Online marketing: A one-way street once more?

Social media is a great way for artists and arts organisations to connect with people, promote their work and grow their reputation. However, recent developments in the world of online marketing have dramatically changed the way organisations and individuals should use social media websites as promotional tools.

In a move which may redefine the landscape of online promotion and advertising, the Australian Advertising Standards Board decided this July that social media websites like Facebook are to be considered a ‘marketing communication tool' and thus subject to regulation as if an advertisement.  The case concerned user comments on Smirnoff vodka's official Facebook page that were alleged to be racist, obscene, and encouraging of irresponsible drinking.  The ASB made it clear that if a Facebook page is being used for promotional purposes, everything appearing on that page is to be considered advertising and subject to industry regulations.  As a consequence, anybody that uses social media to promote their products or services are responsible for ensuring that all content on these sites is in compliance with the Advertiser Code of Ethics, including content posted by users.

A few weeks later, the Australian Competition and Consumer Commission followed the ASB's lead, threatening penalties and court action against Facebook users that interact with or fail to remove comments on their promotional pages that don't comply with advertising standards.  Commenting on a second case in front of the ASB, this time relating to homophobic and misogynistic comments in response to a question asked of consumers on VB beer's page, the ACCC commissioner stood by the ASB, saying that large companies should be given 24 hours to remove infringing fan-produced content from their social media sites. 

The ASB's decisions follow from a federal court case in 2011 relating to the ACCC's finding that advertisers on Facebook are liable for any misleading information about theirs or competitors' products appearing on their pages, regardless of the information's origin.

Though the ACCC might be more reasonable with the timeframe for removal of inappropriate comments from the pages of advertisers which (unlike Diageo and Fosters) lack the ability to constantly monitor their Facebook pages, these rulings are no less applicable to small and medium sized businesses.  Whether a Facebook page is promoting a household brand or a local restaurant, user-comments that violate advertising regulations are a no-go.

These two closely related decisions are already having a profound impact on how online marketing is conducted, as advertising industry leaders scramble to create new guidelines for use of social media.  A big concern among marketing experts, many of whom were quick to decry the decisions, is that this will be a big step backwards for companies in how they interact with their consumers.  Advertisers now face legal risks in inviting public discussion of their products and engaging with consumers on their social media pages.  The decisions by the ASB, which could easily stunt the development of social media as an accessible and valuable tool for closing the gap between advertiser and consumer,  leaves the future of online marketing in Australia an open question.

John Swinson is a Partner at King & Wood Mallesons specialising in intellectual property and technology law.

Share this article


All Prices are in Australian dollars and include GST


Arts Law does not offer refunds or exchanges on sample agreements or publications. For other items please contact us

Any Questions?

Please contact us if you have any questions