Remember when celebrity influencer Kim Kardashian was fined $1.26 million dollars by the United States Securities and Exchange Commission for not disclosing a sponsorship in her Instagram post? This has been reflected across the influencer marketing industry and around the globe with strict policies on sponsored posts.
If a sponsorship/partnership tag is unavailable, then influencers must use the hashtag #ad or #gifted to avoid any repercussions.
The Australian Competition and Consumer Commission (ACCC), recently reported that they would be launching a national sweet of online social media platforms such as Instagram and TikTok whether influencers are getting paid for product placement. Those with a large following and frequently posting about any gifts, partnerships, or collaborations are told to tell authorities about any deals or income streams they have negotiated with a business or brand.
What about businesses?
It’s not just the influencers who will face penalties, but companies will also face up to $50 million in fines for breaching.
Some influencers fear that disclosing partnerships will tarnish personal brands and therefore why influencers sometimes avoid putting that information. However, as the influencer marketing industry is currently growing rapidly, authorities are slowly creating guidelines to ensure the safety of online information that is being distributed around.
Hashtags like #SponsoredContent do sometimes look like the product is forced onto viewers, but this is now a requirement for every influencer to do. It is the influencer’s job then to think about whether the product aligns with their brand and create a niche profile.
Magnifying glasses on influencers
As previously mentioned, the influencer marketing industry is growing quickly and now, the term influencer is changing and adapting to the current market. Not everyone looks at influencers who have millions of followers, but micro-influencers with a dedicated following and niche knowledge. Businesses look for and want profiles now that have high user engagement rather than millions of followers because they want their brand and story to really capture a tighter audience than an audience that is too big and reaching too many people from different niches’.
Australian social media podcaster Amy Taeuber said “I think at the moment the influencer space is like the wild west. There are a lot of influencers who are failing to actually disclose if a post is a paid ad.” She continued to say that many things that are happening “are unregulated and I think there’s a lot that needs to change.”
Australian Taxation Office (ATO)
It is not just the ACCC who are making regulating influencers, but the Australian Taxation Office (ATO) has made significant changes to gift policies in particular. Products that have been gifted or donated and advertised now have to be declared at tax time. Anything from a free lipstick or a free travel holiday will need to be declared.
Influencer marketing to be taken seriously
With so many policies in place and more soon to come regarding influencer marketing, it shows the seriousness of the industry to businesses who are looking to hire influencers for campaigns or marketing. The industry is booming at the moment with the new social media platform TikTok also getting billions of users a month.
It’s a positive step for influencers to take their work seriously and know it’s not just for fun but things are now being regulated, but also an opportunity for companies to get serious about their advertising streams.
Nowadays, everyone wants to quit their 9-5 jobs and become an influencer as they think they will have an easier life. It’s true, there are more opportunities when you have a good following on social media to be gifted or invited to “invite only” events. However, now the online market is competitive, there needs to be structure. The internet is like the ocean, but unlike the ocean and swimming free, the internet can be harmful and misinterpreted if used wrongly.
These regulations being put on influencers in Australia need to be taken seriously worldwide as the industry continues to thrive and change.
Stay updated on all of the latest news by subscribing to the ITP Live newsletter below or by clicking on the push notifications.