Social media users must disclose payments, say ad trade bodies

The Internet Advertising Bureau (IAB) UK and Incorporated Society of British Advertisers (ISBA) published new guidance (4-page / 141KB PDF) on how brand owners and marketers can comply with consumer protection laws and rules on advertising when making a payment in order to "editorially promote" products and services on social media platforms.

The advertising bodies said that marketers paying others to use editorial space in social media to promote their goods or services should "ensure that the author or publisher of the message discloses that payment has been made," the guidelines said. Disclosure "will ensure that it is clear to consumers that it is a marketing communication," it said.

It is "essential" that marketers make sure that publishers they pay to feature promotional videos on websites tell readers about the promotion "within the body of the blog post or page that contains the video to ensure it is clear and transparent to a viewer," the advertising organisations said. Similarly paid-for promotions in blogs themselves should be disclosed in the body of the blog posting, they said.

"As some consumers may read the content outside of the blog in question (via an RSS reader or if the content is syndicated elsewhere), it's essential the disclosure happens within the body of the blog post itself, and not elsewhere," the advertising bodies said.

Brand owners should ensure that when they pay video bloggers to promote products the blogger discloses the payment as part of the blog, the organisations said.

Twitter users paid to promote products in 'tweets' should be told by marketers to use '#ad' to tell readers about the paid-for promotion, the IAB and ISBA guidelines said. The guidelines also advised marketers to seek permission from operators of internet forums before promoting any products, regardless of whether payment is involved. The guidelines said paid-for promotions via those forums should comply with the site's own guidelines and marketers should ask administrators about the guidelines if they cannot be found.

"Brand owners or marketing practitioners should not consider asking (whether or not payment is involved) third-parties to promote brands, products or services within internet forums, bulletin boards or news groups without permission from the forums' administrators, even with disclosure, as doing so would contravene generally accepted etiquette and is likely to generate negative sentiment amongst the forums' members," the advertising bodies' guidelines said.

"Brand owners or marketing practitioners should of course feel free to reply to comments in a non-promotional way on forums concerning their brands, providing they clearly disclose that they are affiliated with the brand in question," it said.

Danvers Baillieu, expert in communications law at Pinsent Masons, the law firm behind Out-Law.com, said the IAB and ISBA guidelines would be useful to those who were unaware that 'astroturfing' is illegal.

"The power of ‘word of mouth’ is seen to be much more valuable than obvious paid-for advertising," Baillieu said. "Businesses want to have the kudos of appearing to be satisfying happy customers. However, a lot of people are still unaware that ‘astroturfing’ is an offence."

"It is useful that the IAB highlights relevant terms and conditions of popular social media sites, but in my view they need to make clear what is the law and what is merely in the terms and conditions of a website. The guidelines also still leaves the issue of what constitutes ‘payment’ unresolved. Businesses need to know where the line is when lending or gifting products to journalists or bloggers for review purposes," Baillieu said.

'Astroturfing' is the artificial creation of grass-roots support for a product or service.

The IAB and ISBA guidelines also advised that marketers do not ask any Facebook users if they want paid to promote their products because to do so would "contravene Facebook’s terms of service".

The bodies said marketers should ensure that authors they are paying to promote products "adhere to the appropriate terms and conditions of the social media platform or website that they are using".

Websites such as Facebook explicitly ban "unauthorised commercial communications" whilst Google can also de-list companies from search results if they do not "make reasonable efforts to ensure that advertisements do not affect search engine rankings".

The IAB and ISBA said companies should also ensure that the content of their promotions complies with rules set out in the CAP Code. The self-regulatory Code demands that marketing communications are fair, legal, decent, honest and truthful.

The Advertising Standards Authority (ASA), which reviews compliance with the CAP Code, can refer misleading advertisers to the Office of Fair Trading (OFT), the consumer protection watchdog, which has the power to bring legal proceedings for breaches of UK consumer protection laws, although such referrals are rare.

The Consumer Protection from Unfair Trading Regulations (CPRs) protect consumers from unfair commercial practices which would lead them to take a purchasing decision that they would otherwise not have taken. Business proprietors are potentially liable for an unlimited fine and a prison sentence of two years if they are found to have committed such an offence.

Under the CPRs businesses are prohibited from "using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).”

The CPRs also prohibit traders "falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.” That practice is more informally referred to as 'astroturfing', because it fakes grass-roots support for a product or service.

Last year the OFT obtained undertakings from a blog network promising to label promotional content after investigating suspicions that purported editorial content was paid for but not disclosed. The regulator was consulted in the formulation of the paid-for promotions guidelines, the IAB and ISBA said.

"The integrity of information published online is crucial so that people can make informed decisions on how to spend their money," an OFT spokesperson told Out-Law.com

"Online advertising and marketing practices that do not disclose they include paid-for promotions are deceptive under fair trading laws. This includes comments about services and products on website blogs and microblogs such as Twitter. We expect online advertising and marketing campaigns to be transparent so consumers can clearly tell when blogs, posts and microblogs have been published in return for payment or payment in kind. It is important that people involved in online promotional activity understand their responsibilities and do not mislead their customers," they said. 

Nick Stringer, director of regulatory affairs at the IAB UK, told Out-Law.com that the guidelines would improve transparency for consumers.

"What we wanted to do is provide clear guidelines on what advertisers and marketing practitioners should do when paying for editorial content in social media space. We think they are good guidelines to follow to provide clarity to the market and offer consumers enhanced transparency for editorial in social media," he said.