As social media continues to redefine how businesses promote their products and services, it’s hardly surprising that traditional print advertising faces big challenges. Below, we map out how advertising has evolved to reflect changing habits of consumers and what this means for SMEs.  

The User-Controlled Experience

Online advertising has lent itself to the sweeping wave of user interaction and paved the platform for personalised ads through targeted marketing and remarketing. Companies like Facebook use your browsing history and data to show you adverts for items you have recently looked at on your web browser, even if it is on a different website. Consequently, visitors are now also increasingly using ad-blockers on their browsers. The most recent version of the web browser on the Apple iPhone and Samsung Androids also allow users to install ad-blocker extensions.

Advertisers now turn to native advertising, aiming to enhance the user experience instead of disrupting it. Similar to product placement, TV already uses native advertising. For example, reality TV shows such as Masterchef have contestants use a particular brand of butter. Native advertising is used by BuzzFeed, the media company redefines modern advertising and features social news, publishing and advertising on a commercial scale. BuzzFeed allows brands to publish features on its website. For instance, Intel published an article titled ‘15 Things 1980s College Students Did That Would Baffle Kids Today’, and at the end of the 15 images and captions, there is a small advert for new Intel powered tablets. Despite the clever use of native advertising in this feature, does the fact that BuzzFeed accepts contributions from brands compromise its reputability in the marketplace? BuzzFeed does at times publish news features – does this make them news publishers?

Australian Consumer Law and Online Advertising

The most common problem businesses operating online face is making misleading and deceptive claims about products and services. The Competition and Consumer Act contains the Australian Consumer Law in Schedule 2 and prohibits businesses from making misleading or deceptive claims. Justice Perram made special mention about consumer reactions to online advertising in Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761. His Honour pointed out that consumers now give considerably more time and attention to the internet than television, with online advertisements occupying an entire screen and requiring consumer engagement to bypass or close the ad. With data tracking, ads are becoming progressively more targeted and therefore involve a personal element with a closer link to the point of sale. The law applies irrespective of intent or knowledge that conduct would mislead, and therefore, it is important for businesses to the ACCC’s advertising and selling guidelines to make sure they do not breach their obligations under the Australian Consumer Law.

What Lies Ahead

Promoted tweets and paid endorsements on Facebook and Instagram continuously blur advertising’s lines. Controversy arose last year over fashion label Lorna Jane’s unauthorised use of an Instagram post by a Brisbane teenager, Lydia Jahnke. Under Australian copyright law, the author of the photograph (the person who took it) is typically the copyright owner. Copyright infringers may be liable to the owner for damages. While there are exceptions to this rule for fair dealing (such as the use of a photo for the purpose of review, criticism or education), businesses looking for images to promote their products or market themselves, need first to obtain permission or a valid licence. It is, of course, possible that the widespread use of Instagram could, in the future, lend itself to an exception to current copyright laws. People use Instagram as a photo sharing platform, where “reposting” is second nature to Instagram’s use –  and people hashtag their photos often for the purpose of the image being ‘reposted’. But, for now, the legal position remains somewhat unsettled.

Zero Dollar Advertising Budget?

With social media’s seemingly unstoppable expansion, is it realistic for companies to rely entirely on this platform for their advertising? Australian clothing brand BlackMilk apparently spends zero dollars on advertising and instead uses Instagram and Facebook to build brand awareness. BlackMilk relies not only on its use of social media, but it also uses its ‘online tribe’ to grow its brand, inviting customers to post photos of products they have purchased from the site. Customers use Facebook to form connections and friendships with other shoppers. BlackMilk uses its large online community to participate in ‘meet-ups’. At these ‘meet-ups’, BlackMilk invites its fans to come and share their experiences with the brand. Naturally, events like these also attract a lot of social media attention.

Tips for Small Businesses Entering the Online World

There are an abundance of cheap and effective ways of advertising in online communities – including blogging, social media and Google AdWords. While these are effective tools, it is important to keep in mind that you should not make your advertising a constant and invasive aspect of social media. Users hold the power on social media, they can unlike and unfollow brands that clog up their news feeds.

It would also be sensible for businesses to employ social media policies in the workplace, to avoid lawsuits involving misleading and deceiving claims. Businesses may regularly want to monitor their social media and online platforms. A company that seems have struck a good balance is Twitter, which has its own advertising policy, making advertisers responsible for the messages their advertisements promote. 

Key Takeaways

There are signs that traditional advertising is on the way out, especially considering the exponential growth of online communities. However, there are still examples of TV and print advertising staying strong – such as the highly anticipated ads which run during the American Super Bowl, which are arguably more exciting that the game itself! Regardless of the advertising channel, businesses should always remember – know your content, know your target demographic, know your platforms and know your policies.

What do you think? Tag us on Twitter @legalvision_au and let us know.

Lachlan McKnight

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