Today, social media influencers are a key resource used by businesses to engage with consumers. Influencers include celebrities, bloggers or simply popular social media users in speciality areas like beauty or travel. Social media influencers’ posts can attract thousands, and sometimes millions, of views and likes. Such exposure allows businesses to instantly engage with a huge audience. So, with over 70% of Australians now on social media, it is no surprise that Australian organisations are spending more and more on digital and social advertising.

Influencers can earn thousands of dollars per post and sometimes more – a single Instagram post by Beyoncé allegedly has an advertising value of one million US dollars. The value add and engagement that businesses can achieve from social media influencers is undeniable but, with the introduction of new regulatory guidelines in Australia, businesses should carefully consider how to optimise social media as a platform for promoting their brands, products and services.

The commercial benefits of engaging social media influencers

The success of influencer marketing is driven by a strategy that relies on targeting consumers on their phones and computer screens, somewhere that consumers are near on guaranteed to look. Instead of pushing advertising where it may or may not be seen by the target audience, companies can now engage with digital consumers directly. The benefits of influencer marketing can include:

  • creating authentic content to drive engagement with a brand;
  • cost effectiveness compared to traditional media spend; and
  • reaching younger audiences who are less trusting of traditional advertising.

A recent US study found that over 90% of marketers who used influencer marketing found it to be effective and over 35% of marketers planned to increase their influencer budget in 2018.

The risks of engaging social media influencers

Despite the benefits of influencer marketing campaigns, recent scandals have exposed the risks associated with choosing to partner with a social media star. In 2012 Oprah Winfrey, partnered with Microsoft to promote their new Surface tablet. In a tweet, she expressed her “love” for the Surface product but, in an oversight, sent the tweet via her iPad. In doing so, she failed to realise that the tweet included information on the device she had used to publish the post.

Businesses should also be aware of the threat of ‘instafraud’ (the use of bots to create fake social media accounts which are used to build a following) to ensure they are not paying to reach fake followers. Although buying followers, likes and comments violates the community guidelines of most social media platforms, in the past, companies have been tricked into paying for posts with no genuine following.

The law in Australia

While there are no specific consumer laws or rules in place for social media, consumer protection laws that apply to conventional marketing and sales channels, apply in the same way to social media.

The Australian Competition and Consumer Commission (ACCC) recently issued new guidelines for businesses on the use of social media. The guidelines repeatedly emphasise that, as far as the Regulator is concerned, organisations have the same responsibilities in relation to social media as they have for all other marketing channels. This means that consumer protection laws, like the prohibition on conduct that is misleading or deceptive, is just as applicable to a Facebook post as it is to a television advertisement. We have written more generally on the guidelines in the past.

Various organisations have come under scrutiny for paying Instagrammers for endorsements, without disclosing that those endorsements have been paid for. The Australian Association of National Advertisers (AANA) has updated its guidelines and the AANA Code of Ethics to require that “advertising or marketing communication must be clearly distinguishable as such to the relevant audience“. The AANA’s Code of Ethics applies to advertising and marketing communications where the marketer has a reasonable degree of control over the material and the material draws the attention of the public in a manner calculated to promote a product or service.

Breaching the AANA’s Code of Ethics is unlikely to result in a large penalty, but a breach of Australian Consumer Law, for misleading or deceptive conduct or for making misrepresentations, is a serious offence and can result in significant financial penalties. To date, there have been no cases made against social media influencers in Australia, but it is well established that testimonials have to be accurate and true. In ACCC v Advanced Medical Institute Pty Ltd[1], Ian Turpie, who hosted The New Price is Right, gave a testimonial in an advertisement that an erectile dysfunction spray had restored his sexual potency. The ACCC brought an action against Mr Turpie, the brand (AMI) and the advertising agency on the basis the advertisement was misleading and deceptive because Mr Turpie had not suffered from impotence and had not been treated by AMI.

Key takeaways

  1. Do your research. Review the chosen influencer’s previous posts, follower audience, previous campaigns and successes, and consider hiring an expert to determine whether the profiles are genuine;
  2. Ensure influencer agreements include termination provisions (to ensure that promotional partnerships can be ended quickly, if necessary), non-compete provisions (to ensure the influencer will not promote a competing brand for a specific period of time), and provisions which allow for the monitoring and amending of posts during the course of the influencer’s engagement;
  3. Be clear and open in your use of online influencers, and ensure your chosen influencer distinguishes sponsored content by using #ad and #sponsored or similar;
  4. Despite the differences, treat influencer marketing as you would any other form of marketing and ensure provisions are in place to minimise the risk of publishing false, misleading or deceptive content; and
  5. Be prepared to react immediately, at least within 12 hours, if issues arise with posts published by chosen social media influencers.


[1] Australian Competition & Consumer Commission v Advanced Medical Institute Pty Ltd (No 3) (2006) 69 IPR 462