Influencer endorsement: the blurred line between real life and advertising

Will New Zealand follow suit with Australia’s recent regulation review?

Influencer, paid product placement and advertorial advertising have recently come under new levels of scrutiny across the ditch thanks to a new provision in the Australian Association of National Advertisers Code of Ethics. The guidance covers native advertising and traditional media, including product placement as well as advertorial.

Undertow has done the digging and compiled an overview of information for you to bring yourself up to speed on how this change will affect your brand and business.

From March 3rd 2017, brands who pay influencers on social media platforms, such as Facebook and Instagram, need to disclose it or risk breaching this new provision. While the new provision is technically ‘guidance only’ as the code is enforced by the Advertising Standards Board, brands could be found in breach if they fail to disclose paid activity.

The new provision states that “advertising or marketing communication must be clearly distinguishable as such to the relevant audience” meaning that for the first time in Australia, advertisers and influencers must clearly distinguish ads and paid content from the surrounding unpaid content. This move, coming off the back of rising concerns about how identifiable ads need to be to ensure there is transparency for the consumer.

On social media, in particular Instagram, opinion leaders and influencers are currently being paid large amounts of money (or receiving goods as contra), to endorse a product to their engaged and trusting followers. This form of brand marketing has exploded in recent years with Instagram influencers holding the key to a world full of potential consumers in countries like UK, USA, Australia and of course, following suit, New Zealand. Until recently, only the UK advertising watchdogs have been patrolling these influencer campaigns with any such interest but it appears that this same ethical recommendation may be heading our way.

Since March 3rd, Australian based influencers have had to make clear any paid endorsement they are making on behalf of another brand and one way recommended by the AANA is to use the hashtag “#ad” in applicable posts. There are of course ways around these provisions including informal quid pro quo opportunities with influencers who are sent samples of a product without any agreed upon statements from the influencer.

What does all this mean for New Zealand?

Well, at this stage, not much. But it is something to keep an eye on and we notice that many larger multinationals are already adopting ‘spon’ or ‘ad’ as a rule with influencer outreach when paying individuals.

The Fair Trading Act 1986 (FTA) in New Zealand already prohibits false or misleading representations in trade. The first rule in the Advertising Code of Ethics, administered by the New Zealand Advertising Standards Authority, is:

“Advertisements should be clearly distinguishable as such, whatever their form and whatever the medium used; when an advertisement appears in a medium which contains news or editorial matter, it must be presented so that it is readily recognised as an advertisement.”

So the framework for stronger regulation is already there. Australia has followed suit from the UK, and it’s potentially not long until New Zealand follows our neighbour down the same path of stricter regulation.

At Undertow Media we work in a variety of different capacities for our clients, across the influencer sphere. As we are first and foremost a PR company, predominantly our outreach is around providing sampling of products and / or services, to applicable individuals who we feel will be genuinely intrigued by the campaign at hand.

Our M.O. over and above is to create talkability for our clients without advertising payment, therefore when we run product seeding without an enforced agreement to post for product, we do not follow the #ad or #spon recommendation. However, with the small pockets of budget we do have to work with, for product campaigns, we do recommend #ad or #spon, leaving it to the influencer to use when and where they feel appropriate.