Brands are successfully using social media as an advertising platform, either by creating their own communities or tapping into those of social media influencers.

This has become the new mother lode of online marketing. But what are the legal implications?

The legal side

As I’ve mentioned in previous articles, the same laws which govern advertising and promotional activity in the ‘real’ world also apply to the online world – things like defamation, copyright, privacy and consumer laws.

Paid endorsements may constitute misleading and deceptive conduct if the commercial relationship between the reviewer (such as a social media influencer) and the brand is not disclosed.

The commercial arrangement might be ‘pay per post’, giving freebies in exchange for reviews, or compensation based on referrals received.

ACCC guidelines

The ACCC has published guidelines for online reviews, including those made by influencers. In a nutshell, brands must:

·       Offer incentives equally (even if the review may be negative);

·       Be clear that the incentive applies even if the review is critical; and

·       Ensure influencers clearly and prominently disclose that a post has been incentivised.

The key is ensuring consumers are made aware of the commercial relationship between the brand and the influencer, so they can make informed decisions.

Brands behaving badly

In 2014, Australia Post was criticised for not disclosing it paid influencers to make favourable social media posts about its services.

In 2012, the South Australian Tourism Commission was similarly criticised for not disclosing that celebrities were paid ‘per tweet’ to promote Kangaroo Island.

What to do?

Although there’s been no court case about brands and social media influencers, the PR fallout from being caught can be severely brand damaging.

The key to avoiding trouble is for brands and influencers to be open about their commercial relationships. 

ABOUT THE AUTHOR
David Kelly is the founder of KHQ Approved, a fixed fee commercial contract review service. Peace of mind from an experienced team for a reasonable price.