When does an influencer’s post become an ‘advertisement’? A recent decision by the Advertising Standards Board (ASB) puts social media advertising in the spotlight but may not provide any easy answers.

The facts of this ASB determination present a no doubt common scenario in the increasingly influential world of social media influencers. A celebrity, Kat Risteska (14.5k followers on Instagram), received free product from Eco Tan Pty Ltd, the manufacturers of a coconut body moisturiser. Eco Tan alleges that whilst they asked her to write a review, they had no control over what she posted or if she posted at all.

Risteska’s resulting post showed a picture of her with the product, tagged with Eco Tan’s social media handles @ecotan and #ecotan and according to the ASB reads as if taken from an Eco Tan press release. Eco Tan subsequently shared the post to its own social media channels.

A complaint was made to the ASB under a new provision of the Advertiser Code of Ethics (the Code) which says that “Advertising or Marketing Communications shall be clearly distinguishable as such to the relevant audience”.

Does money need to exchange hands for a post to be an advertisement?

The answer is no and this is what the ASB determined in this instance. In our view this makes sense, but there is a difference between being handed a free soft drink sample at a train station and taking to social media to express your delight, and a company singling you out as an individual with 14,000 Insta followers, sending you free product and you then posting about it. Clearer still is where an influencer reaches an agreement with the company that, in exchange for free product (instead of monetary compensation), they will produce content.

Does there need to be an obligation to post or what to post?

In this case, the ASB found the absence of any (for example, legal) obligation was not determinative. The ASB considered the post was an advertisement or marketing communication for the purposes of the Code.

The Best Practice Guideline on Clearly Distinguishable Advertising published by the Australian Association of National Advertisers says that where celebrities are sent unsolicited free product with no stipulation as to whether the person might post content and there is no control over any statements, any resulting material is unlikely to be considered advertising or marketing communication.

However, in this case the ASB’s view was that the sending of free product (a form of payment) amounts to a business transaction, and requesting a review means the advertiser ‘does have an element of control’, especially given it re-posted the material on its own social media account.

It would be good to know whether the act of re-posting was the determinative factor for the ASB, as the idea that Eco Tan had “control” before this point is puzzling. If a brand is deemed to “control” any post that it prompts by sending an influencer free product, this would seem to imply that the brand could be on the hook for anything in an influencer’s post (for example, other Code breaches or breaches of consumer law, privacy, defamation). Arguably, the act of sending free product creates some sort of obligation for the influencer to post (and potentially post something positive), but is there really “control” in these circumstances?

Was the advertisement sufficiently identified as such?

The ASB noted that the wording of the post was ‘as though from a press release’ and noted the use of the Eco Tan social media handles. The ASB considered therefore, that users would be aware this was a sponsored post, even in the absence of #spon or #ad for example. Indeed, the issue of the complaint was that Risteska’s post did not contain these identifiers.

Use of such identifiers is not necessarily determinative, as there are other ways that the post itself can make such a fact obvious, to use an extreme example, ‘I was treated to a free night at this resort by the owners in exchange for my thoughts and…’ or ‘Thanks for the gift [brand]’. However, it seems a stretch to say that because the wording sounded ‘like a press release’ and contained hashtags, it was sufficiently identified as being sponsored.

The end result for Eco Tan was that the ASB found that it had not breached the Code because the post was sufficiently identified as an ‘advertisement’.

Takeaways

Not sufficiently disclosing an advertisement as such cannot only be a breach of the ASB Code but can also constitute misleading and deceptive conduct under Australian Consumer Law. If the notion of “control” by the brand is taken to arise even when it doesn’t re-post itself or where the influencer has no actual legal obligation to post material, potentially the brand may be liable if the posted materials breach other laws. Therefore businesses who have a reputation to protect need to be equally careful about how they go about their social media marketing strategies.