  • educate your legal and marketing teams to maximise awareness of what constitutes appropriate disclosure, and when to seek help;
  • be explicit with your ambassadors and influencers about your disclosure requirements and monitor compliance on a regular basis; and
  • be prepared to restructure your planned promotional activities if there is a material risk of non-compliance.