In recent times, it has become commonplace for businesses to use social media to promote and market their products to a wider audience. I’ve written numerous articles on how misleading and deceptive conduct and misleading representation law applies to posts on social media and even reviews made by customers on social media.
However, more and more avenues for promotion are being developed as social media continues to grow– for example, liaising with ‘influencers’ (typically those with a large following on social media channels such as Instagram or a blog), has become an effective method of promotion. Many businesses contact ‘Influencers’ and have them post a photo or caption about their product, which can potentially reach hundreds of thousands to even millions of their followers.
According to an influencer marketing study by Tomoson, businesses make $6.50 for every dollar spent on influencer marketing. Influencer marketing can mean big money if used correctly, but it is equally risky if not done in accordance with legal obligations.
In Australia, misleading and deceptive conduct and misleading representations by businesses are heavily penalised – the ACCC suggests that erring on the side of disclosure is the safest route in any sponsored material. This means that it is always best to have your influencer make it clear that they are being sponsored by your company to publish a post.
But what exactly is ‘disclosure’?
Some promoters use hashtags (“#sponsored” or “#ad”), others use “AD” and some simply state that a company has given them a product to review. Unfortunately, there is no clear-cut answer about what is sufficient disclosure – the law only states that a business must not give an “overall impression” that is misleading or deceptive.
It is also important to keep in mind that other jurisdictions, such as the US, may have different laws relating to disclosure.
The best way to deal with this is to put yourself in the shoes of a consumer and ask yourself whether you would be aware that a post or publication is “sponsored” from what has been written or published.
Non-disclosure not only risks the integrity of your brand in terms of the law, but also your goodwill. I have seen many companies who have influencers rave about their products, only for legitimate customers to retort with negative reviews and question the integrity of the business and reviewer.
It is ideal to have a formal agreement in place with your influencer which will allow you to sign off on any posts and ensure that you are comfortable with the impression it leaves in the market.