New influencer marketing codes: what brands and influencers need to know

Since the advent of social media, influencer marketing has become one of the most effective ways for brands to build awareness of their products and services, and for people of influence to collaborate with brands they love. But in this new frontier of marketing, the legal requirements of those within the influencer marketing industry have often been ambiguous, with no clear regulatory code in Australia.

However, as the industry has continued to grow, so has the need for transparency in relationships between brands and influencers.

As a result of this, in June 2020 the Australian Influencer Marketing Council (or AIMCO) established their code of best practice setting the scene for greater professionalism and the adoption of appropriate industry standards within influencer marketing in Australia.

Less than a year later in February 2021, the Australian Association of National Advertisers introduced their closely aligned ‘code of ethics’. In doing so, Australia’s regulation became aligned with the US and UK standards of required disclosure of advertising or influencer content.

Both codes were developed in line with the need for the industry to consistently address the legal requirements relating to advertising under the Australian Consumer Law (ACL) and its enforcement through the Australian Competition and Consumer Commission (ACCC) for those involved in influencer marketing. It includes guidelines for brands and influencers entering into contracts, whether written or verbal, and allows for greater transparency around influencer/brand relationships and accountability for each party.

It then begs the question, under the new codes when is disclosure required or not required, and what do influencers need to do to avoid their posts being barred by the new regulations?

According to AIMCO’s Code of Practice:

Advertising disclosure is required when there is a contracted agreement. This includes verbal recording, email documentation, digital or other documents. It includes:

• Any transaction with financial payment; as well as
  • Value in kind
  • Gifts
  • Free products
• This also applies to any affiliate marketing engagements

The only time advertising disclosure is not required is when there is no contracted engagement, or the brand has no input or ‘control’ over the influencer content or outcome.

Likewise, Section 2.7 of the AANA Code of Ethics states:

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). 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.

Although AIMCO’s Code of Practice and the AANA Code of Ethics are both closely aligned, there may still be some room for ambiguity. The way we interpret the codes at Pickstar is this - if you’re ever unsure, it is always best to disclose an influencer post with explanatory tags such as #ad or #paidpromotion.

With brands being considered the advertiser in influencer relationships, it is their responsibility to ensure that the commercial partnership with the influencer is disclosed in the ad/post. This being said, there are steps that must be taken to ensure brands are compliant with the code. By making it absolutely clear in the influencer’s deliverables that they are required to include an appropriate advertising disclosure (e.g. #ad or #paidpromotion) and following up if they fail to do so to ensure it is amended, a brand will be doing everything within your power to avoid the embarrassment of a breach.

To keep up with the ever evolving influencer marketing industry, major social platforms have developed tools specifically to assist in the paid promotion sphere. Global social media giants Facebook have introduced the ‘Branded Partnership’ tool on both Facebook and Instagram, making it easier for brands and influencers to arrange their collaborations, and for the appropriate disclosure to be clearly displayed without a barrage of hashtags clogging up an influencer’s caption.

An additional change for both brands and influencers to consider is the removal of the ‘relevant audience’ test from the code of best practice. This means that influencer ads without explicit declaration of advertising can now be found to be in breach if it could be assumed their followers would be aware a post was likely paid for.

While the introduction of new guidelines around the responsibilities of influencers and brands to declare advertising makes it a lot clearer for those involved, there are a few examples of mistakes being made by influencers that have breached the AANA Code of Ethics’ distinguishable advertising rule.

The first instance of a breach of the AANA’s new distinguishable advertising rules came in April when Bachelor winner and influencer Anna Heinrich shared a post posing in a dress from fashion brand Runaway The Label, with the caption ‘Turning my apartment into a Runway. Then back to my PJs I go! Wearing: @runawaythelabel’.

Complainants stated that the post had no sponsorship transparency, and the Ad Standards Community Panel who deliberated on the complaints found that while the clear display of the dress in the image paired with the use of the brand’s handle and tag did amount to material that would promote the brand in the eyes of consumers, the lack of a clear and obvious disclosure of advertising constituted a breach.

While Runaway the Label initially did not respond to the Ad Standards’ ruling and Heinrich’s post remained unchanged, her post has since included a ‘paid promotion’ disclosure.

A second ruling was made by the Ad Standards Community panel against beauty and lifestyle influencer Rozalia Russian, after complaints were made toward a photo she posted in January holding a bottle of Tom Ford Beauty perfume with the caption ‘summer in a bottle @tomfordbeauty’.

The panel determined the post was an ad as the product placement and display of the brand name would attract attention to the brand in a manner designed to promote them. Similar to the Heinrich case, the Panel ruled that merely tagging the brand’s handle on Instagram was not sufficient for indicating the content was part of a paid partnership.

Since the complaints and the ruling were made, influencer Rozalia Russian’s spokeswoman stated that “Rozalia is not a party to the complaint,” and “The picture in question was not a sponsored post.” Estee Lauder who manages Tom Ford Australia have stated: “At Tom Ford Beauty, we do not engage in paid influencer partnerships and the post in question was not sponsored.” Russian’s post is still up and has not yet included a disclosure of advertising.

Although there is no financial penalty for non-compliance, should a brand breach the code via their influencer not adequately declaring the advertising on posts, they will be required to delete the post in question or modify it to be compliant.

Brands found to be in breach of the code and who fail to comply with the Ad Standards Community Panel’s decision also risk reputational damage, as all of the Panel’s decisions are publicly available on their website. The vast majority of advertisers support the advertising self-regulation system because they understand the brand value of following the advertising Codes which are key to socially responsible advertising and good business.

• New regulatory codes have been introduced in Australia to ensure transparency in influencer marketing relationships.
• Advertising disclosure is required anytime there is a contracted agreement (written, verbal or digital) between a brand and influencer that includes a financial transaction of some form (be it value in kind, gifts, or free products).
• Brands are considered the advertiser in an influencer relationship, and are therefore responsible for the declaration of advertising.
• Although there is no financial penalty for non-compliance, both brands and influencers risk reputational damage if they fail to comply with the relevant code.

For more information about the legal requirements involved in influencer marketing, read the full AANA Code of Ethics.

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