Waist trainers, diet teas, teeth whiteners, the list of products being touted by various celebrities and influencers on social media is increasing daily. No problem with that right? Well, as with a lot of things, the answer is ‘it depends’. It depends on whether the posts are disclosed (and disclosed adequately) as being sponsored content.
In America the Federal Trade Commission (the FTC) is cracking down on those posts that are lacking adequate, or any, disclosure as to their true nature as an advertisement. It recognises that sponsored social media content, unlike traditional media, can be a grey area, so wants paid endorsements to be clear to the consumer. The FTC provides social media guidelines, and suggest the question you need to ask when deciding whether or not to disclose is “whether knowing about that gift or incentive would affect the weight or credibility your readers give to your recommendation. If it could, then it should be disclosed”. What is considered 'acceptable' disclosure has not been determined as a hard minimum, and it is likely it would be considered case by case, but good practice would have the disclaimer at the beginning, not the end, of the post, and hashtags such as #ad, #sp and #sponsored will not always be enough.
The issue of sponsored content is not as widespread in New Zealand, but it is still worth being cautious. Anyone creating or instructing this content should be aware of a number of potential legislative requirements, including possible claims they could face under the Fair Trading Act. In addition to legislative requirements there is regulatory compliance that is just as important.
The Advertising Standards Authority (the ASA) is the organisation that self-regulates advertising in New Zealand. As part of its role it provides Advertising Codes of Practice, which are the rules by which all advertisements in all media should comply. One of those Codes of Practice is a general Code of Ethics. A basic ethical principle that should be observed at all times is not to mislead or deceive the consumer, partly achievable in this scenario by ensuring that all advertisements are distinguishable as such.
The ASA briefly covers advertising via social media. Although they do not provide specific guidance in relation to sponsored content, the definition of “advertisement” is taken in its broadest sense and is likely to cover those situations where a company has provided a free product to be endorsed under instruction by a celebrity or influencer on their social media platforms. Therefore the Codes of Practice, including the Code of Ethics, should be taken into consideration when creating any content. Notably the ASA states that if an advertiser is using a paid-for twitter endorsement, the hashtag #ad is required.
The FTC guidelines would likely be considered good practice in New Zealand, and the lessons transferable. When creating any paid content it would be recommended to make sure there is disclosure, that it is clear and understandable, and that consumers are not given any false impression.
The agency will be putting the onus on the advertisers to make sure they comply, according to Michael Ostheimer, a deputy in the FTC’s Ad Practices Division. It's a move that could make the posts seem less authentic, reducing their impact. “We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” he said. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”