Freebies or endorsements? Influencer rebuked for not disclosing free coupons
A recent Ad Standards case against an influencer for not disclosing paid-for content has again drawn attention to the difficulty of policing ad transparency, despite best practice encouragement from industry body AIMCO.
An Instagram post from Sydney-based influencer “Elly’s Life in Sydney” to her 50,000 followers last month raved about the deals available from Entertainment, an app that provides discounts on dining, shopping, activities, and most recently, travel. Formerly known as The Entertainment Book, the brand offers Australians an annual membership fee of $70 to access its coupons.
The Entertainment Book and app
Elly — Mumbrella was not able to determine the creator’s full name — was among a number of influencers and media invited to a lunch event last month by Entertainment. There, she was given a complimentary membership for the app. While the brand said there was no obligation for the influencers to post anything in return, Elly did so anyway, posting about the product and its benefits. She tagged Entertainment’s Instagram account as a collaborator, which is common practice for sponsored content.
What she didn’t do, however, was disclose the gifted membership or that the post was in any way sponsored. In fact, the original post said “not an ad” at the top.
A complaint was made to Ad Standards as a result. The Community Panel noted that the tagging of the brand, and the “clear focus” of its products would draw the attention of the public “in a manner calculated to promote it”. It found that the use of “not an ad” was misleading, and did not clearly disclose the relationship between the brand and the influencer.
Elly’s Life in Sydney (image AI upscaled from low-res original)
Finding the that advertisement therefore breached Section 2.7 of the AANA Code of Ethics (Distinguishable Advertising), the Community Panel upheld the complaint. The post was subsequently updated. Elly removed “not an ad” and added “#sponsored” at the bottom of the post.
Amaury Treguer, co-founder of social media agency Bread Agency and influencer expert, said “regulation is clear”, that influencers “must disclose when they’ve been paid and/or gifted”.
He told Mumbrella that he could appreciate the influencer might have wanted this to be a “general appreciation post”, but she still should have disclosed the situation, especially considering the gift she was given.
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A factor that should be considered here is whether Elly is supported by a talent agency or manager, who would know the implications of non-disclosure.
Jordan Michaelides, co-founder and managing director of talent agency Neuralle, told Mumbrella that without management — which he suspects is the case for this situation — influencers might not fully understand the legal ramifications of the job.
“Influencer marketing has its positives because people can develop a career without needing permission. But it has its negatives because they don’t necessarily know the legal implications,” he said. “Particularly for gifting, which is still such a grey area. Even the ATO has no firm answer about what qualifies or not.”
Failure of disclosure is not a new issue in the world of influencer marketing, nor is it for Ad Standards. In fact, the Community Panel has upheld several similar complaints over the years, as the advertising channel has grown in popularity.
In 2022, for example, a similar case arose from influencer Aisha Jade’s post about Treasury Wine Estates’ Penfolds. Ad Standards upheld a complaint for an Instagram post she made that also breached Section 2.7 of the Code of Ethics. In particular, the Community Panel noted that “in the case of gifts or invitations to influencers the context in which this occurs cannot be ignored”. The context it is referring to is a similar lunch event where the influencer was gifted.
Around the time of this earlier case, the Australian Influencer Marketing Council (AIMCO) introduced best practice guides for influencer marketing, which included clear direction on how to disclose when an influencer is gifted something — be that an invitation or a product — and when to use “#sponsored” or “#gifted”.
“What we know, is that disclosure is still a key topic,” AIMCO’s managing director Patrick Whitnall told Mumbrella. “Whether that’s with gifting, or events, or whether it’s just straight disclosure of a brand partnership, work still needs to be done.”
He acknowledged that influencer marketing is a fast-growing space, and said if both brands and influencers can properly educate themselves, such situations and Ad Standards cases can be avoided.
“We’re continuing on with education, bringing more trust and transparency to the industry. That’s what we’re here to do. If we can educate both sides of the industry, then hopefully we’ll get to a point where everything is where it needs to be.”
As the creator economy continues to growth, Whitnall said disclosure policies will remain a priority for AIMCO.
“How would we feel if things weren’t disclosed in traditional media? I don’t think we should be discounting that this kind of format [influencers] be anywhere differentiated in terms of professionalism,” he said.
“There has to be consistency, if we want disclosure in traditional channels, we need to expect that there are those consistencies of expectations in this space as well.”
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