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Influencer Marketing Legal Compliance in Australia

Influencer Marketing Legal Compliance in Australia: What you Need to Know

So you thought influencer marketing was just a #hashtag and social media thing for the selfie brigade? The truth is that the global market size of influencer marketing platforms is forecast to rocket upwards. Forecasts estimate a staggering 32% CAGR from its 2020 level of USD 6.0 billion to USD 24.1 billion by 2025.

The chief driver of influencer marketing and influencer agency revenue is users’ preferential shift towards video-based content based on streaming services known collectively as the OTT space. Advertisers are also turning more and more to influencer marketing platforms in response to the rising popularity of ad-blocking software.

Yes, that’s billions, and yes, it’s big business. That’s why not only brands but also influencers have to observe the rules governing advertising in Australia.

The Australian Association of National Advertisers (AANA) introduced stricter rules by updating its Code of Ethics in February 2021. The new rules centre on the issue of disclosing that a social media post is an advertisement.

AANA is not a lone voice in the wilderness either. AiMCO, the Australian Influencer Marketing Council, is also calling for compliance with the self-regulating guide. In July 2020, it launched its first influencer marketing Code of Practice. 

This article will examine these two guidelines and their implications for companies, their brands and their marketing influencers.

The Heart of the Matter

The influencer industry is well aware that scores of so-called genuine recommendations on social media are, in fact, paid posts. Go online anywhere and you can soon find hundreds of blatant step-by-step articles advocating that you cross every single ethical line in the book to make money from paid posts, and make someone else a major influencer.

It’s a social-media-savvy get-rich-quick roundabout. Anyone with a decent internet connection and a little bit of imagination to create content can do it from the comfort of their desk chair – or even, hey, from their tablet anywhere.

Welcome to the digital world. Like the physical world, it’s a place with ethical boundaries where best practice matters. It’s also a space where unscrupulous folk whose claims to legitimacy are flimsy at best are dead set on undercutting true professionals.

The Potential Cost to Unscrupulous Influencers

If Ad Standards finds individuals or businesses in breach of the many laws governing advertising and consumer affairs, the case gets forwarded to the ACCC, the Australian Competition and Consumer Commission. The maximum fine for individuals in breach is AUD 500,000 (individuals) and up to AUD 10 million in fines for businesses.

Warnings and fines for influencers who do not properly disclose that their posts are endorsing a brand are now the order of the day. They’ll do more than create a massive crater in your pocket: they’ll dent your reputation beyond recognition.

What Should Influencers Do?

Align themselves with AANA’s Code of Ethics and AiMCO’s Code of Practice, that’s what. And follow the guidelines they contain to the letter.

Companies like Wear Cape endorse and adhere to the two mentioned above. We’ve made a science of Brent Coker’s Going Viral Framework

We insist on transparency and full disclosure in all matters, and we top that all with the pursuit of top quality always. It’s in our clients’ best interests. So, by way of assurance, Wear Cape is compliant with the above Code of Ethics and Code of Practice.

Read our Website Terms of Use so that you know on which side of the ethical divide we stand.

What AANA and AiMCO Codes of Ethics Have In Common

AANA has been in existence since 1997. It backs the promotion and advancement of all types of advertising and marketing in Australia that actually does deliver value for brands, the community in general and the economy.

Its strategy is the promotion of responsible marketing. Members self-regulate their advertising content so that it meets current community standards.

AANA’s sister organisation, Ad Standards, operates an impartial complaint handling process. Ad Standards aligns itself with the national advertising content self-regulation system in place.

AANA is the overriding body that develops, reviews and updates the Code of Ethics. Ad Standards, meanwhile, adjudicates complaints from members of the public. Its Community Panel is inclusive, diverse and impartial.

Ad Standards receives roughly 5,000 complaints and adjudicates more than 500 cases each year. It publishes the results of all its adjudications on its website. For those in the business, these results make interesting reading.

Section 1 of the AANA Code of Ethics contains what it calls Practice Notes, which we talk about below. Section II concerns itself with matters that fall more squarely into the portfolio of Ad Standards.

You might not have heard of AiMCO, founded in September 2019. It aims to develop best practice codes and other initiatives within the influencer marketing industry.

The relative youth of this association reflects the very recent rise to prominence of this branch of advertising on social media. As channels such as Instagram, Twitch, Youtube, and others have gained ground, so has influencer marketing.

The AiMCO Code of Practice endorses the codes and standards of other marketing and advertising bodies, including AANA. This means that AiMCO subscribes to the AANA Practice Notes.

AANA Practice Notes

The AANA code of ethics applies to all types of advertising. It makes special mention of “user-generated content which is communicated via a site or digital platform over which the marketer has a reasonable degree of control; and any media, including online and social media”.

This means that the code does not discriminate between media, nor does it mention a specific technology. No one gets special treatment: one size fits all.

The Practice Notes state that advertising must observe Commonwealth law and the respective State or Territory law. They also address the issue that advertising should not be deceptive or misleading in any way.

Advertising has to walk the tightrope of probability, too. It should not contain any misstatement which has any chance of causing damage to a competitor’s goodwill or business.

The Practice Notes also address falsification by implication in statements about environmental protection. Advertisements should not imply that a company’s product or service benefits the environment when it does not.

This Practice Note seems to be covered by the “don’t be misleading or deceptive” rule when advertising products or services. Yet, the current imperative for environmentally sustainable business activities could prompt some to enter the realm of fiction by inflating their ESG profile.

Transparency on sustainability issues is now more important than ever. Companies are being judged on their general code of ethics and not only on how ethical their advertising and marketing practices are.

