Paid to Post? Ensure You're Compliant With NEW Rules

More and more of advertising comes in the form of testimonials and trusted influential personalities who are hired as spokespeople for a brand or product. They are brand ambassadors, social media personalities, and are often paid by brands to promote by giving online product mentions and shout-outs to their loyal followers. It’s no surprise that as the landscape of advertising is changing, so too will the laws and rules around disclosure change. As of 2017, Advertising Standards Canada (ASC), is cracking down on misleading social media posts, blog posts and online content that serve as paid product endorsements in an effort to keep influencers, bloggers, and celebrities honest with the public. The rules require individuals to disclose whether they've received payment (either in the form of money, free products, experiences or other considerations) in exchange for the mention. The person must include statements within their posts, videos and on social media platforms such as Twitter, Instagram and Snapchat. They must include hashtags such as #sponsored, #sp or #ad that are clearly visible in the post and not buried under other content.

Canada is behind the times, as in the United States, the Federal Trade Commission (FTC) established disclosure rules in 2009, whereby they take enforcement actions for breaches. However, ASC is the industry self-regulatory body in Canada, and they have no authority to impose fines or penalties. In the past, if there was a breach in disclosure, ASC would contact the brand or company in question and request that steps be taken to prevent further posts, and compliance was usually met. They would focus on the sponsor rather than the individual. The ASC requires disclosure of material connection under Clause 7 of the Canadian Code of Advertising Standards/ Interpretation Guideline #5.

In Canada, the Competition Bureau, which is part of the Federal Government that oversees the Competition Act, has the goal of preventing fraud and eliminating deceptive marketing practices. This branch has the authority to impose penalties, giving teeth to these new rules. Lack of disclosure by bloggers and influencers could fall under the Competition Bureau’s rules against misrepresentation, misleading and false advertising to the public. Influencer non-disclosure could also fall under existing “astro-turfing" rules, which prohibit representations that appear to be the authentic experiences or opinions of impartial third parties. Breaches could lead to severe penalties, for example, in 2015 The Competition Bureau took action against astro-turfing when it fined Bell Canada $1.2 million for having employees post fake reviews of the company's products and services online.

Ad Standards Influencer Marketing Steering Committee just released new Disclosure Guidelines on March 24th 2018. The document gives some guidance on how to properly post and disclose in order to comply with the rules, however they are still being amended as needed. As previously mentioned, the ASC used to mainly target the sponsoring companies rather than individuals in enforcing the new guidelines. Now according to the 2018 Guidelines, the onus for mandatory compliance is shared. The guidelines say: “Compliance falls on all parties involved in the influencer marketing collaboration. There’s a shared burden that falls on any agency, PR firm or company responsible for facilitating the sponsorship—in addition to the brand advertiser and influencers involved.” This shared onus makes it more important than ever to understand your disclosure duties as a brand and the sponsored individual.

Social media has no borders, yet laws and regulations are governed by the jurisdiction of each country enforcing their own rules. So, if you are in Canada you ought to be complying with Canadian disclosure rules regardless of where your sponsor is and what their mandate is around disclosure.  

ASC urges disclosure for several reasons, and claim it’s not just about compliance with the laws. For the ASC the focus is the consumer’s perception and that advertising must be truthful, fair and accurate. The paramount concern is consumers’ perceptions and whether their perception of the content would be different if they knew there was a material connection and that the post was paid for. That is the question you ought to ask yourself. And when in doubt, ASC recommends that you disclose.

Here are some key terms and definitions from the new guidelines to help you understand who is an “influencer” and what is meant by “material connection” or “paid”:

Now, for the action items! This is how you can do your best to be compliant with the disclosure rules and ensure honesty with your audience and brand sponsor. The recommendations below for best practices were taken directly from the new 2018 Ad Standards Influencer Marketing Steering Committee Disclosure Guidelines. NOTE: these guidelines do not constitute legal advice nor do they guarantee compliance.

