Is User Generated Content Really Advertising?

By | September 3, 2013

Using social media to promote your business

Do you rely on the power of social media such as Twitter and Facebook to promote your business? If so, the buzz created by great social media engagement could constitute advertising, for which you may be legally responsible. This responsibility is in addition to other legal liability that can result from users posting defamatory, copyright infringing or other illegal material on a site you control.

This article looks at differing approaches taken by the Advertising Standards Authority (ASA) in New Zealand and its Australian cousin, the Advertising Standards Bureau (ASB), as to whether user generated comments (UGC) will be considered advertising and subject to their respective codes.

The Australian position

In two widely discussed decisions (see footnote 4), the ASB has concluded that comments posted to a brand’s Facebook page were advertising and that the brand owners were responsible for ensuring compliance with the ASB codes. In one of those cases(see footnote 5), the ASB decided that everything that could be controlled (i.e.: edited) by the site owner was advertising and therefore within its jurisdiction.

The Australian Advertiser Code of Ethics defines ‘advertising’ as:

Any material which is published or broadcast using any medium or any activity which is undertaken by, or on behalf of an advertiser or marketer, and over which the advertiser or marketer has a reasonable degree of control, and that draws the attention of the public in a manner calculated to promote or oppose directly or indirectly a product, service, person, organisation or line of conduct.

The Interactive Advertising Bureau (IAB) in Australia (the trade association representing online advertisers) has, however, commented that it does not consider user comments directed towards an organisation or social media platform to be constituted advertising. These competing positions indicate that there is still some uncertainty surrounding this issue across the ditch.

The New Zealand position

In New Zealand, we have our own codes administered by the ASA and whose rules of interpretation state:

… “advertisement” is to be taken in its broadest sense to embrace any form of advertising and includes advertising which promotes the interest of any person, product or service, imparts information, educates, or advocates an idea, belief, political viewpoint or opportunity… advertising in all traditional media and new media such as online advertising, including websites … [and] [e]mails and SMS messaging that are selling or promoting a product, service, idea or opportunity …

The ASA has also issued a short guidance note indicating a presumption that UGC will not be treated as advertising. The ASA notes, however, that in certain circumstances UGC may be advertising and provides some ‘preliminary areas of enquiry’ for use in that assessment:

  • Did the advertiser originally solicit the submission of the UGC from individuals and then adopt and incorporate it within their own advertising?
  • Did an individual provide the advertiser, on an unsolicited basis, with material that the advertiser subsequently adopted and incorporated within their own advertising?
  • Did the advertiser solicit UGC (e.g.: via an invitation to enter a competition) that resulted in content being posted on the site?

Managing UGC

Where your business invites UGC on social media sites for promotional purposes remember that those comments can become part of your advertising and, potentially, your responsibility. Combine this with potential liability for defamatory or copyright infringing material posted by your users and it’s clear that if you are using social media sites, you need a robust and adequately resourced moderation and takedown function. If you are not pre-vetting UGC before it’s posted to the site, you need to ensure that you monitor what goes up so that you can act quickly if it‘s getting out of hand.

Footnote 4 =   Case Number 0272/12, Diageo Australia Limited, 11/07/12 (“Smirnoff”) & Fosters Australia, Asia & Pacific, 11/07/12 (“Victoria Bitter”)

Footnote 5 =  Case Number 0272/12, Diageo Australia Limited, 11/07/12

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Copyright, NZ LAW Limited. Editor: Adrienne Olsen. E-mail: Ph: 029 286 3650.