Risks and rules when cooperating with influencers
Whisper marketing is nothing new. Customers, especially younger ones, will lean toward a purchase if the good or service is recommended by a friend or someone they trust. They treat traditional advertising with increasing distance and scepticism.
A distinctive feature of online word-of-mouth marketing appears to be the blurring of lines between, on one side, private posts and personal opinions based on the user’s own beliefs or experiences with a product or service, and on the other, professional commercial communications. Consumers seeking information about goods and services are more inclined to take purchasing decisions in line with a recommendation by a favourite YouTuber, vlogger, blogger, or well-known actor or TV personality. Often they just want to buy what they see in a blogger’s post or an Instagram photo. As advocate general Michal Bobek aptly pointed out in his opinion of 14 November 2017 in Schrems v Facebook Ireland Ltd (C-498/16), “[N]owadays there are entire professions that blur the line between private and professional connections in internet communication, in particular on social networks. Some uses might appear to be private, but are entirely commercial in nature. Social media marketing influencers, ‘prosumers’ (professional consumers), or community managers may use their personal accounts on social networks as an essential working tool.”
The reach of online marketing is vast, and the trust that customers place in (mainly) internet advisers is hugely important, as it allows producers to present a new product to various audiences in a way that doesn’t come across as forced or pushy. This aspect is exploited by businesses promoting their goods or services via brand ambassadors or influencers, which can lead to abuses. This problem has been diagnosed in several European countries and in the US, where cases against influencers have been pursued by the authorities and some have reached the courts. Guidelines and recommendations have been developed to help ensure transparency in the behaviour of bloggers and protect consumers. In Poland there are no separate regulations governing the activity of influencers, or rules for cooperation between influencers and businesses. But this does not mean that such activity remains beyond the reach of the law. Authorities are beginning to keep a more vigilant eye on posts by influencers.
Is every post an ad?
A photo of cosmetics, a post lauding a bank account, or a video on preparing a meal: is every statement of this sort an advertisement? As the Supreme Court of Poland has pointed out, “Every ad is a message, but not every message is an ad” (judgment of 26 January 2006, case no. V CSK 83/05). What does this mean for the activity of influencers? Messages on various topics, such as posts, photos or videos, are after all the essence of what influencers do. Is it an advertisement, or still ordinary information?
It can be accepted in simple terms that an objective report, a concise and purely informational, non-evaluative message, may constitute “information.” But a post or vlog that praises, rates, or encourages the purchase of a given product is an ad. As the Polish courts have held, an ad is any statement directed to potential consumers, referring to goods, services, or an undertaking offering goods or services, with the aim of encouraging or inclining the addressees to purchase goods or services. Encouragement may be expressed directly, e.g. by using terms referring to the concrete actions resulting in sale of goods or services, or indirectly, by creating a suggestive image of the goods or services, or of the business entity, to a degree imparting to the addressees an urge to acquire the goods or services. The concept of advertising includes any actions by a business entity intended to create demand by increasing prospective buyers’ knowledge of products, in order to encourage them to purchase products from that business entity (ibid.) Essentially, advertising of goods and services is permissible so long as it is not restricted or excluded by applicable regulations (such as the ban on advertising prescription drugs).
It would be difficult to draw a clear line between information and advertising in the activity of influencers. To be on the safe side, it seems they should treat their posts as ads for products or services and ensure that they do not violate the applicable regulations and are always properly labelled.
Business entities exploiting the popularity of influencers and promoting their products via influencers should also remember that in the case of advertising cooperation, a post by an influencer should not leave any doubt as to its advertising nature.
Advertising contrary to the law exposes both the business entity and the influencer to a risk of civil liability. This may include liability under the Unfair Competition Act and the Unfair Market Practices Act.
Both of these acts aim to combat surreptitious advertising. The Unfair Market Practices Act employs the term “crypto advertising,” defined as the use of editorial content in the mass media for the purpose of promoting a product, where the producer has paid for the promotion but this is not clear from content, images or sounds readily apparent to the consumer. As the Court of Competition and Consumer Protection has aptly pointed out, “The term ‘surreptitious advertising’ in more meaningful to audiences than ‘crypto advertising’” (Warsaw Regional Court judgment of 21 April 2016, case no. XVII AmA 25/15).
Surreptitious advertising occurs when a message is intended to encourage the audience to purchase a good or service, but creates a false impression in the audience that the message is impartial, neutral information about a product (ibid.) The following are examples of practices that could constitute surreptitious advertising:
- Broadcast or publication of an interview by a journalist with an expert who instead of presenting an objective opinion or their own position, recommends a product from a specific undertaking because of business or personal ties with the producer
- A programme in which a product is commented on by “random” passers-by or an audience instructed what to say
- Mention by characters in films or TV shows of a specific, existing product unrelated to the plot (e.g. where the star praises a specific dealership selling the type of car driven by the character) (Supreme Court judgment of 6 December 2007, case no. III SK 20/07)
- Mimicking a news programme through the use of:
- A presenter playing the role in an ad clip of a journalist anchoring a news programme of a station known to the audience from such programmes
- Decorating the studio to resemble the set of a news programme
- Separating ad clips from blocks of televised ad content
- Presenting a survey of seemingly random consumers (Warsaw Court of Appeal judgment, case no. VI ACa 543/06).
