The new rules for influencer marketing

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A new influencer code of practice will affect both brands and influencers. Here’s how.

Lisa Marshall

Influencer marketing has emerged as not only one of the fastest-growing ways to attract and maintain customers for a brand, but also one of the most effective forms of inspiring brand loyalty.

But it has to be done right. It has to be authentic and ethical – and there’s now an Australian code of practice that affects PR agencies, talent managers, influencers and brands.

A fashionable female influencer wearing a hat poses for a selfie.

What is influencer marketing?

Plainly speaking, influencers are what most buyers would consider ‘normal people’. They tend to live on social media and share their lives, experiences and wisdom through their channels. The most successful online influencers have a stable of dedicated followers who consider the influencer to be an expert in their niche.

Influencer marketing is when a brand collaborates with an online influencer to market one of its products, services or to increase brand recognition. In turn, an influencer is offered payment, product or a contra offering to endorse the brand to their followers.

Influencer marketing is so effective, that it is globally considered to be one of the only marketing channels that has grown (not declined) in popularity since the beginning of the COVID-19 pandemic.

Sounds fab – what the issue here?

By 2022, it is estimated that the influencer marketing industry will be worth up to US $15 billion – that’s a lot of money. Since the seemingly limitless possibilities were realised, influencers have been cottoning on to new ways to receive a larger slice of the brand incentive pie.

Until recently, brands and influencers did not have to adhere to ethics, and neither party was required to fulfil contractual obligations.

Without regulation, the space was becoming cluttered. Social media posts were becoming bolder and more daring, and it was difficult to identify what was real

An investigation into the rise of social media bots in 2019 showed that a large number of influencers were purchasing fake followers to inflate their importance, thus appearing more influential (and expensive) to brands.

Ethical issues have been unveiled, such as revealing personal, yet ultimately fake, health problems and cures for self promotion. These unveilings, coupled with numerous ethical issues, prompted the rigorously strict Australian advertising bodies to take action.

What are the new rules? 

On July 1, 2020 The Australian Influencer Marketing Council (AIMCO) released the industry’s first Influencer Marketing Code of Practice.

The code is designed to reflect the organisation’s principals of being transparent, retaining best-practice, and being accountable.

The code is not designed to be one-sided. It impacts anyone working within the influencer marketing industry, including PR agencies, talent managers, the influencers, and even the platform service providers.

The code can be divided in to four sections.

1. Selection and qualification

The brand or marketer must be able to access the influencer’s audience demographics and details to ensure authenticity. The influencer must also disclose brand relationships. The influencer must also complete a vetting process on the brand to ensure that the brand is safe and authentic.

A screenshot from Instagram. It shoes social media influencer @mikaylahhlauren eating granola. In her text she uses the hashtag #ad

Influencers must now use hashtags #ad or #sponsored for paid social media posts.

2. Advertising disclosure 

The posts must be in line with Australian Consumer Law and must not deceive, mislead or make false statements. All posts must feature #Ad or #Sponsored so that followers are aware that the endorsement is part of a collaboration.

If the influencer is representing the brand through a video platform, it must be declared within the first 30 seconds of the video.

3. Brief and contracts

It is recommended that a valid and binding contract be entered into between the brand/intermediary and the influencer for each influencer marketing campaign.

The suggested areas included cover:
  • Intellectual Property Rights – creation, usage, moderation and review
  • Reputation and brand safety
  • Legal or industry code compliance
  • Remuneration.

4. Metrics and reporting

Both the influencer and brand are required to provide metrics, and their source to ensure consistency.

What if I don’t want to follow the code of practice?

You have to, or you could face a hefty Australian Consumer Law fine, and potentially cause irreversible damage to your brand. Which rules apply can depend on the platform you're using. For example, Instagram has its own guidelines on sponsored content. While ultimately the platform is responsible for advertising and partnership disclosure, it is important to adhere to the Australian code of practice rules.

The new code of practice helps brands to experience fewer problems, and helps influencers to gain more authentic followers through their targeted content.

To strategically use Instagram to get results, read our article on how to get the most out of influencer marketing.

Lisa Marshall, account director

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