Updates to the Influencer Marketing Code of Practice September 15, 2021

There’s more to influencer marketing than brand awareness, engagement, and deliverables. Understanding the legal obligations is a critical cog in the digital wheel

If you’re one of the many businesses that works with influencers, this update is for you.

The Influencer Marketing Code of Practice was developed by the Australian Influencer Marketing Council (AiMCO). It was recently updated to reflect best-practice standards when engaging in influencer marketing. The update brings the Code into line with the Australian Association of National Advertisers (AANA) Code of Ethics.

With social media advertising continuing to grow, these changes are another step closer to becoming part of Australian law. 

What is AiMCO?

Founded in 2019, AiMCO is an alliance of companies and professionals in the influencer marketing community. Its purpose is to provide guidance and knowledge for influencer marketing best practices. 

In July 2020, AiMCO launched the industry’s first Influencer Marketing Code of Practice.

What is the Influencer Marketing Code of Practice?

The Code was developed to provide best practice guidance to businesses engaging in influencer marketing, and to create greater consistency around the language used. The Code covers areas such as:

• Influencer vetting practices
• Brand safety considerations
• Advertising disclosure requirements under the Australian Consumer Law
• Importance of contracts when dealing with content rights and intellectual property
• Transparency in metrics and reporting 

The Code applies to anyone working in the influencer marketing sector, including brands, agents, marketplaces that help to promote influencer marketing, PR agencies, and of course the influencers themselves.

Updates to the Influencer Marketing Code of Practice

The updates to the Code align with:

1. The changes made to the (AANA) Code of Ethics back in February 2001; and 
2. The recent reports on consumer complaints heard by the Ad Standards Community Panel 

The AANA Code of Ethics is a self-regulated code enforced by Ad Standards. Complaints about breaches of the codes can be submitted to Ad Standards, to be reviewed by the Ad Standards Community Panel. Since the update to the AANA Code of Ethics, Ad Standards has been cracking down on influencer marketing engagements that do not clearly disclose the nature of the relationship, which has led to some embarrassing naming and shaming. While these codes are not mandatory, non-compliance can lead to reputational issues and, in some circumstances, a breach of the Australian Consumer Law, which can result in some hefty penalties.)

Back to the Influencer Marketing Code of Practice. This update seeks to:

• Highlight the need to disclose the nature of the relationship, including any gifts, payments, or value-in-kind goods/services
• Address the importance of differentiating between genuine or organic recommendations and paid posts
• Help to minimise reputational risks to both influencers and brands in failing to meet advertising disclosure requirements and compliance with the Australian Consumer Law 

Guide to gifting and ad disclosure

Gifts and value-in-kind arrangements have created a bit of a grey area when it comes to the obligation to disclose a commercial relationship. To address this ambiguity, AiMCO has developed a Guide to Gifting and Ad Disclosure, which provides examples of how and when to disclose. In particular, the guide reminds brands and influencers that disclosure is not only required when there is monetary compensation – gift and value-in-kind arrangements call for the same disclosure requirements.

Disclosure is required for all content that is considered advertising. In general, content will be considered to be advertising when:

1. it is calculated to promote a product or service; and 
2. the brand owner has a reasonable degree of control over the content. (This doesn’t mean that the brand needs to have creative control of the content. In recent Ad Standards cases, it has been found that providing influencers with free products or gifts is sufficient to demonstrate a reasonable degree of control)

How to disclose

We know it’s not sexy to include legal terms and conditions (like the government voiceover we hear in TV and radio ads), but there are other ways to clearly communicate the nature of the relationship, including:

• Use a hashtag: Hashtags such as #Ad, #PaidPromotion, and #Sponsored comply with the Code’s minimum disclosure requirements. They get the message across, as long as they are clear and prominent in the post (not just in the comments)
• Write it in the caption: This can be short and sweet as long as it is prominent, for example, “this is a sponsored post”
• Use the tools available to you: Instagram, for example, has a paid partnership functionality built into its platform, which can easily be attached to a post or story

The final word

As the influencer marketing landscape continues to evolve, we can expect further changes to the Influencer Marketing Code of Practice.  Contact us if you have any questions about the new updates or need assistance with preparing agreements, advertising policies, or reviewing social media content. 

This article was written by Alexandra Shaw

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can receive from marshalls+dent+wilmoth and other relevant experts.