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Affiliate marketing has become increasingly popular in New Zealand and around the world. In particular, influencers have latched onto this model and have used it to monetise their content. Affiliate marketing is the practice of websites or influencers referring their audience to other business’ products in exchange for a commission or some form of compensation. This model allows businesses to reach a wider and more targeted audience, depending on the influencer they choose to partner with. In practice, there are three parties involved in affiliate marketing. They are the:

  • advertiser
  • influencer; and 
  • the consumer, which is your audience. 

However, if you are promoting these affiliate links, it is important that you are aware of the laws around affiliate marketing and how they might affect your influencer marketing business. This article will explain the applicable laws to affiliate marketing.

What Is an Influencer?

You must first understand what an influencer is before looking at how to stay within the law. The Advertising Standards Authority defines an influencer as anyone who is paid to promote ad content online. The person’s following or audience size is irrelevant. Therefore, if you are considered an influencer, you must ensure that you follow the legal tips below.

What Is Considered an Ad?

According to the Advertising Standards Authority, an ad is anything that an advertiser directly or indirectly controls for payment. This includes any affiliate marketing link that you post in exchange for a commission or payment.

5 Legal Tips to Stay on the Right Side of the Law

1. Labelling Your Ad

Always make it clear that your link is an ad. This can be done in many ways, but adding a #ad or #gifted label will generally do the trick. The key is to make sure that your audience knows upfront that whatever you are promoting is an advertisement. 

For example, this means that if you are using an Instagram story to promote your link, the label should be on the first slide of the story. Your audience must also be able to understand the label easily, and it must be separate from any other hashtags or indicators.

Influencers may believe that a blanket label in their profile bio is enough. However, this is not the case, as you must clearly label every separate link as ad content. 

2. Test the Product

The last thing you want to do is advertise a product that your audience is not happy with. This means making sure that you try the product before displaying an affiliate marketing link. Protecting your reputation as an influencer is important. You could open yourself up to claims of misleading advertising or deceptive conduct by recommending a product that is completely different to what you advertised, and further, you could be charged.

3. Research the Company

Always make sure that the company you are advertising for is legitimate. Social media is a breeding ground for scams and false information. Every day, influencers will get messages from so-called ‘businesses’ asking them to advertise their products. Although these businesses are generally legitimate, there are a few who are just out to make a quick buck out of you. You should always research: 

  • the company that you are advertising for; and
  • whether other influencers are promoting their links. 

If there is not much information on a specific business, you may want to rethink whether you want to take the risk of advertising for them. 

4. Certain Products Have Stricter Rules

Some products have specific rules when it comes to advertising them, and this includes affiliate marketing links. For example, age-related products such as alcohol must follow the Code for Advertising and Promotion of Alcohol. Additionally, the Association of NZ Advertisers has an approval service for:

  • therapeutic and health advertising; 
  • alcohol advertising and promotion; and
  • advertising targeted to children and young people. 

This tool allows you to check what extra steps you need to take when promoting these types of products. 

5. False Claims About the Product

You should never make false claims about a product that you are advertising. Any claims made about the product you are advertising should always be true. This also includes any claims about the company. If you are caught making a claim about a product that is considered untrue, you could be liable for a fine. 

Key Takeaways

Influencers must be cautious when promoting affiliate marketing links. You should use the tips above to stay on the right side of the law. Anyone in breach of the relevant laws could be liable for fines or asked to take the content down by the Advertising Standards Authority. Further, this could negatively impact your reputation as an influencer. Remember always to label your ad content and do your research before agreeing to promote an affiliate marketing link. If you need legal assistance with affiliate marketing links, contact LegalVision’s e-commerce and online business lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Is it still considered ad content even if you don’t have a large audience?

Yes, anybody who is promoting social media content in exchange for payment is considered an influencer. As such, they must follow the guidelines when posting ad content.

Can I be punished for breaking the rules?

Yes, the Advertising Standards Authority can fine you for a breach of rules or can force you to take your content down.

Is there a hashtag that I cannot use to indicate an ad?

Yes, you should not use #sp or #collab as it is not clear to the consumer what these may mean. It must be sufficiently clear that your post is an ad. 

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