MyFondia VirtualLawyer
May 31, 2018

Bring greater transparency and consistency to your paid partnerships on Instagram

Influencer-driven marketing has become of the biggest ways for brands to reach Instagram audiences in recent years. And, as a result, the Consumer Ombudsman and The Council of Ethics in Advertising (MEN) have started taking violations of Consumer Protection Act and ICC rules more seriously. Many forget that the same rules apply to marketing on Instagram as to traditional forms of marketing. The responsibility for clearly disclosing partner- and sponsorships on Instagram rests always with the influencer and the business, not the platform.

The most significant law in regards to Instagram advertising is the Consumer Protection Act. The marketing provision of the Consumer Protection Act always applies to businesses who in order to obtain income or other economic benefit, deals in, sells or otherwise offers consumer goods or services on a professional basis and for consideration. If you seek to promote your products through an influencer’s Instagram account, you always have an obligation to comply with the provisions of the Consumer Protection Act. It is important to note that an Instagram influencer may also be considered as a “company”, as defined by the law due to the professional nature of their Instagram account. Then the influencer must also ensure that the partner- and sponsorships are properly disclosed in accordance with the Consumer Protection Act.

According to Chapter 2, Section 4 of the Consumer Protection Act, marketing must clearly show its commercial purpose and on whose behalf the marketing is implemented. According to the reasoning behind the provision (HE 194/2001), Section 4 applies to marketing in general regardless of the methods used. The consumer must therefore always know that a business is seeking to influence them commercially.

The concept of marketing under the Consumer Protection Act is extensive. It refers to all commercial communications aimed at promoting the sale of a product or service. The Consumer Protection Act therefore covers all forms of advertising, including advertising or promotion on Instagram.

What should I do in practice?

  • Non-business-minded consumers don’t always recognize a sponsorship or paid partnership when they see one. Without the correct labels and tags, consumers may not recognize influencers’ paid partnership from influencers’ own opinion. If you have a partnership with an Instagram influencer, always give clear guidance on how to disclose the different types of Instagram partnerships and sponsored Instagram posts. Endorsement transparency cannot be overemphasized – use right hashtags!
  • Choose your influencers carefully, focusing on the influencers whose audience provides the best match with your customers. Produce content thoughtfully in collaboration with the influencer. Always execute cooperation agreements with the influencers!
  • Remember that Instagram requires influencers to disclose commercial relationships through their business partnership tag. In other words, posts that contain #ad but no partnership tag violate the policies set by both Facebook and Instagram. Use the “@[brand name]” signifier
  • Encourage the influencers to use the paid partnership feature in Instagram. When a post is tagged, the Instagram users will see “Paid partnership with xx“ in the post’s header–where you would usually see the post’s location. Currently the feature is available to all accounts “with high levels of engagement”. The feature also works for Instagram Stories, in which case the tag will appear at the top of the story just below the user’s name. The feature also helps you to gather insights about how your campaign has performed. You will also have the option to turn a “Partner Approval” setting on, which gives you the ability to approve (or disapprove) any partnership content before a tagged post is published.
  • If you have not formally agreed on the partnership, but you send free products or invitations to your events to Instagram influencers, this action is also considered marketing, as there is a clear aim to get products or services visible to the Instagram influencer’s followers. In such a case, you should advise the Instagram influencer to act in such a way that partnership or the receipt of no-charge benefits is transparently enclosed in connection with images or videos. It should be noted that although no formal cooperation agreement has been made, the Instagram influencer promotes the product or service on behalf of you, even though there is no obligation to do so.
  • In Instagram Stories, the viewer cannot always know whether the video is a paid partnership or a spontaneous opinion of the influencer, unless this is clearly enclosed in the video. It should also be noted that many Instagram users watch Stories with the sound turned-off, a verbal-only disclosure may not be enough. As above, give clear instructions to influencers about how the partnership should be disclosed.
  • If your company has its own Instagram account, it should be clear from the account that you as a company administer the account. You cannot disguise yourself as a consumer, for example, by creating fake Instagram accounts. Under no circumstances may a company use its own employees to advertise their products by pretending to be private persons.
  • The marketer has always full responsibility for their activities and the marketing methods used. You must always make sure that no hidden advertising is performed. Bring greater transparency and consistency to your paid partnerships on Instagram.

The author, Nea Welling, works as a lawyer at Fondia plc and has many years of professional experience in the field of marketing and communications prior to her law career. Nea blogs and regularly runs training on legal issues related to social media and marketing.