The rules of Influencing: Business owners, media agencies and influencers take note

  • News
  • October 23, 2018
  • Hemma Vara
The rules of Influencing: Business owners, media agencies and influencers take note

In the digital world, influencer marketing is a normalised way for businesses to promote their products and services. It is used to promote a variety of offerings from restaurants and financial services to cars.

The New Zealand Advertising Standards Authority (ASA) considers an influencer as someone who has access to an audience by virtue of their ‘established credibility and authenticity. This includes ‘bloggers, vloggers, tweeters, instagrammers, journalists, celebrities and people who are highly regarded in social circles, marketplaces or industries’.

When using an influencer, businesses and marketing agencies need to be aware of disclosure requirements. On one hand, consumers are savvy social media users and expect a level of paid endorsements by high-profile users. However, sometimes the lines are blurred, and it can be difficult to tell whether a product is gifted or a paid endorsement, as opposed to a genuine shout-out to a company an influencer admires.

The reasoning behind disclosure requirements is simple - would-be customers need to know if an influencer is being paid or directed to promote a particular product, for example nappies. This then enables consumers to give weight to a particular endorsement where they see fit.

By this reasoning, businesses may be concerned that sponsored posts by influencers will turn people off from making purchases. However, influencers do well if they stick to core values and achieve a balance between sponsored and non-sponsored/genuine content. Businesses can pick influencers who resonate with their ethos and appear genuine, for example through use of humour or straight-up advice about life.

Businesses should also understand that the choice of influencer should not be based on how big their following is. For example, a micro-influencer focusing on a particular niche (for example yoga or food) may command better engagement within a particular target market than a major influencer who promotes a variety of products with no particular focus.

So, how do businesses, agencies and influencers adhere to rules that promote fair disclosure and keep them out of trouble?  

First, there are fair trading provisions that prohibit misleading and deceptive conduct. It is misleading for influencers to conceal a commercial relationship, regardless of how genuine their beliefs around a product or service is. Further, an influencer could make a false claim about the nutritional benefits of a food product. Businesses should therefore monitor what their influencers are saying, to ensure that the business is not endorsing and/or engaging in misleading advertising as a result. All parties should also be aware that particular industries restrict what is permitted in advertisements, for example in the alcohol and therapeutic industries.

New Zealand’s fair trading provisions go further to prohibit false or misleading representations that a person has any sponsorship, approval or endorsement. Importantly, this is a warning for influencers who want to look like they have been chosen to promote a brand (presumably to signify to followers their high-profile status), when in fact they have no commercial relationship with that brand whatsoever.

Parties to advertisements must also consider the relevant Codes and Guidance Notes by The ASA. Importantly, the ASA’s Code of Ethics states that advertising content controlled directly or indirectly by the advertiser should be identified as such. This applies to all content, regardless of the medium used to distribute it.

The ASA’s Guidance Notes on Identification of Advertisements is another crucial resource. Importantly, the ASA’s definition of advertising does not necessarily require a financial payment to take place to a third party in order for content published by the third party to be deemed an advertisement. This is important where a company gifts free product to an influencer, but also provides the influencer with a script, thereby exercising control over the content they expect the influencer to publish. On the other hand, if the influencer is gifted free product and has full reign over any subsequently review or post, then this does not necessarily constitute advertorial content.

So, how can businesses, agencies and influencers play fair when concocting drool-worthy advertisements in an attempt to create customer engagement and interest?

The ASA suggests that advertorial posts can include the following words, for example ‘Advertisement’, ‘Paid for Ad’, or ‘Promotional Feature’. Hashtags are also encouraged, for example ‘#Ad’, ‘#Sponsored’ and ‘#Promoted’. Obvious calls to action such as ‘phone now’ or ‘brought to you by [insert brand]’ also serve to indicate that content is advertorial in nature.

Brands can also seek to incorporate particular terms and conditions around disclosure of advertorial posts in their contracts with influencers, to ensure that influencers take their responsibilities seriously.

All in all, the rules of influencing can be tricky business. Brands, agencies and influencers must school up on their responsibilities to avoid getting into trouble. An advertisement is an advertisement, regardless of whether it’s posted by a third party on Instagram, on TV, or on a billboard overlooking Queen Street.


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