Advertising self-regulator signals a hardline stance to be taken with social media influencers.
What do Rozalia Russian, Pip Edwards and Anna Heinrich have in common? Enviable wardrobes for one but each has also graced the pages of the panel determinations of Australian advertising self-regulator, Ad Standards, in relation to their Instagram posts. The more recent decisions signal that the Ad Standards Community Panel (Panel) plans to take no prisoners as it enforces February 2021 updates to the Australian Association of National Advertisers (AANA) Code of Ethics (Code) which impose stricter rules to make the disclosure of paid posts more explicit.
Ad Standards, which enforces the Code, relies on complaints submitted by members of the public and competitors, and the compliance of advertisers in response to complaints. Ad Standards also works with other industry bodies if advertisers fail to remove ads found to breach the Code.
Rozalia Russian has twice been called out by Ad Standards since the introduction of the Code, with the Panel ruling:
- on 24 March 2021, that a post of her stunningly coiffed hand holding a Tom Ford perfume and captioned ‘summer in a bottle @tomfordbeauty’ was not clearly distinguishable as an ad; and
- on 14 April 2021, that a post of two pairs of the cult sneakers, Nike Air Jordan 1’s, stating ‘Jordan 1 Quilt Low @doughstore_’ was not clearly distinguishable as an ad.
Whilst Russian and Tom Ford vehemently denied a sponsorship, Ad Standards made a determination in the absence of the brand’s engagement, proceeding ‘on the presumption that the Instagram post was authorised by the advertiser, on the basis that Rozalia Russian is a well-known influencer who would be likely to post such material in a commercial arrangement’. The Panel considered that while some followers of the influencer may be able to recognise that this post is most likely advertising, there was nothing in the wording of the post, and no hashtags, which clearly demonstrated the post to be advertising material.
A similar conclusion was reached in relation to Russian’s Air Jordan post despite there being no commercial relationship save that Dough Store had ‘sent her some items for free’.
Bachie winner, Anna Heinrich, was only weeks earlier scapegoated as the first influencer to breach the revised Code, marking a clear shift in Ad Standards’ approach. Like Russian, Heinrich was alleged to have posted an image of her dressed in a green @runawaythelabel dress without the post including any indication that the post was an ad. The Panel ruled that Heinrich did not indicate clearly enough that the post was sponsored, and upheld the breach.
By comparison, in 2018, PE Nation founder Pip Edwards – the woman recently cited as being responsible for dressing half of Double Bay’s mum sect – was the subject of a complaint to Ad Standards for an Instagram post, featuring an image of her, hay bales, a man and child and a parked Mercedes.
Complaints were made, pursuant to the predecessor Code, about Edward’s failure to disclose the post as an ad. In reply, Mercedes submitted that the particular image was taken and posted by Edwards during her personal weekend, and that Mercedes did not have any influence regarding the image, content or associated copy, noting that a requirement for breaches of the predecessor Code (which remains in the current formulation) is a reasonable degree of control over the material. Ad Standards rejected that submission, surmising that in the face of a partnership agreement there was at least some degree of control and that Mercedes could have requested the post’s removal. Ad Standards nonetheless concluded, pursuant to the predecessor Code and similar to its 2017 determination of a complaint made against Eco Tan, that the followers of Edwards would be aware that this post was part of a commercial relationship, and likely an advertisement, and therefore not in breach of the Code (as it then was).
Whilst the same logic could be applied to virtually any of Rozalia Russian’s posts, including those the subject of recent complaints, the clear shift in approach by Ad Standards is a direct reflection of the stricter rules to make the disclosure of paid posts more explicit.
Hashtags #ad, #advert or #paidpartnership have in this regard been favoured by the Panel as terms easily understandable by consumers as opposed to terms such as #sp, #spon, #gifted or #collab, which have been cited by the Panel to be potentially insufficient.
In extreme cases, or when complaints indicate a breach of Australian Consumer Law, Ad Standards has the power to escalate the complaint to other regulators, including to the Australian Competition and Consumer Commission (ACCC) for disciplinary action and monetary penalties.
None of this altogether surprising: Brands and Influencers have always been subject to the regulatory framework of the Australian Consumer Law, however the enactment of the new Code and its stricter guidelines are a clear marker that influencer marketing is in regulators’ cross-hairs.
This is likely the result of an increasing level of public concern as reported by Ad Standards’ executive director, Richard Bean. Influencer marketing has also evolved over the last decade to become a multi billion dollar industry and if the history of evolution dictates, where there is money and consumers, enhanced regulation, investigations and claims inevitably follow.
Whilst it is the advertiser not the influencer publisher who is the subject of an Ad Standards complaint, influencers could be subject to reprisal from the brand behemoths in the form of claims for indemnity. For many influencers operating in their personal name rather than through a company entity, this exposes their personal assets. The legal costs and reputational impact of refuting complaints could also be material for all involved.
The Code and the recent Panel determinations are therefore a timely reminder that operating effectively in the influencer marketplace, whether as a brand or influencer, requires 1) well drafted contracts which appropriately allocate risk and outline clear and definitive guidance on expectations and regulatory frameworks, 2) consideration of adequate insurance coverage and 3) the adoption of other risk mitigation strategies for collaborators.
For many influencers, the challenge is appropriately tempering the heavy weight of their brand collaborators, where a ‘take it or leave it’ approach may be adopted to commercial terms.
In recognition of this phenomenon, earlier this year SBS producer Elise Potaka and journalist Calliste Weitenberg uncovered in a four part investigation of the influencer marketing industry, that one brand had explicitly outlined in its brief that the hashtag ‘ad’ or hashtag ‘sponsored’ post was not to be used. The justification on the part of brands to advocate such a strategy is founded in the underlying notion that influencer marketing is based on authenticity, and so it is better if the consumer does not recognise a post as an ad – this is after all why influencer marketing has taken over mainstream advertising as a preferred medium for seeding brand sales.
Such a strategy nonetheless leaves influencers (or at least those who hold lesser bargaining power than their brand counterparts) in a dire situation of being asked to break the law, and potentially without adequate, or any, appropriate risk management strategies in place.
HOW CRICHTON & CO LEGAL CAN HELP
Crichton & Co Legal assists clients in managing the reputational and legal implications arising from claims and investigations and promotes the proactive management of risks through advice, policies and education.
Following a three year tenure as a board member for a platform connecting influencers to brands, Crichton & Co Principal, Amie Crichton, also possesses an intimate appreciation of the influencer landscape and the unique challenges facing collaborators, adding 14 years’ experience in Australian Consumer Law to boot.
Drawing on this experience, and the insights of a number of influencers and brands, Crichton & Co delivers tailored advice, guidance and in-house training to influencers, agencies and brands, including in areas of:
- Content rights and intellectual property
- Best practice policies to achieve compliance with Australian law, other regulatory guidelines and platform rules
- Running prize promotions
- Contractual terms to improve on the allocation of risk (both influencer and brand favoured)
- Additional risk mitigation strategies
- Pre-check review on social media posts, copy or video content
- Spot-checks of influencer posts and hashtags to assess legal compliance
For legal support & collaborations, contact us here or on the details below.