If the advertising nature of the message is hidden, and the influencer does not inform the audience of their ties to the producer of the recommended goods, it may constitute impermissible surreptitious advertising (Supreme Court judgment of 6 December 2007, case no. III SK 20/07). The intention of concealing the promotional nature of the message is of decisive importance for finding that a message constitutes surreptitious advertising. The source of the message is irrelevant (Warsaw Court of Appeal judgment, case no. VI ACa 543/06). We will address in the second part of this article how to label a sponsored post to minimise the risk of a finding that the post is unlawful.
Misleading advertising, i.e. advertising giving the consumer a false impression of the goods or services, where the misleading information could impact the consumer’s purchasing decision, is also prohibited (President of the Office of Competition and Consumer Protection, decision no. DDK 4/2009 of 6 August 2009, Veroni Minerali Fit; Supreme Court judgment of 25 May 2012, case no. I CSK 498/11). An assessment of possibly misleading advertising should reflect all of its elements, particularly concerning the quantity, quality, ingredients, method of manufacture, fitness for use, possible applications, repair and maintenance of the advertised goods or services, as well as the customer’s behaviour. A blog post containing false information, or true information that is incomplete, unclear or ambiguous, could be found to be misleading advertising, as could a post omitting certain essential information about goods or services.
Slogans like “the best,” “the only,” “the most popular,” or the like, should also be used with caution. The courts have held that use of such claims may constitute misleading advertising, for example when the evidence does not back up the statement that a particular product is actually chosen more often than others (Poznań Court of Appeal judgment of 10 October 2005, case no. I ACa 221/05). Great care should also be exercised when using disclaimers or asterisks next to ad slogans. Such references should merely clarify the slogan or statement, without altering its meaning (for example when an ad post states that the product is the “best,” but it is explained in the fine print at the end that it is the best only in the history of this specific manufacturer, not in the history of skincare cosmetics in general (Polish Advertising Council, Advertising Ethics Committee resolution of 13 November 2012, no. ZO 127/12, in case no. B/04/12, Nivea)).
For a finding of unlawfulness, it is irrelevant whether the recipient actually followed up and purchased the recommended item. In short, it is up to the seller and the influencer to ensure that a sponsored message is understandable and accurate.
Selected principles for cooperating with influencers
In light of the risks associated with promoting goods or services with the help of influencers, a few principles should be borne in mind.
- An ad is an ad—clear and express labelling of influencer’s post
An advertising post should be clearly labelled as an “ad,” a “promotional text,” or a “sponsored article” (President of the Office of Competition and Consumer Protection, decision no. RBG-61-23/14/JM of 19 December 2014, Express Media sp. z o.o.) The audience should know unequivocally whether they are dealing with a private post or a sponsored post.
Such labelling should appear immediately adjacent to the text (directly over or under it). It is not sufficient to place the notice “sponsored article” at the end of a post or among other labels. Similarly, it may not be recognised as adequate to identify the item as an “advertising text” in a tiny, illegible font.
- Hashtag leaving no doubt as to the nature of the post
Influencers use hashtags (such as #Ad, #Spon, #Advert, or #reklama) to indicate that a post or message is an ad rather a personal post.
Unlike in Germany or the UK, it has not been examined yet in Poland whether a hashtag should be in Polish to meet the condition of clearly and expressly identifying an advertising post, or it is sufficient for example to use a word or abbreviation in English.
In Germany it is insufficient to identify an advertising post with a hashtag in a foreign language (such as #advert). According to German guidelines, use of readymade labels, including hashtags offered by social media sites, may be found not to meet the requirements for clear and understandable identification of an advertising item. It is recommended to label posts with hashtags first in German, and then, optionally, with an additional hashtag in English.
In the UK, the guidelines from the Advertising Standards Authority and the Competition and Markets Authority suggest avoiding unclear hashtags such as #spon or #collab, and recommend labelling advertising posts clearly and directly in the accompanying text (over or under the item, in the lead, or the like).
English undoubtedly enjoys great popularity in Poland, but that does not mean that a hashtag such as #Ad would be readily understood by users. The audience would not necessarily recognise that this identifies an advertisement. So it’s important to ensure that the hashtag used does not generate any doubts. For the sake of clarity, it is worthwhile identifying posts in Polish and additionally in English.
- Content of influencer’s post
An advertising post by an influencer is designed to encourage the purchase of a given product or service. But importantly, the content of the post must not mislead users for example as to the properties of the product, ingredients or the like. It should be ascertained that in the sponsored post, the influencer provides accurate information about the product and its properties. Caution is recommended in posts comparing different products. Comparative advertising is allowed, but it must not conflict with fair practice, meaning for example that it cannot disparage competing goods or services.
- Contract with influencer
The principles set forth above may be embodied in specific undertakings in the contract between the seller of goods or services and the influencer. If the producer works through a marketing agency or influencers’ agency, we suggest examining the agency’s terms and conditions and incorporating them in the contract with the agency.
Moreover, the contract with an influencer may address such issues as dissemination of the influencer’s image, the frequency of sponsored posts, the rules for use of the producer’s materials (photos, product descriptions, trademarks), and dealings after the parties’ cooperation ends (e.g. non-competition).
Dr Monika A. Górska, attorney-at-law, Intellectual Property practice, Wardyński & Partners