As businesses continue to explore innovative ways to engage their target audience, influencer marketing and digital advertising (ads) have become increasingly popular. This marketing strategy presents significant opportunities for businesses and influencers alike. It is however essential for all parties involved to understand the legal implication of their activities to avoid potential legal pitfalls.
In this newsletter we highlight key legal aspects of influencer marketing and digital advertising which businesses, influencers, and digital marketers need to consider.
What is Influencer Marketing?
This occurs when businesses collaborate with individuals (influencers) who have a substantial following or influence on social media platforms, blogs, or other digital channels to promote products, services, or brands to their audience, leveraging their credibility and trust.
What is Digital Advertising?
This involves using online platforms, websites, and digital channels to promote products, services, or brands. This includes various strategies such as display ads, search engine marketing (e.g., Google ads), social media ads, email marketing, and video ads, all targeted toward specific demographics or user behavior.
What You Need to Know
1. Advertising and Marketing Content
As the primary regulatory body for advertising in Nigeria, the Advertising Regulatory Council of Nigeria (ARCON) sets the rules governing advertising activities, including those in the digital space, such as influencer marketing campaigns and online ads. The Advertising Regulatory Council of Nigeria Act (ARCON Act), the Code of Advertising Practice, and the Vetting Guidelines establish specific principles and requirements for advertising and marketing content and materials. Some key considerations include:
- Advertising and Marketing Principles: Marketing and advertising materials must be truthful, decent, and non-deceptive, ensuring they are appropriate for minors if the target audience includes them. Content should never exploit sexual behavior, promote superstition, or discriminate based on sex. It should also avoid misleading or exaggerating claims. Influencers who endorse brands and products must ensure that endorsements they give are accurate and transparent, providing genuine recommendations. It is essential that brands and influencers constantly review their materials to ensure they comply.
- Vetting of Advertisements and Marketing Materials: All marketing and advertising materials, including flyers and jingles intended for digital platforms, must undergo vetting by ARCON before publication. The only exceptions are vacancies, notices, financial statements, goodwill messages, obituaries, and immemorial ads. The Vetting Guidelines issued by ARCON provide the procedure to follow to obtain vetting approval for advertising and marketing materials before exposure to the public.
- Failure to obtain vetting approval prior to exposure of the advertising or marketing materials attracts a fine of up to N1,000,000.00 (One Million Naira) per infraction from ARCON. The ARCON Act also makes failure to obtain vetting approval prior to exposure a crime punishable by both fine and imprisonment upon conviction.
- Disclosure of Paid Partnerships: Influencers must clearly disclose any paid partnerships to maintain transparency and prevent misleading their audience by presenting paid promotions as organic content.
2. Consumer Protection
The Federal Competition and Consumer Protection Commission Act (FCCPCA) empowers the Federal Competition and Consumer Protection Commission (FCCPC) to maintain and protect consumer rights in Nigeria. Brands and influencers must avoid engaging in unfair or deceptive marketing practices that could harm consumers. Key things to look out for here include:
- False Advertising & Consumer Rights: Both influencers and advertisers must avoid practices that mislead or deceive consumers. False or exaggerated claims about products or services can lead to consumer complaints and regulatory sanctions from the Federal Competition and Consumer Protection Commission (FCCPC).
- Transparency in Pricing and Products: The FCCPC mandates clear and honest communication about product pricing and quality. Influencers must avoid making misleading claims, such as promising unrealistic results or misrepresenting product effectiveness.
- Brands and influencers who engage in activities that violate these provisions and other consumer rights may be required to pay damages to consumers or face fines imposed by the FCCPC. Additionally, engaging in unfair and deceptive practices that infringe upon consumer rights is considered a criminal offense under the FCCPCA, which may result in fines and potential imprisonment for the brands and influencers involved.
3. Data Privacy and Protection
Personal data is sometimes often processed during the creation and publication of digital ads. Brands and influencers must therefore comply with the Nigeria Data Protection Act (NDPA) and other data protection laws and regulations when collecting, processing, and using consumer data. Key points include:
- Data Collection and Consent: Businesses and influencers must obtain explicit consent before collecting or processing personal data of individuals, including using cookies or tracking data to target ads. Non-compliance with the NDPA may result in severe penalties.
- Data Sharing and Security: Influencers and brands must ensure consumer data is securely stored and not shared without consent. If data is shared, there must be adequate protection provided for such data.
4. Intellectual Property
Influencers and businesses must be cautious about intellectual property laws when creating or sharing content. The Copyright Act in Nigeria governs the protection of original works, including photographs, videos, written content, and logos.
- Use of Copyrighted Content: Influencers often share content provided by brands. Both brands and influencers must ensure that the content shared does not violate copyright laws. Proper licenses or permissions should be obtained for any third-party content used in marketing campaigns.
- Trademarks and Branding: Brands must protect their logos, trademarks, and other intellectual property from unauthorized use through contractual arrangements. Influencers should avoid infringing on trademarks when promoting products.
5. Contractual Agreements and Legal Liabilities
Contracts between brands and influencers are essential for defining the scope of work, compensation, content requirements, timelines, and other terms. Clear written contracts help avoid misunderstandings and protect all parties involved. These contracts should include the following key provisions:
- Terms and Conditions: Contracts should specify deliverables, payment schedules, content rights, and usage restrictions.
- Breach of Contract: Both influencers and brands should be aware of their contractual obligations. Breaches may lead to legal disputes and claims for damages. Brands should include clauses that protect them against potential non-performance by influencers.
6. Social Media Platforms and Terms of Service
Influencers and advertisers must adhere to the terms of service of platforms like Instagram, Facebook, X (formerly Twitter), and TikTok. These platforms have specific rules regarding advertising, promotions, and sponsored content.
- Platform Rules on Sponsored Content: Most platforms require influencers to disclose when content is sponsored or when they are paid to promote a product. Influencers must comply with these rules to avoid sanctions such as account suspension or banning.
- Platform Liability: Brands and influencers must understand the platform’s role in digital advertising. While platforms provide the medium, they may not always enforce advertising laws. However, they can remove content that violates policies or legal standards.
Conclusion
As influencer marketing and digital advertising continue to grow in Nigeria, understanding the legal landscape is crucial for businesses, influencers, and marketers. Adhering to advertising, consumer protection, data privacy, and intellectual property laws can mitigate legal risks and ensure that marketing campaigns are conducted ethically and transparently. The foregoing is, however, not exhaustive, and we advise seeking legal counsel to effectively navigate legal aspects of influencer marketing and digital advertising.
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Read the original publication at Pavestones
