In Short
- Clearly label sponsored content to avoid misleading customers.
- Make sure your advertising claims are provable, not just exaggerated.
- Adhere to privacy laws when using customer data for targeted ads.
Tips for Businesses
When advertising on social media, ensure any endorsements or sponsorships are clearly labelled, avoid misleading claims and only make statements you can prove. Always comply with privacy regulations, especially when using customer data for targeted ads, to avoid potential legal issues.
Social media has dramatically changed how businesses advertise online, and you would be missing out on Social media has dramatically changed how businesses advertise online, and you would be missing out on customer opportunities if you did not take advantage of that reach. Customers, especially younger ones, may be more likely to engage with your business if they can access it easily through social media portals. However, you need to be careful not to invite legal issues when you operate on social media. Otherwise, you could face financial and legal penalties that could damage your business’ reputation. Therefore, this article will go through six legal tips for advertising on social media.
1. Clearly Identify Advertisements
Customers will clearly understand that posts from your own page with your own branding will be advertisements for your business. However, the line between advertisement and genuine content can become blurry when you engage social media influencers to promote or advertise your products.
According to the Advertising Standards Authority (ASA), an advertisement is a message with the intent to influence the choice, opinion, or behaviour of those it addresses. Indeed, this means that when you pay someone on social media to post about your products, you intend for their promotion to induce their followers to buy your goods.
When you do so, the influencer needs to identify these posts as advertisements clearly. For example, including #ad or #sponsored in the advertisement may qualify as clear identification. But, #sp or #collab likely will not.
2. Do Not Overuse Fine Print
The rule not to overuse fine print applies to all advertising but is especially important on social media, where misinformation can quickly spread. It is against the law to mislead your customers, and any disclaimer you attach to an advertisement does not cancel out its misleading nature. The overall message of your advertisements needs to be accurate. This is to ensure customers do not purchase your products due to a reasonable misconception.
If you need to use a disclaimer or any fine print, ensure that it is easily visible and understandable. For example, say that you post an advertisement promoting the healthy nature of your products on Instagram. If you include a disclaimer under the ‘read more’ section under the post, this is not clearly visible. Most users will quickly scroll past and rely on the image and the first few words of your comment to form an opinion.
Continue reading this article below the form3. Be Clear About Your Prices
The previous tip also applies to how you advertise the prices for your goods on social media. These prices need to be accurate and not include any hidden fees. You need to explain whether:
- the total price you advertise covers GST; and
- any extra fees or surcharges apply.
For example, you may advertise an upcoming sale on Twitter, claiming that you will sell your clothing products at $40 apiece. A reasonable customer would assume this would be the total price they pay. If this is not the final price, then you may have misled them with your tweet.
4. Do Not Make Claims You Cannot Prove
When advertising on social media, you will likely rely on attention-grabbing slogans or images to engage your customers. For example, you may highlight the sustainable nature of your goods, focusing on their environmentally friendly points to draw customers.
When you make claims of this nature about your products, you need to back them up with evidence. Especially with environmental claims, you need to rely on science and facts.
This does not apply when you clearly exaggerate advertising around your products, which qualifies as ‘puffery’. Most consumers realise that most advertising involves exaggeration and will not rely on any statements of this nature. However, when these exaggerations rely on facts rather than opinions, you need to worry about misleading your customers.
For example, advertising that “Kiwis all over love our beanies” relies on opinion and is likely puffery. However, claiming that your products are “100% Kiwi made” relies on a fact, and you need to be able to prove that.
5. Advertise With Privacy in Mind
Many social media platforms let you use their third-party advertising services for engaging your customers. For example, Facebook lets you upload lists of email addresses, and it will advertise your business’ page to the Facebook accounts that have those email addresses.
When you use these third-party services that use personal information, you need to ensure your customers know that you are using their information in this way. Otherwise, you break their trust and can incur legal penalties.
Therefore, when you collect customer email addresses to use them for advertising, you need to tell your customers this at the time of collection.
6. Know Product Specific Advertising Laws
Some products will have certain restrictions about how your business can advertise them. One of these examples is alcohol. In New Zealand, you could face legal penalties if you promote excessive alcohol consumption in your advertising or target minors. This is especially important on social media, where minors are more likely to see any of your advertisements.
Therefore, if you sell any age-restricted products like alcohol or similar, you need to make sure you follow any specific advertising laws that apply to those products.
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Key Takeaways
Advertising on social media can be highly effective for your business when drawing in new customers. However, whenever you conduct such a promotion, you need to ensure you do so in line with the law.
If you would like more information or help with advertising on social media legally, our experienced regulatory and compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.
Frequently Asked Questions
Social media marketing can be helpful for your business because it can raise brand awareness and help you reach your target audience. You advertise on social media platforms according to which sites your customers access the most.
A social media influencer is someone who operates on social media and influences the opinions of their followers. In addition, they often engage with brands for sponsored ad campaigns and endorse their products.
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