Brand and influencer collaborations are a key component in marketing products and services, as highlighted in our article on Like & Follow! What to know when #advertising with #influencers. Ad Standards recently updated its Influencer Guidelines (the “Guidelines”) which, along with the Competition Bureau’s guidance on Influencer Marketing and the Competition Act, sets out expectations in Canada for influencer marketing.
As before, the Guidelines highlight three clauses from the Ad Standards Code as being the most relevant to influencer marketing disclosure:
Clause 1 (Accuracy and clarity) – Advertising must not omit relevant information if the omission results in the general impression of the advertising being misleading or deceptive. In the case of influencer marketing, omitting disclosure of a material connection may be considered misleading.
Clause 2 (Disguised advertising techniques) – Advertising should not conceal that it is an advertisement and disclosure should be “upfront and identifiable” (e.g., avoid ambiguous disclosure hashtags or burying the disclosure hashtag in the post).
Clause 7 (Testimonials) – Representations should be current, genuine, and based on adequate information or experience. The viewer has the right to know about the material connection between the reviewer and the entity making the product / service, which is why clear and prominent disclosure is essential.
The key change compared to previous versions of the Guidelines is that examples and best practices are now based on the type of post (e.g., static, character-limited, video, story, blog) instead of the specific social media platform (e.g., Instagram, Twitter, YouTube, TikTok, Snapchat). Given the number of social media platforms continually being launched, general principles rather than specific rules help industry comply across a broad range of platforms.
The Guidelines also have a few changes in its “Do I Need to Disclose?” chart:
- “Well-known Partnerships” – Although the guidance for this example (previously referred to as “Code Exception” rather than “Well-known partnerships”) has not changed, the icons visually depicting whether disclosure is required has changed from a Red X (i.e., no disclosure required) to a Yellow ! (i.e., caution, meaning whether disclosure is required will vary), to better reflect that, unless the partnership is obvious, explicit disclosure is necessary.
- “Gifted product but no endorsement” – The Guidelines now explain why it must be clear that an item has been gifted, namely that without such information, the implication is the influencer chose to purchase the item, amounting to an endorsement. The icons visually depicting whether disclosure is required have changed from a Red X (i.e., no disclosure required) to a Green checkmark (i.e., disclosure required).
- Avatar – New examples relating to avatar influencers have been added. Both Ad Standards and the United States Federal Trade Commission (“FTC”) now make clear that just because an avatar is not a real person does not impact the requirement to disclose a material connection. Ad Standards also explicitly says the avatar should not provide a testimonial that it obviously cannot experience (e.g., “this food sure tastes great!”). See our previous article on Marketing & advertising tips, traps and trends for 2023 for commentary on virtual influencers and the important nuances to consider.
Although Ad Standards and the Competition Bureau offer important guidance on appropriate disclosure for influencers, these are not the only organizations requiring disclosure. Sector-specific guidance exists too. For example, dieticians may also be subject to their provincial regulator’s requirements on endorsements (e.g., College of Dieticians of British Columbia’s Marketing Standards). Dietician influencers are one group currently under significant scrutiny by both the media and regulators in relation to their relationships with the food industry. The FTC in the United States just sent a warning letter to both The Canadian Sugar Institute and two British Columbia-based dieticians because the FTC did not believe the dieticians’ social media posts were sufficiently clear and conspicuous regarding their connections to the Canadian Sugar Institute.
In addition, many social media platforms also have their own relevant terms and conditions. For example, YouTube requires influencers to disclose to the platform whether their video includes any paid promotion so the platform can add a 10-second disclosure message (e.g., “paid partnership”) at the beginning of the video. This requirement is not necessarily a substitute for what is required by regulators but, rather, an additional requirement. Non-compliance with a social media platform’s terms and conditions can result in significant consequences, including removal of problematic content, reduced score in the platform’s ranking algorithm, and potentially disabling of the account. Typically, these consequences are triggered by complaints or takedown notices filed by third parties. Since the consequences can occur quickly and without warning, compliance with any disclosure requirements is prudent to pre-empt competitors capitalizing on this omission and disrupting businesses.
In navigating this regulatory environment, influencers and marketers must consider national standards, industry-specific rules, and platform terms to maintain legal compliance and credibility in the dynamic realm of influencer marketing.
If you have any questions or would like further information, please contact a member of our firm’s Marketing and Advertising group.
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Alice Tseng is a Principal in the Smart & Biggar’s Toronto office. Alica is recognized as one of Canada’s leading regulatory lawyers. She has more than two decades of experience adeptly counselling clients in highly regulated industries like pharmaceutical, cannabis, food, medical devices and cosmetics. Informed by her expertise as a practising pharmacist, Alice has advised many pharmaceutical companies on important issues encompassing biologics, controlled drugs and substances, immunotherapy, orphan drugs, vaccines, OTC drugs and natural health products.
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Alexandra Johnson Dingee is an Associate in the Smart & Biggar’s Toronto office. Alexandra is a trademark lawyer committed to protecting and preserving the integrity of brands and intellectual property. She provides clients with exceptional trademark clearance and prosecution services and advises on all areas of trademark law with precision and expertise.