Given the enormous success of the Australian Made campaign over the last two decades, more or less, the last Practice Note censures false claims about the Australian origin of a product or the Australian content that a product contains.

But What About International Advertising?

AANA clarifies that it is aware that digital marketing communications and advertisements do not in themselves imply a specific target audience. So, international websites would have to be clearly addressing Australian consumers located in Australia for AANA to take on any complaint by a company or individual. Even then, evidence that a local entity distributing an international brand has reasonable control over the communication made by the international brand would have to be shown to trigger an inquiry by AANA regarding unethical advertising.

There have been some mutterings about the uneven playing field for Australians in the international advertising and marketing arena. Others have made wry comments that international business has always operated on an uneven playing field, and not just in advertising. AANA aims to encourage ethical conduct among advertisers and marketers regardless of the bumpiness of the physical or digital terrain.

It is also important to stress that while this Code of Ethics falls within Australian Commonwealth law and the laws governing the State or Territory concerned, it is only a code of ethics. It serves as a mechanism for people who have complaints to resolve disputes between competitors without the need for recourse to the courts. Dispute resolution performed in this way is efficient and affordable but does not take the place of any legal ruling.

What is AiMCO All About?

AiMCO is a division of the Audited Media Association of Australia (AMAA), a not-for-profit industry association.  Its structure differs from AANA’s in that it has an elected Guiding Council that administers its Code of Practice. Any person or company in the influencer marketing sector can be a member.

AiMCO relies on members to contribute to its work.

Like AANA, AiMCO’s Code of Practice recognises the need to comply with laws governing advertising under Australian Consumer Law (ACL) and address issues relating to its enforcement via the Australian Competition and
Consumer Commission (ACCC).

The AiMCO Code of Practice gives influencer markets guidelines in the following areas:

  • Transparency related to your influencer vetting practices
  • Brand safety issues
  • ACL disclosure requirements applicable to advertising
  • Issuing briefs and contracts that are appropriate and include specific content rights and IP information
  • Metrics used to report transparency

The Code of Practice has relevance for a range of stakeholders in the Australian influencer marketing sector. Stakeholders include:

  • Talent managers and representatives
  • Industry marketplaces with platforms that focus on promoting influencers
  • Digital media agencies and PR agencies
  • Advertisers who engage other stakeholders to carry out influencer marketing activities
  • Platforms hosting the influencer marketing community or influencer marketing service providers.

The rationale behind the Code of Practice is to establish best practice guidelines. Greater consistency in the language used and conduct among advertisers and marketers would result.

AiMCO lays out its principles that include transparency and commitment to transparency. Accountability from AiMCO’s perspective engenders confidence and trust in marketers. Their advocacy to develop industry-wide standards increases awareness within the industry of the need to support effective and ethical influencer marketing campaigns.

Wear Cape believes that each influencer marketing agency should champion this Code of Practice as a matter of principle, as they do.

Communicating Influencer Marketing and Influencer Agency Standards

Wear Cape is clear with all clients from the outset about what they can expect from its company. And what they can expect from the high-impact influencer marketing campaigns it manages on their behalf.

In their first meeting with a client, whether in person or on Zoom, they discuss the client’s current situation, as well as their expectations and goals. They also address any questions the client may have.

After that first meeting, Wear Cape produces a proposal that maps out a strategy for the client’s approval. In a follow-up meeting, we discuss the proposal in detail with the client. We also agree on the budget, an outline of the campaign’s goals, and how we will carry out the campaign.

Once approved, Wear Cape’s team of experts get a brief and get to work. The client receives a timeline indicating key dates and advice on selecting an influencer profile.

From the above outline, it is clear that everything is transparent from the start. Influencer marketers like Wear Cape use proven workflows to achieve targeted results. Experience in combination with technology results in high-impact campaigns with a well-documented lifecycle:

  • Strategy
  • Sourcing
  • Influencer Onboarding
  • Campaign Monitoring
  • Optimisation
  • Measurement

Key performance indicators (KPI) are linked to ROI (return on investment) forecasts. This allows Wear Cape to track campaign progress and performance. Reporting to the client is a breeze since all the essential groundwork has been covered beforehand.

Clear Distinctions

Recent media attention about unethical practices (the article detailing the AUD 10 million maximum fines referred to at the beginning of this piece) has called into question the ethics of all influencer marketing agencies. Everyone has come under scrutiny. Even those who have been assiduous in complying with the ethical codes of conduct and subscribe to the principles put forward by AANA and AiMCO.

The public must be aware that what they are consuming is influencer marketing. Influencer agencies and influencers engaged by an agency need to be hyper-vigilant about this.

It boils down to social media posts including #ad when the post is an advert. Disclosure that a post or publication is the result of a “paid partnership” is also essential.

Other standard labels include:

  • Advert
  • Advertising
  • Branded Content
  • Paid Promotion

So, affix hashtags and labels to all posts and publications. Making these clear distinctions helps readers distinguish influencer content from genuine consumer recommendations.

And that is the bottom line. 

Quo Vadis?

Australia is not the only country where the codes of ethics and the lines around best practices are being redrawn. The UK and USA are examining their own mechanisms. And the European Union’s love of regulation is bound to be right up there with the best of them.

Industry opinion is that further comprehensive regulations in Australia are in the offing in the coming years.

Transparent influencer marketing and influencer agency companies who subscribe to ethical best practices will maintain and enhance their reputations on the strength of their ethical and transparent history alone. For those who have to clean up their act, it is a question of now or never if they want to survive.

You need an effective and ethical influencer marketing company to navigate these waters and chart your path to success. Contact us at Wear Cape for more details.

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