Influencer advertising regulation is now set in Conduct Code

Return to News — Monday 26 October — 2020 by Baylos
avatar

Legal challenges arise every time the market goes a step further: technological developments and the dawn of new media have painted an unfamiliar picture, one that regulation must tackle effectively. While the purpose of social media was initially focused on personal relationships and communication between users, companies (large and small) soon became aware of its latent potential.

In this ever-changing digital reality, brands and companies came to realise the impact on potential consumers that some social media players had (the former being the followers and the latter the influencer) through online platforms. This equation has meant huge success for companies and influencers over recent years (for example Chiara Ferragni whose ground-breaking business model has not only been studied in Harvard but is also about to go public on the Milan stock exchange), accelerated even more so during the Covid-19 period when retailers and shoppers alike had to pivot overnight and learn to deal with a digital-only reality.

The trustworthy relationship between an influencer and their followers and the improvement in social media platforms has led to an ability to reach customers all over the world, and as such a profitable increase in sales. This previously unimaginable capability means new legal challenges for brands and influencers alike; primarily for those who started their profiles more informally and suddenly found it could be a money-making tool for as long as they were able to build up trust and maintain engagement with their audience, since no matter how big or small their followers there are regulations and limits they must comply with as a marketing practice.

As you may know, on January 2020 the Plenary of the Advertising Jury of Spanish Self-Regulatory Organisation (Autocontrol) issued a decision on an influencer’s post (Paulina Eriksson) deeming that the image in question was, indeed, an advertisement; this went without further consequences since, due to not being adhered to Autocontrol’s Advertising Code of Conduct, the decision was not binding for the respondent. Digital media advertising lawfulness was unclear and European self-control institutions (EASA and ICAS) started tackling this task back in 2018 by issuing Best Practice Recommendation on Influencer Marketing. More recently the Autocontrol and Spanish Association of Advertisers (AEA), in coordination with the Ministry of Economic Affairs and Digital Transformation and the Ministry of Consumer Affairs, published aCode of Conduct on the use of influencers in advertising that will come into effect in January 2021 and whose core objective is to set clear rules and guidelines so publicity is clearly identify as such and build up a responsible and transparent marketing practice to protect consumers, with special attention to the number of young people and minors exposed to this type of publicity.

To understand at a glance what this Code is about, we are going to dissect it in three key points:

1.- Who is considered an influencer, who is obliged by the code and who is liable if there is a breach?

  • First of all, an influencer (bloggers, Youtubers, Instagrammers, Facebookers, Twitterers, etc) is anybody who, thanks to their level of social media interaction and engagement, can reach a large number of people with the intention of promoting products or shaping consumer behaviour.
  • Secondly, these rules and guidelines have to be fulfilled by member/associates of AEA and/or Autocontrol -predominantly companies but also agencies, media players and influencers that voluntarily adhere to it- bearing in mind that in case of a complaint against a non-member, the Jury will issue an opinion with potential reputational effects and which could be used as a judicial assessment in the event of a legal proceeding.
  • And thirdly, the liability if the code is neglected falls upon companies taking into account that as a contractual agreement, if companies are able to prove they were diligent in informing influencers about the obligations, they are entitled to file proceedings for recourse against influencers for any sanction.

2.- What are considered advertising contents and what do they imply? The Code establishes that it would consider advertising to be any type of content (graphic, audio or visual) that cumulatively:

  • Is aimed at promoting products or services;
  • Is published within the framework of collaboration or reciprocal arrangements, being subject to payment or other remuneration -say free products or samples, tickets, services, discount vouchers, gift bags or travel- by the advertiser or its representatives;
  • The advertiser or its agents exercise editorial control over the published content (establishing in advance all or part of it and/or validating it afterwards).

Although the lines between genuine unbiased opinions shared and those with marketing intent can blur more easily than in other types of advertising, the Code states that purely editorial content and those that reflect the influencer’s own initiative -with no relationship with advertising companies or their agents- are excluded.

Marketing communications that fall under the scope of the Code should adhere to certain criteria. In particular they should be presented in such a way that the audience can immediately identify them, by labelling with specific wording or hashtags (for example “ad”, “sponsored by”, “in collaboration with”) or by including descriptions relating to the type of collaboration (for example “brand ambassador”, “gifted by brand”, etc). On the contrary, it is not recommended to use generic indication or labels (such as “info”, “legal”, “sp”, “colab”, etc) nor is prior action required in order to display the label or information.

Compliance with this regulation will be assessed according to the means of communication used, the space and time constraints it imposes, the measures taken by the employer or influencer and considering the target costumer. In the absence of a target profile, it will be understood that the average consumer is “an active consumer who is familiar with new information technologies, reasonably well informed and observant, able to access and understand digital media and with the autonomy to search, discriminate and adapt online content of the network based on his/hers preference or interest when browsing”.

3.- Is there a control system in place and what are the consequences of non-compliance?

As for the implementation of other Sectorial Self-Regulation Codes, there are two possibilities:

  • In case of any doubts about the legal or deontological accuracy of an advertising mention or content, companies and/or the influencer may carry out an internal ex-ante control or submit a prior examination request or preclearance to Technical Office of Autocontrol -COPY ADVICE system- that is a voluntary, confidential and non-binding consultation.
  • Ex post, companies affiliated to the Code might file claims for infringement before the “Autocontrol” Advertisement Jury or any other control institution, which might end up in effective sanctions and enforcement.

In addition, the Code states that the AEA and “Autocontrol” may -if necessary- carry out monitoring exercises to evaluate the degree of compliance by those affiliated and created a Follow-up Commission in charge of raising awareness and offering help and guidelines to members.

That being said, even if the Code does not come into force until January 2021, the truth is that most social media market players are aware of and willing to comply with these transparent and responsible practices. When hiring influencers, companies are including contractual clauses in which they set out crystal-clear guidelines for labelling social media advertising as such and tend to brief them with dos/donts for each new campaign. It would therefore seem that everyone is on the same page and new best practices will embrace the trends and reach top-notch success.

“Marketing is a race without a finishing line”
Philip Kotler

Article written by Belén Tomás Acosta

Share: