A recent ruling by Australia’s Advertising Standards Bureau raises questions about the use of, and potential issues related to, social media marketing. In its ruling, the Bureau stated companies are responsible for the content posted to social media pages promoting their brands, including material and content posted by users or friends of the account. The Bureau found that companies are required to monitor their pages and related-to posts to make sure such posts aren’t misleading or defamatory and are in compliance with advertising decency standards as set forth by the Australian government.
This decision highlights how different countries are approaching social media advertising standards and the lack of consensus among global regulatory bodies over what constitutes advertising versus free speech. Just last month a decision was reached by the U.S. National Advertising Division (NAD) of the Better Business Bureau, in which the NAD reviewed a Pinterest board maintained by weight loss company NutriSystem and determined the weight-loss success stories “pinned” to the board represented consumer testimonials and required the complete disclosure of material information.
Within the direct sales channel, like virtually all industries, the use of social media continues to be pervasive. With such online activity, the use of social media platforms such as Facebook, Pinterest and Twitter will continue to be more highly scrutinized by regulatory bodies and it is important that companies educate their independent distributors about what is and what is not permissible when using social media. Additionally, it is essential that executives stay abreast of new regulatory developments as the use of social media becomes more and more widespread so as to best protect their companies from future action by regulatory bodies.