Australia’s advertising regulator recently issued a decision that some predict may spell the end for Facebook as an advertising medium. But is it really the death knell as it’s being touted?

The Advertising Standards Board (ASB) found that user-generated content on a brand's Facebook page is advertising and has to comply with Australia's advertising codes.

The ASB received a complaint that fan posts on the Victoria Bitter (VB) Facebook page contained discriminatory and obscene language. VB's owner Carlton and United Breweries (CUB) agreed that the language was inappropriate, but argued that user comments are not advertising communications and CUB was not responsible for them. CUB had 'house rules' for fans posting on its page and a procedure for moderating user comments, but did not pre-vet user comments or moderate in real time. 

The ASB found that advertising codes apply to material posted on Facebook by users or 'friends' because it is material over which the page creator has a reasonable degree of control. 

In deciding this, the ASB has gone further than advertising regulators in other jurisdictions. For example, the United Kingdom's Advertising Standards Authority has a remit extending to marketing communications on brand owner's websites and other online spaces under their control, such as Facebook and Twitter. However, its rules don't cover comments from members of the public unless marketers include them in their own material, for example by retweeting.

The VB decision, and a similar ASB decision concerning Diageo's Smirnoff Facebook page, have caused consternation among online marketing pundits. Advertisers and advocates are concerned that these decisions effectively require a brand to moderate comments on its social media platforms in real-time, which they say is commercially impractical and will nullify the immediacy and openness that make social media so powerful.

What does the VB decision mean for New Zealand businesses? 

The decision doesn't apply here, although any New Zealand companies who use social media to advertise into Australia need to be aware of it.

New Zealand's advertising regulatory body, the Advertising Standards Authority (ASA), considers branded Facebook pages to be advertising, but has said it will not necessarily follow the ASB in finding that businesses are responsible for user-generated content on their pages. The ASA has already considered several complaints involving social media, including a complaint against DB Export Beer regarding user content posted on its Facebook page. DB conceded that it was responsible for all content on its page, but the complaint was settled and so the ASA didn't have to determine the issue. The ASA is developing a guidance note for advertisers that will hopefully provide some certainty for New Zealand businesses operating in the rapidly evolving environment of social media.

End of the road for Facebook advertising? 

It seems unlikely. As long as Facebook is popular with a business' customers, the business will continue to use it to reach out to those customers. Many companies already moderate comments on their social network platforms, and have 'house rules' for customer posts. Companies will have to find a balance between more rigorous monitoring and raising the ire of fans, but the flexibility and creativity that are the watchwords of the internet will no doubt provide a solution. Dire predictions are usually made about any attempts to regulate the online environment, but it has so far shown itself to be robust enough to deal with such challenges.

House rules to remember

Certainly, the VB decision is a good reminder for businesses to always be aware of who is acting as their brand voice, and to ensure that that voice is consistent with their values and best practice. New Zealand businesses should soon have some concrete guidance from the ASA guidelines*. In the meantime, if you maintain a Facebook page and encourage user comment you should:

  • make your 'house rules' clear, and remind your fans of those rules
  • familiarise yourself with the ASA advertising codes, and monitor your social media platforms regularly for comments or material that would breach the codes
  • be creative - find ways to engage your fans and customers in upholding and supporting your brand values.

*The ASA released its guidelines on social media advertising on 16 October 2013, which can be found here.

An edited version of this article appeared in NZ Marketing magazine, Nov/Dec 2012.