Thursday, August 09, 2012

What the Facebook ruling from the Advertising Standards Board (that comments are ads) means for agencies

There's been a lot of commentary this week in the media around the decision by the Australian Advertising Board (ASB) to rule that the comments of fans published on an brand's Facebook page are actually advertisements and must comply with industry self-regulation and consumer protection laws.

In face the ruling states that Facebook, and other social media tools, are advertising platforms - which may come as a surprise to long-term users of these services.

The ASB ruling is available as a PDF here. It involved Smirnoff Vodka and stated that content (comments and photos specifically) appearing on the company’s brand Facebook page constituted advertising, regardless of whether the company or members of the public posted it.

That's right - the ASB ruling states that all user comments in social media may be advertising.

The basis for this ruling was a recent legal decision:
The view that brands are responsible for consumer created content on their social media  pages has been supported by a recent decision of an Australian Federal Court (Australian  Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74)1  that a health company was responsible for Facebook and Twitter comments by fans on its  account in defiance of a court order that the company not make misleading claims about its  allergy treatments  The Federal Court concluded that Allergy Pathway was responsible for third-party comments where it knew of them and made a  decision not to remove them from its Facebook page 
Therefore as Smirnoff had the technical capability to moderate user comments on its Facebook page, it had an obligation to do so. If it did not moderate user comments which made untrue claims about the company or its brands (as well as sexist, racist or otherwise unlawful statements) it was guilty of false advertising.

The apparent consequence of the ruling, for organisations who participate in the ASB's self-regulation scheme, is that they are now required to moderate all comments by individuals on their brand and corporate Facebook pages, other social networks, blogs, wikis, forums and social media channels in which they have the technical ability to do so.

This requirement may even potentially extend to platforms outside their direct control but where they can identify and request untrue (or otherwise uncompliant) comments about their company or brand to be removed - such as on Facebook pages or forums moderated by people outside the organisation (such as members of the public).

Some facts

The Australian Advertising Board is the directing group over the Advertising Standards Bureau body appointed to oversee the self-regulation of advertising in Australia by the members of the Australian Association of National Advertisers (AANA).

It is a body independent of government and independent of advertisers. It is not underpinned by any government legislation or policy and it is a voluntary organisation which participating associations, corporations, advertising agencies and other bodies agree to abide by.

Decisions by the Board are neither legally binding nor, necessarily, reflective of government policy.

Where a participating advertiser does not abide by an ASB ruling (which is apparently very rare), the ASB can "liaise with industry and media bodies such as FreeTV, and the Outdoor Media Association which will either negotiate with the advertiser directly for the removal of the advertisement or in specific cases, take action to remove the advertisement."

The ASB may also refer advertisers to an appropriate government body and recommend a course of action.

However the ASB and its secretariat - the Advertising Standards Bureau - has no direct enforcement power, nor any ability to force other parties (such as industry bodies or government agencies) to take action.

Putting the ruling in perspective

This ruling needs to be considered seriously by ASB participants - corporations and advertising agencies in particular.

They need to have a long hard look at whether they can afford to maintain social media channels with the risk that anyone in the community who comments in a channels they can technically control - including, potentially, their competitors - can cause them a world of pain by posting untrue things about them.

I'm not sure if governments participate directly in the self-regulation scheme, however it would be bad form for agencies to ignore direct rulings against their advertising by the ASB.

Is it 'right'?

This is my opinion, but the ASB's position doesn't stand up to scrutiny in a technical, practical or fair sense.

It is based on 20th Century thinking whereby organisations control the channels, and therefore the conversations, with audiences.

In reality this control has slipped almost totally out of the hands of organisations due to the internet and particularly due to social media. Organisations can (and should) control their direct statements, however they can't control the statements of other entities and individuals, beyond having some influence and oversight based on Australia's legal framework around defamation, slander and copyright.

Redefining individual comments as 'advertising' is highly problematic and is a disservice to the already weak freedom of speech provisions in Australia.

If I say on my blog that the Honda Jazz is the best car ever made, it is reasonable to assume that this is my opinion, not an advertisement. If I made the same statement on Honda's company Facebook page this remains my opinion - I am simply directing it at the people who made the car, in tribute to them.

Of course there is an exception if Honda has given me money, privileges, or a Honda Jazz - in which case my comments are advertising and need to be treated as such. (Note that Honda has not given me anything and I've never driven a Honda Jazz, nor wanted to)

Of course this is just about a car - a product. How about if I say on a government Facebook page that, for example, "I think the Fair Work Act is the best workplace relations bill in the world". Would this have to be moderated and removed as, despite it being a potentially heartfelt personal opinion, it is considered advertising (aka - has no facts to back it up)?

Isn't 'opinion' by definition a personal view which may, or may not, be supported by facts?

Apparently not. It's advertising. Hmmm...

Let's take practicality. On a Facebook page with 15,000 fans, 1% being active any week, that's 150 posts to moderate. Assuming it takes 3 minutes on average to assess each, it will take 450 minutes, or 7.5 hours, solid work to moderate all content.

That's possible with a single part-time, trained, moderation officer.

Now let's consider the Tourism Australia Facebook page. It has 3,375,675 fans. If 1% are active in any week, that's over 37,500 posts to moderate. Based on 3 minutes per post, it takes 112,500 minutes, 1,875 hours, or 250 person-days (based on a 7.5 hr work day) to moderate. Each week.

On that basis, Tourism Australia would require at least 50 people (plus extras to cover for leave) to moderate the page to get rid of user 'advertisement' comments which are not evidentially statements of fact, such as these real comments on the page right now:
  • "A very blessed country. It has almost all the best things in life. I love Australia"
  • "Australia the land of grace and tranquility"
  • "Best country in the world"
  • "better hurry to this Whitsunday resort before it too is closed like so many of the others"

What have others said?

