In a digital world where it is becoming increasingly difficult to understand the meaning behind sponsored content, AiMCO took the initiative to create a guide to provide clarity about when and how disclosure should be made about gifts or value-in-kind products or services linked to influencer/creator content posted on social media.

Note that the disclosure requirement is not limited to situations where money changes hands. If you receive a gift, free product, or service from someone whose interests may be affected by your work, you should disclose that relationship.

When does gifting become advertising?

AiMCO (the Advertising, Promotion, and Marketing Communications Council) has provided a guide that can help you determine if your influencer content needs to be considered as advertising. According to their guidelines, influencer content is considered to be advertising when it is shown to consumers or the public in a way that is:

• Marketing is intended to promote a service or product. They can be in various forms, including advertising, sales promotion, direct marketing, and public relations, and
• When the brand owner has reasonable control over the content.

It doesn’t matter if the person receiving the gift is a friend or a stranger; a celebrity or an ordinary person; you’ve known them for years or just met them once at a party; your relationship with them is professional or personal—if brands give them something with the expectation that they’ll promote it, then it’s advertising.

The Ad Standards Community Panel has noted that influencers don’t need to be under contract with the brand or have a written brief or contract in place, for the brand to be considered to have a reasonable degree of control over what they say about the product or service being promoted. Providing known influencers with free products or services is enough to constitute reasonable control; disclosure is required.

Is gifting taxable?

It is also important to know that Australian Taxation Office considers ‘value-in-kind’ as equivalent to payment and hence income.

The determination of whether a gift is advertising or not is based on whether the purpose of the gift is to promote a business or product. If it is, then it will be considered advertising and subject to tax.

Gifting scenarios and ad disclosure

Here are some examples of common gifting scenarios that arise in the context of influencer marketing, together with guidance on whether advertising disclosure is likely to be required for resulting posts.

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How to disclose?

It’s important to disclose your relationship with the advertiser. When you’re reviewing a product, we want you to disclose if you have received a free sample of that product or a discount on that product. This is a legal requirement, and it’s also a way for us to make sure that you’re being honest with your viewers.

Use a hashtag!

You can use hashtags in the caption of your post, so it’s visible to anyone who clicks on it. This is effective because it lets people know that what they are seeing is an ad, but isn’t overly distracting from the content itself.

AiMCO recommends the following hashtags:

• #Ad; or

• #Advert; or

• #Advertising; or

• #PaidPartnership;

• #PaidPromotion; or

• #Sponsored

Write it in the caption.

Just write “This is a paid partnership between [brand name]” in the comments of your post or on social media.

You don’t have to get into the nitty-gritty details about how much you were paid, or if you got free stuff for doing it, or anything like that. Just make sure your followers know that this post is sponsored by the brand and not just an honest reflection of your own opinion.

Tell your audience.

Disclosing verbally is still considered disclosing. If you’re disclosing verbally, it’s important to make sure the message is clear and easy for your audience to understand.

Here are some tips:

-Use simple language

-Be clear with what you are disclosing

-Tell them why they need to know

It is recommended to include the verbal disclosure in the first frame or reveal of your video. You could also add disclosure in written form, where viewers may not have their audio on and may not hear the disclosure in the video.

Use the social platform’s capabilities.

The tools that social media platforms provide for paid partnerships are a simple, clear way to disclose sponsored content. On Instagram, you can add “Paid Partnership with…” to posts and stories. This helps your audience identify when you’re posting for brands and when your content is your own.

Advice to brands and influencers

Advertising is a tricky thing. It’s so easy to get it wrong, but it’s also so important that you don’t. Whether you’re an influencer or an advertiser, here are some tips for making sure that your ads are always above board—and that your audience knows exactly what’s going on when you’re trying to sell them something.

1) Make sure you’re clear about who or what you’re promoting. If there’s any question of whether or not you’re being paid to endorse something, make sure the audience knows! You can do this by using hashtags like #ad or #sponsored, or by saying out loud “This is sponsored content.”

2) Let your followers know if the product has been gifted to you. This can be done by including the word “gifted” in a tweet with a link to the product page, or by posting a photo of yourself holding up the product with #ad in the caption.

3) Be honest about whether or not advertising dollars have swayed your opinion. If you have received free products in exchange for review purposes, let your audience know!

Risks of not disclosing your partnership

There are three main risks to consider if you do not disclose your relationship with brands.

First, the influencer may break the terms of service on their social media platform. This can result in their account being deactivated, blocked, or otherwise shut down. It’s important to disclose clearly (or use branded content tools available on the platform) to ensure that neither the influencer nor the brand breaks any platform terms of service.

Second, complaints can be made to Ad Standards about any post on social media if it is suspected that it might be an ad but the influencer has not disclosed the relationship. This may result in reputational damage to both the influencer and the brand and may also result in further legal issues.

Third, if a breach of Australian Consumer Law was identified, further significant legal risks could arise for both parties involved in the influencer marketing campaign.

Takeaway

Hopefully, you’ve learned a few new things about the world of ad disclosure and affiliate marketing. As we mentioned at the start of this guide, it’s always great to find opportunities to make money using your passion—but not when it comes at the expense of your fellow consumers. It’s also important to educate yourself so that you can avoid these traps in the future.