The Advertising Standards Authority Complaints Board – New Zealand’s advertising watch-dog – has released its first substantive decision on the requirements applicable to influencer advertising. Elements of the decision might come as a surprise to businesses that deal with influencers.

The ASA’s recent decision on this must be understood in the context of the underlying Advertising Standards Code Rules.

What’s the current underlying rule?

The key rule applicable to engaging influencers is Rule 2(a) of the Advertising Standards Code: Advertisements must be clearly distinguishable as such, whatever their form and whatever the medium used.

The popularity of influencer advertising prompted the ASA to release further guidance on Rule 2(a) in their Guidance Note on the Identification of Advertisements.

We’ve published an article previously explaining that Guidance Note, available here.

In short, determining whether an advertisement breaches Rule 2(a) involves a two-step process:

• First, is the content at issue an advertisement?
• Second, if the content is an advertisement, is it appropriately identified as such, to the relevant audience?

On the first question, the Guidance Note emphasises that ‘advertisement’ covers a broad range of content. When determining whether or not content is an advertisement, the ASA will look to whether an advertiser has direct or indirect control over the content. The ASA also considers the provision of ‘payment’ (whether financial or by way of free product) in exchange for content to be a key indicator that the influencer content is an advertisement.

When determining whether or not the advertisement in question has been appropriately identified, the ASA’s guidance encourages the use of ‘identifiers’ – for instance, hashtags, the use of logos or brand names, or other video or audio cues to make it clear to the audience that they’re engaging with an ad.

The new decision

The ASA Complaints Board issued a decision in late June which upheld complaints received about Instagram posts published by Simone Anderson – a well-known New Zealand influencer, with an Instagram following of over 314,000 users.

In short, the complaints related to a range of Instagram posts published by Ms Anderson, including pictures of her in activewear, gifted to her by clothing brand Aimn Limited, that included an affiliate discount code for followers to use when purchasing clothing from the brand. Another post subject to complaints depicted Ms Anderson enjoying high tea at the Cordis Hotel in Auckland, with a caption encouraging her followers to enter a giveaway promoted by the Cordis.

Despite submissions by Ms Anderson’s management that the content subject to complaints wasn’t controlled or guided by the advertisers in question, the Complaints Board held that each of the posts were advertisements for the purposes of the first stage of the test.

On receiving notice of the complaints by the ASA, Ms Anderson amended each of her posts to include the identifier #GIFTED.

But the majority of the Complaints Board held that wasn’t enough to distinguish Ms Anderson’s posts as advertisements for the purposes of the second stage of the test.

Instead, the Complaints Board held that Ms Anderson’s posts that were the subject of complaints were advertisements that breached Rule 2(a) of the Code.

Key take home messages

While the ASA’s Guidance Note was first published in February 2018, this is the first substantive decision on Rule 2(a) considered by the Complaints Board.

And it raises some key – if not surprising – considerations of which advertisers dealing with influencers will need to be aware.

• You could be on the hook: The first key take-home is that Rule 2(a) may cover a broader range of content than you’d think. Even if your engagement with an influencer is limited to gifting them product or services – and doesn’t involve a formal, written agreement, or even a requirement to publish certain information – the Complaint Board’s decision indicates that Rule 2(a) could still apply to content that an influencer publishes about your business. Many marketing teams dealing with influencers are unlikely to be aware that sending an influencer free clothing, for example, could mean they’re on the hook for compliance with the Code.  
• What’s in a hashtag? We’d expect the Complaints Board’s decision that #Gifted wasn’t clear as an identifier to also raise some industry eyebrows. For many, that hashtag (or similar identifiers, such as the phrase "Thanks to [advertiser]") is commonly used to identify the advertorial nature of content. But the Complaints Board’s decision makes it clear that this won’t be sufficient. Instead, the Complaints Board held that advertisers should be using labels that an audience can ‘instantly identify’ – specifically, #Ad, #Advertisement, or #Advertising.

Our top tips

When brands can be ‘impacted in the blink of an eye', reputation really is the name of the game. And being connected with an advertising standards complaint, even if unsuccessful, is likely to generate a lot of negative attention for your brand.

We set out our top-tips to mitigate the risk of a complaint:

• Know your stuff: For influencer advertising, many parties are likely to be involved in an arrangement. But that doesn’t mean you should rely on the agency or influencer you’ve engaged to do your homework. Having a clear understanding of the ASA’s rules and guidance will go some way to mitigating the risk of a complaint. Even better, establish an internal protocol for dealing with influencers – including by ensuring your staff also have appropriate training. 
• Play it safe: When it comes to engaging influencers, the clearest path to victory is to play it safe. Don’t try and skirt around the rule by agreeing to the use of unclear hashtags or by sending product and wiping your hands of the arrangement. Generally, the best way to ensure all parties are on the same page is to enter a written agreement clearly setting out the terms of the engagement.  
• Plan for the worst: While everyone hopes that their relationship with an influencer is a positive and fruitful one, in the courtroom of social opinion that won’t always be the case. It pays to have clear expectations established at the outset and an exit strategy if things turn pear-shaped. Again, this is usually best achieved by engaging experts to prepare clear terms prohibiting certain conduct by the influencer and enabling you to terminate the arrangement if necessary.  

If your business engages with influencers – even if just by sending product – now is a great time to ensure those arrangements are consistent with the ASA’s decision, rules, and guidelines. Get in touch with Hayley Miller, or Jenni Rutter.