Generally industry bodies have come out cautiously and indicated that companies need to digest the ruling and consider its implications.

Those experienced in social media have been less cautious and mostly said the idea won't work (though a minority have said it just reinforces what brands already had to do).

Here's a few articles on the topic as a reference:


  1. Sorry Craig, I think this is an overreaction. Actually, not to put too fine of a point on it, you're scaremongering.

    The Facebook page is clearly designed to promote a brand or product, ergo, it's advertising. Therefore, it's reasonable to ask advertisers to adhere to any standards relevant to their industry, such as not depicting underage drinking.

    And your calculations for moderation are ... um, a little pessimistic. 3 minutes per post? Come on! I looked at the Tourism Australia page and the majority of them could be reviewed in 3 *seconds*. Not to mention that the more correct figure is the 232,000 "talking" users rather than 3.75 million people "liking" the sites.

    So assuming 1% of these "talking" users post directly on that TA page every week and require moderation, that's just 2,300 posts a week * 3 seconds = 2.5 hours/day.

    I file this under "the cost of doing business". If you really don't want to moderate the conversation, use Twitter.

  2. Hi Stephen,

    Adhering to standards is only a small part of the mix. There's also the issue around treating user comments (opinions) as fact. Ergo any comment posted by a user would have to undergo a fact check by the organisation to verify it, otherwise it has to be removed.

    This also doesn't only affect what you classify as advertising - it classifies Facebook as an advertising channel, ergo every page is an advertisement by the decision of the ASB - so has very broad reaching implications for all social media content.

    The cost of moderation isn't simply the time to look at each comment, there's additional overheads in terms of fact checking and archiving moderated comments (which would need to be kept in case they are challenged). It adds up :)

    We're the only country I've been able to identify in the western world where this approach has been taken. Are we leading the world, or lagging?

  3. I'm going to agree with the other Stephen here. It's high time that those using social media for advertising stopped happy-dancing about the benefit user-generated content brings to them.

    I don't believe the ASB ruling brings anything especially new at all. Advertisers have always been responsible for what is said in their name. Certainly the interpretation regarding platform is new, and the law likely hasn't caught up. And that's complexity that needs to be dealt with.

    It's a timely, and frankly, welcome warning that social media isn't and can't be a free for all for advertisers and marketers. And, from my perspective, that's hugely welcome - anything that stops advertising and marketing in its tracks from invading places where humans should be interacting is a good thing.

    That the user-generated social web is a free for all where anything goes is a dream. No matter what we would wish.

    It's up to us, in the jobs we do that involve community management, to ensure that the rules of engagement for our online spaces are followed (what, you mean you *don't* have rules clearly articulated and publicly available?!), so that when we do want to block, edit or take down, we've done the due diligence.

    I think this isn't likely to see a rush of complaints or actions.

  4. I think it's important to look at the future implications of any rulings, and appreciate Craig's summary. I don't believe it's scaremongering or an overreaction IMO. What Craig has provided is his analysis of an issue and encouragement of debate around that issue. There will be all sorts of decisions (judicial or otherwise) that impact on the constantly developing 'rules' tha govern industry conduct, and indeed, what contitutes being considered 'industry', in this area. Well done, Craig.

  5. Another one with the two Stephens. The ASB ruling is correct. Companies are using social media as part of their advertising (look at TV commercials directing viewers to their facebook site) so all content is part of their advertising/marketing strategy.

    It is common sense that any company using social media have an engagement/management strategy. If companies aren't doing this, the ASB has finally knocked some sense into them.

    The same can be said of governments engaging through sociakl media.

  6. "There's also the issue around treating user comments (opinions) as fact. Ergo any comment posted by a user would have to undergo a fact check by the organisation to verify it, otherwise it has to be removed."

    I understand your concern, but I don't think it's as broad brush as checking all statements which could be construed as fact. The question is whether comments made by your social media participants lead to a misrepresentation of your product (or a product of your competitor's). It's quite clear that the reason why Allergy Pathway got pinged was its deliberate non-rebuttal of comments which served as testimonials — and specifically, those testimonials making claims that could not reasonably be linked to AP's products.

    You wouldn't even have to remove the comment to get around this — just correct the record on any misleading statements. This is a practice as old as the annotations found on magazine articles authored by third parties (Ed: like this).

  7. Hi Stephen,

    I think you're understating the point that user opinion online is now fact if it provides any material advantage or disadvantage to any organisation or entity. That's extremely broad.

    Sure there's reason to limit advertising masking as facts or customer opinion, but how about sites that are entirely about opinion - product and accommodation reviews?

    Every review either advantages or disadvantages a company - by default they're now all legally actionable in Australia.

    The broader implications are dangerous as well. Every government agency who advertises will now have a triple think about social media use in their campaigns.

    It's also likely to rapidly extend to any organisation that 'advertisers' (aka has a presence) on social media, such as the local soccer club (the best hotdogs you can get on a Saturday).

    The prospect for mischief is breathtaking - and the redefinition of user comments as advertising is extremely dangerous.

    I believe this ruling is definitely a 'wedge' into refining consumer behaviour online. And I don't think it is healthy nor warranted.

    BTW the ACCC has now weighed in with support for the view: "Large companies that fail to remove false and misleading comments from their brands' Facebook pages within 24 hours face potential court action, the competition watchdog has said"

    That's a lot of weekend moderation :)

    Maybe they will limit it to large companies for now, but I can't see actions against small companies and other entities being too far away, simply because the proportional benefit or damage they can receive through social media 'advertising' (aka user reviews) is huge, often much larger than a large company's experience (on social media anyone can look like a large company).


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