Influencer marketing – Advertising Council adopts specific rules

Advertising Council
Influencer marketing
Advertising Council's labelling suggestions
Comment

Advertising Council

The Advertising Council is a self-regulating body which oversees the Austrian advertising industry. Among other things, the council focuses on adopting a self-binding ethics code for the advertising industry. This code must be followed by advertising agencies and advertisers in Austria and imposes penalties for violations. Where violations occur, the Advertising Council may condemn the advertising practice and either admonish the advertiser or request that the infringing advertising practice be ceased (which could lead the media to refuse to support or publish the campaign materials).

As Advertising Council decisions can be made public, offenders run the risk of hurting their reputation or being discredited. Further, the Supreme Court regularly considers such ethics codes when examining industry practice – in particular, in the context of determining whether professional diligence has been observed under Section 1 of the Unfair Competition Act.

Influencer marketing

'Influencer marketing' means taking advantage of bloggers and other persons who have their own social media channels to promote goods and services. The reasons for this are obvious:

• Advertisers can use a blogger to target a specific audience (ideally a homogenous and active community of followers); and
• People trust recommendations more than advertising.

Unlike testimonial advertising, influencer marketing is transmitted by the influencer, rather than the advertiser (who is supported by the testimonial). This greatly enhances the credibility of the message. While the concept of transmitting arguably hidden advertising is problematic from a legal standpoint, there are many variations of this and the lines between hidden advertising and personal opinion are often blurred. For example, influencers may:

• buy a product themselves and communicate about it without any involvement from the producer;
• be incentivised by free samples, gifts or invitations to events without an obligation to endorse the product;
• be obliged to endorse a product in exchange for free samples, gifts, invitations or payment, but without any control over the content; or
• have a paid partnership with a producer which requires them to endorse a product using content provided by the producer.

Thus, the free expression of opinion must be distinguished from incentivised endorsements and plain advertising.

From a legal perspective, two questions are crucial:

• Under which circumstances is there an obligation to label content and inform the consumer?
• What information (eg, wording and position) is necessary to prevent consumers from being misled?

In recognition of these trends and uncertainties, the Advertising Council has issued guidelines for dealing with influencer marketing as a specific means of marketing communication in order to ensure that rules are in place for the benefit of advertisers, bloggers and consumers. As influencers can act as role models (especially towards young consumers), specific rules of conduct were created. According to the Advertising Council, two requirements essentially characterise influencer activities as marketing communications: compensation and content control.

'Content control' means that the advertising company makes prescriptions or suggestions about the text, structure or contribution, such as encouraging or requesting a positive rating, a certain number of posts or use of specific social media channels. Content control becomes especially obvious when the advertiser gives the influencer a script or text and these are validated by the influencer before publication.

In addition to financial inducements, 'compensation' means remuneration by way of commission-free services and products which incentivise the influencer. According to the Advertising Council, this even includes free product samples of low value.

Advertising Council's labelling suggestions

Influencer marketing communication, like any advertising communication, should be implemented and labelled in such a way that the consumer immediately recognises it as advertising. Influencer advertising must be clearly identifiable to third parties and adequately marked as advertising (eg, #advertising) at the beginning of the social media post and on the relevant platforms (eg, websites, blogs or channels) as headers in the caption. Content containing product placements or based on minor contributions in kind (eg, product samples) should be labelled #advertising to protect consumers. This seems to be in line with previous court rulings (in Germany) on these issues.

Further, the Advertising Council points to the following provisions in the ethics code, which are deemed to have particular importance in influencer marketing:

• In advertising that is aimed directly at children and adolescents, no obvious or subliminal request to purchase the advertised product may be made.
• Influencers cannot use images (eg, selfies and pictures) that propagate harmful behaviour or harmful body shapes (eg, bulimia, anorexia and obesity), especially in relation to body weight.
• Influencers cannot use mental and verbal violence. This includes citing disdain for certain individuals or groups, making insults and threats and creating fear (eg, by using 'pranks').

Comment

With regard to the various types of influencer marketing described above, the Advertising Council seems to apply a relatively low threshold with respect to the compensation that triggers the obligation to label content as advertising. However, it remains unclear whether content control is required and to what degree. On the other hand, the council has provided a clear suggestion of how to label content. It would have been interesting to know whether the tools provided by social media platforms (sponsored partnership tools) are considered sufficient. In any case, it should be borne in mind that these are the guidelines from a self-regulating body. While such guidelines should be observed (and considered in the context of complying with professional diligence), they do not necessarily conform with the standards applied by the Austrian courts or European Court of Justice. As a rule, any false impression created about the reason, background or content contained in influencer marketing should be avoided when promoting products or services.

For further information on this topic please contact Michael Woller or Dominik Hofmarcher at Schoenherr by telephone (+43 1 5343 70) or email (m.woller@schoenherr.eu or d.hofmarcher@schoenherr.eu). The Schoenherr website can be accessed at www.schoenherr.eu.