A main pillar of the Council's work concerns the adoption of a self-binding ethics code for the advertising industry (Ethik-Codex der Werbewirtschaft) to be followed by advertising agencies and advertisers in Austria and imposing sanctions for violations.
In case of violations, the Advertising Council could condemn the advertising practice and either merely admonish the advertiser or even request that the infringing advertising practice be ceased (which could lead to media refusing to support/publish the campaign materials). The decisions of the Advertising Council can be made available to the public, leading to a general loss of reputation and the discrediting of the advertiser. Furthermore, the Austrian Supreme Court regularly considers such self-binding ethics codes when examining industry practice, in particular in the context of determining whether professional diligence was observed under Section 1 of the Austrian Unfair Competition Act [UWG].
Influencer marketing means taking advantage of bloggers and other persons with their own social media channels to promote goods and services. The reasons for this are obvious: (i) via the blogger the advertiser may target a very specific audience (ideally a homogenous and active community of followers), and even more importantly (ii) people trust recommendations more than advertising. Unlike testimonial advertising, the message is not transmitted by the advertiser (who is supported by the testimonial) but by the influencer. This greatly enhances the credibility of the message.
While the concept of transmitting more or less hidden advertising messages is of course problematic from a legal point of view (keyword: surreptitious advertising), there are many variations and the lines are blurred. Influencers may
(i) buy a product themselves and communicate about it (without any involvement of the producer),
(ii) be incentivised by free samples/gifts or invitations to events, but without an obligation to communicate,
(iii) be obliged to communicate in exchange for free samples/gifts, invitations or payment, but without any control over the content, or
(iv) have a paid partnership with and obligation to communicate and even allow the "sponsor" to control the content.
Thus, the free expression of opinion must be distinguished from incentivised communication and plain advertising.
From a legal perspective, two questions are crucial:
- Under which circumstances does an obligation to label the content and to inform the customer apply?
- Which information is necessary to prevent any misleading (wording and position)?
The Advertising Council recognises the current trends and uncertainties and has issued guidelines for dealing with influencer marketing as a specific means of marketing communication, to advocate for serious advertising in the interest of advertisers, bloggers and consumers. As influencers have responsibilities and role model effects especially towards young consumers, specific rules of conduct were created. According to the Advertising Council, two requirements essentially characterise influencer activities as marketing communication: compensation and content control.
- Content control means that the advertising company makes prescriptions or suggestions on texts, structure or contribution, such as encouraging or requesting a positive rating, a certain number of posts, or use for specific social media channels. Content control becomes even more clearly visible when scripts or texts are specified by the advertiser and validated by the influencer before publication.
- Compensation means besides a possible financial payment also the remuneration by commission-free services and products, which represent an incentivisation of the influencer. According to the Advertising Council, this even includes free product samples of low value.
Labelling suggestions by the Advertising Council: 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 for third parties and adequately marked as advertising, e.g. #advertising (#Werbung) at the beginning of the post on social media channels and their platforms (such as websites/blogs or channels) as headers in the caption.
Content containing product placements or based on minor contributions in kind (e.g. product samples) should be labelled #advertising to protect consumers. This seems to be in line with previous court rulings (in Germany) on these issues.
The Advertising Council furthermore points to the following provisions of 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.
- It must be ensured that influencers do not use images (selfies, pictures, etc.) that propagate harmful behaviour or harmful body shapes (e.g. bulimia, anorexia, obesity, etc.), especially in relation to body weight.
- It is important to ensure that influencers do not use mental and verbal violence. This includes disdain for certain individuals or groups, insults and threats, as well as the generating of fear, for example in the form of practices such as "pranking".
In regard to the various forms and grades of influencer marketing described above, the Austrian 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 provides a clear suggestion of how to label the 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 of a self-regulating body.
Such guidelines should be observed (also in view of compliance with professional diligence), but do not necessarily conform with the standards applied by the courts and the CJEU. As a rule, any false impression created about the reason, background and content of the communication should be prevented when using influencer marketing to promote products or services.
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