Facebook user-generated content is advertising - in Australia, but not NZ

Rick Shera

Amid renewed controvesy over the #ad issue as bloggers and journalists on Twitter promote the Theresa Gattung-backed My Food Bag, Rick Shera takes a look back at a key Australian decision on user-generated content being used in ads, and new NZ guidelines.

COMMENT

A decision of the Australian Advertising Standards Bureau (ASB) should send a warning to advertisers - and not just in Australia.

In the decsion, the ASB found that Diageo's Smirnoff Facebook page did not breach the Australian Advertiser Code of Ethics because the material complained of was not "contrary to Prevailing Community Standards on health and safety".

So far so good for advertisers you might say.

But before it got to that point, the ASB specifically disagreed with Diageo's argument that not everything on a Facebook page is an advertisement.  Yes, you read that right - in the ASB's view everything able to be controlled (i.e.edited) by the site owner is an advertisement, including all that great customer generated engagement.

The key line from the ASB decision reads:

As a Facebook page can be used to engage with customers, the Board further considered that the Code applies to the content generated by the advertisers as well as material or comments posted by users or friends.

So, in the ASB's view, user generated content (UGC), as it is called, is advertising and within its jurisdiction. If a piece of UGC contravenes the Code, the ASB considers itself able to sanction the Facebook site owner (the content did not in this instance, luckily for Diageo).

In New Zealand, we have our own Codes administered by our Advertising Standards Authority. So how do they compare on this point?

Here's the ASB's Code's definition of advertising (quoted from it's Smirnoff decision):

Any material which is published or broadcast using any Medium or any activity which is undertaken by, or on behalf of an advertiser or marketer, and over which the advertiser or marketer has a reasonable degree of control, and that draws the attention of the public in a manner calculated to promote or oppose directly or indirectly a product, service, person, organisation or line of conduct.

Compare that to the New Zealand ASA's rules of interpretation for its Codes, which state:

The word "advertisement" is to be taken in its broadest sense to embrace any form of advertising and includes advertising which promotes the interest of any person, product or service, imparts information, educates, or advocates an idea, belief, political viewpoint or opportunity. The definition includes advertising in all traditional media and new media such as online advertising, including websites. Emails and SMS messaging that are selling or promoting a product, service, idea or opportunity are also covered by the codes, as are neck labels or promotions attached to a product Other examples include posters, pamphlets and billboards (whether stationary or mobile) and addressed or unaddressed mail.

The main difference between the two is that the Australian definition makes specific reference to the advertiser having a "reasonable degree of control".  I can understand why the ASB has taken that to include non-advertiser generated material such as UGC.  There is no need for those words otherwise, since, obviously, advertiser generated material is within its control - it goes without saying. The words must be intended to refer to something else.

In a sense it comes back to that hoary old online conundrum - exercise editorial control to maintain standards on your site and you're likely to take on liability; exercise none and you probably won't, but your site might not be a place people want to visit.

The New Zealand rules of interpretation are silent on this control issue though. One could therefore argue that the New Zealand Codes are only intended to apply to advertiser generated material and not to UGC. However, the rules do also say that the word "advertisement" to be taken "in its broadest sense". Words like that always fill black letter lawyers with trepidation

It's a little difficult to trawl through the ASA's website to see if this issue has come up before but, if the ASA hasn't ruled differently, I'd not want to be betting against it following the Australian lead.


UPDATE 1:

Several people have directed me to a decision issued on the same day, where the ASB determines that UGC on a Fosters Australia Facebook page for VB breaches the Code of Ethics  - so there we have it.


UPDATE 2

The New Zealand Advertising Standards Authority has issued a short guidance note which takes a different approach to the ASB. 

The ASA note effectively creates a presumption (although it doesn't call it that) that UGC will NOT be treated as advertising and will be outside the ASA's jurisdiction.

The ASA then notes however that there may be certain circumstances where UGC IS advertising and, helpfully, provides some "preliminary areas of enquiry" that it will use to assess this:

Did the Advertiser originally solicit the submission of the UGC from individuals and then adopt it and incorporate it within their own advertising?

Did an individual provide the Advertiser, on an unsolicited basis, with material that the Advertiser subsequently adopted and incorporated within their own advertising?

Did the Advertiser solicit UGC (for example via an invitation to enter a competition) that resulted in content being posted on the site?

The note also warns of the dangers of retweeting customer's tweets (in case they are misleading) and requires people who are paid to tweet support for a product or service to add the #ad hashtag so that the endorsement will be obvious.

New Zealand and Australia are just dealing with something that has long been an issue in the US.  In 2010, the Federal Trade Commission updated its 1980 guidelines to add examples relating to online endorsements via blogs and social media platforms like twitter.  The notes and official guide (pdf) have some useful background and are worth a read by New Zealand advertisers even if not directly applicable here.

Of particular relevance to the #ad hashtag issue mentioned above, the FTC comments:

If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.

By connection, the FTC is referring to payment in cash or by means of free or discounted products.

It's pretty obvious really, if you're reading a tweet which endorses a product, it makes a difference (to me anyway) knowing that the person got the product for free or was paid for the tweet.

Rick Shera is a partner at Lowndes Jordan.

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