Food & Beverage Update: New Guidance on #Sponsored #Ads and Freebies
14 May 2017
As the US and UK advertising regulators step up measures to combat advertising on blogs of celebrities, athletes and other influencers, the Irish regulator has signalled it will be taking similar steps. We take a look at a newly published guidance note requiring bloggers to be forthright in reviews of products for which they have received payment or free products.
The recent guidance note entitled “Recognisability of Marketing Communications” issued by the Advertising Standards Authority for Ireland (“ASAI”) seeks to crack down on marketing material being presented as independent reviews on social media platforms.
Paid placements – direct or in kind
The guidance warns that where an advertiser pays a reviewer, directly or in kind, and has significant control over the content of a review, that review is likely to be classified as a marketing communication. These communications are not allowed to be presented as user-generated content, private blogs or independent reviews.
Similarly, if an advertiser offers a free product to a blogger in return for a positive review, that review would also constitute a marketing communication. This form of marketing communication must be clearly declared by the blogger as an advert or sponsored by including hashtags such as “#ad” or “#SP”.
The Consumer Protection Act 2007 also applies in these instances. The Act seeks to restrict the use of “editorial content in the media to promote a product if it is not made clear that the promotion is a paid promotion”. The Act prohibits misleading commercial practices; omitting material information that the average consumer would need to make an informed decision on whether to purchase goods is considered to be misleading, particularly if the trader (blogger) fails to identify the commercial intent of the communication. Offences under the Consumer Protection Act can result in fines of up to €60,000.
The ASAI has now begun monitoring blogs in what appears to reflect a step-up of enforcement worldwide.
US watchdog, “Truth in Advertising”, highlighted over 100 posts in which they claim the Kardashians, amongst others, failed to “clearly disclose relationships with companies being promoted”.
In April 2017, the US Federal Trade Commission issued letters to over 90 celebrities, athletes and influencers urging them to disclose sponsorships by including hashtags like “#ad” or “#sponsored” at the top of Instagram posts.
Previously, US Regulators intervened in only extreme cases such as Kim Kardashian’s endorsement of a morning sickness drug in which she failed to disclose the associated medical risks.
The UK Advertising Standards Agency (“ASA”) continues to crack down on infringements of the UK code. In April 2017, it found that a promotion of “Flat Tummy Tea” posted by blogger Sheikhbeauty failed to clearly identify a marketing communication. The post offered a 20% discount and, therefore, should have included the hashtag “#ad”.
Similar standards apply to video bloggers or "vloggers". The ASA found a TV presenter to be in breach of advertising standards by tweeting a picture of Alpro yoghurt captioned “Fave summer snack vibes”. The tweet failed to include any clear identifier that the post was a marketing communication. The ASA similarly found a number of vloggers to be in breach of the advertising standards in paid promotional videos for Oreos. Their statements “Thanks to Oreo for making this happen” were deemed insufficient to alert consumers that it was a marketing communication.
Responding to growing concerns, the Food Safety Authority of Ireland (FSAI) has also introduced guidance outlining the legal requirements when using marketing terms on food.
The recent increase in enforcement activity, and the ASAI’s guidance note, highlight the application of advertising laws to personal blogs and social media platforms.
With fines of up to €60,000 and risk of significant reputational damage, food companies and bloggers need to take note of the Consumer Protection Act and the provisions of the ASAI code. They also need to ensure that paid blogs are clearly identified as ads and comply with the relevant advertising standards.
For more information on this development and how it may affect your business, please contact a member of our Food, Beverage & Agriculture team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.