On 1 March 2017, the Australian Association of National Advertisers (AANA) inserted a new section 2.7 into their Code of Ethics (Code) which provides that advertising and marketing communications “must be clearly distinguishable as such to the relevant audience”.

The Code broadly defines advertising and marketing communications to include “any material which is published or broadcast using any medium or any activity which is undertaken by, or on behalf of any advertiser or marketer”. As such, the amendment to the Code applies to traditional marketers, along with a new generation of “social influencers” that spruik products and services on behalf of marketers across social media platforms such as Instagram and Facebook.

The AANA has also recently released a Clearly Distinguishable Advertising Best Practice Guideline (Guideline) to assist marketers, their agencies and the community to better understand what steps should be taken to ensure advertising and marketing communications are clearly distinguishable to the relevant audience.

When does section 2.7 of the Code apply?

Section 2.7 applies to advertising and marketing communications where the following criteria is met:

1. the marketer has a reasonable degree of control over the material; and
2. the material draws the attention of the public in a manner calculated to promote a product or service.

The Guidelines note that marketers should be careful not to conceal advertising and marketing communications in native advertising (advertising that does not look out of place in the habitat in which it is viewed). However, the Guidelines do not impose a requirement that advertising or marketing communications must be explicitly labelled as such.

Under the Guidelines, marketers are granted discretion to determine how to ensure that material is distinguishable as advertising or marketing communication, but they must take into account the overall appearance of their advertisement when doing so.

Marketers are responsible for the posts of their social influencers, provided they have a reasonable degree of control over the material.

The role of the AANA in enforcing the Code

Whilst the advertising industry is legally obligated to comply with the Australian Consumer Law, compliance with the Code is voluntary for advertising industry members. The self-regulated system is underpinned by a consumer complaints handling system administered by the Advertising Standards Bureau (ASB).

If consumers consider that a marketer or their social influencer are not adhering to the Code, they may make a written complaint to the ASB. In assessing the complaint, the ASB will take into account the “relevant audience”, which is a reasonable member of the target group, and will determine if the two criteria stated in section 2.7 have been met. If the complaint is upheld by the ASB, the advertiser will be asked to remove or amend the advertisement. As the ASB is not backed by statute, it cannot issue fines or take up other enforcement measures if a marketer fails to comply with a request of the ASB. There are, of course, reputational and other potential impacts for marketers to consider before failing to comply with a request of the ASB.

In the context of these amendments to the Code, marketers should carefully consider whether advertising and marketing communications are clearly distinguishable to the relevant audience.