YouTube: Best Practices of Disclosures

Disclosure should appear at the beginning of the video and be verbally mentioned or displayed visually on the video itself (within the first 30-seconds). Disclosure should also be identified in the video description. It should indicate that a brand paid for a collaboration and had a hand in shaping the content (i.e. Thank you to X for sponsoring and collaborating with me on this video…)

Instagram: Best Practices of Gifted Products on Instagram

Disclosures should be made, even if the exchange is gifted products and no monetary compensation is made. You should disclose even if there was no requirement or contractual obligation to post about the brand or product, as the audience may assess the review differently knowing it was gifted. Disclosure should appear in the caption as part of the main message, and should not be buried among other writing and hashtags. Hashtags aren’t mandatory, instead clearly communicated written or audio disclosure may be sufficient. One of the recommended hashtags is: #giftedproduct. Often a free product comes with a letter or card with product information or a note from the party who sent it. Recipients of gifted products are encouraged to disclose that they’ve received the product. Ad Standards reminds everyone that this is a shared responsibility and brands can take the initiative to remind and recommend that influencers disclose the material connection.

Instagram: Best Practices for Events and Experiences on Instagram

Disclosures should be made, even if the exchange is an experience or private event attendance and no monetary compensation is given. Recommended hashtags aren’t mandatory, clearly written or audio communication may suffice.

Instagram: Best Practices of Disclosures for Paid Collaborations

Disclosure should appear in the caption as part of the main message and should not be buried amongst hashtags. The brand with the material connection should be clearly indicated. Usage of the “Paid partnership” tool may be used if the influencer has access to that feature. This may be used in addition to, not instead of, disclosure in the caption. Again, recommended hashtags aren’t mandatory, clearly written or audio communication may suffice.

Instagram: Best Practices of Disclosures on Instagram Stories

Disclosure should appear at the beginning of the story and be verbally mentioned or displayed visually. Disclosure can be visually displayed or verbally stated in the story. If an Instagram Story has a set of Stories meant to be consumed consecutively, disclosure is necessary at the beginning of the series. For multiple Stories posted independently, each story should have its own disclosure. There should be an indicator that a brand paid for a collaboration and had a hand in shaping the content (i.e. Thank You to brand X) or include one of the recommended hashtags.

Snapchat: Best Practices of Disclosures on Snapchat

Disclosure should appear at the beginning of the story and be verbally mentioned or displayed visually. Disclosure can be visually displayed or verbally stated in the story. If a Snapchat Story has a set of Stories meant to be consumed consecutively, disclosure is necessary at the beginning of the series. For multiple Stories posted independently, each story should have its own disclosure just like Instagram stories. The person should indicate that a brand paid for a collaboration and had a hand in shaping the content (i.e. Thank You to brand X) or include one of the recommended hashtags.

Twitter: Best Practices of Disclosures on Twitter

Given character limitations, recommended hashtags are most commonly used: #ad, #sponsored. Each tweet should have its own disclosure as they can be consumed independently and the sponsoring brand must be clear in the tweet.

Blog: Best Practices of Paid Collaborations on Blogs

Disclosures should be made before a URL (clickable or non-clickable). The description of the material connection can be written out, since hashtags don’t have functionality on a blog. The brand with the material connection should be clearly indicated to the reader.

The purpose of the rules is to ensure that the brand and influencer relation is clear to the audience. There may be a disclosure exception for a professional athlete with a high-profile partnership with a brand, where the audience knows about the ambassadorship and so disclosure may not be necessary. If there is a material connection and you’re working on content with a brand, even if it’s outside the scope of your contractual obligated post, you must disclose. For example, you’re doing a photoshoot with a brand and you want to show your audience a sneak-peak on set with the brand, you must disclose. According to ASC, “when in doubt spell it out”.

AWE’s final tip is that if you have doubts on how to disclose, contact your sponsor and ask them to provide specific wording to include in your posts. It’s important to follow the new guidelines in order to preserve the relationship with your sponsors and stay honest with your audience.

If you have any questions about the new disclosure rules or working with brands or influencers, feel free to get in touch with AWE Legal at info@awelegal.com