05 December 2019

The influencer marketing trend has made its way to Switzerland. In the past, well-known personalities from sport or culture became brand ambassadors of a company through sponsoring. Today, theoretically anyone with successful self-marketing skills, a smartphone camera and internet access can become an influencer. Influencers recommend offers from their sponsors or advertising partners via social media to their "fans" or "followers" - in return for payment or other considerations. Being an influencer has become an independent career aspiration and business model (see the Swiss Influencer Awards - in German). For brand owners, influencer marketing is an additional instrument to create the desired image of their brand with the relevant target group. In our blog series on "influencer marketing", we highlight core legal topics for influencers and advertisers. In the first article, we explain the requirements for the separation of advertising in influencer marketing in Switzerland.

Separation of advertising applies on social media posts

Influencer marketing is considered "advertising" or commercial communication, as are native advertising, direct marketing, sponsoring, sales promotion and public relations work. Advertising aims at influencing the audiences in their attitude towards certain offers or providers. The main purpose is the conclusion of a legal transaction (or its prevention; cf. principle of the Swiss Commission on Fairness in Advertising "SLK" No. A.3 - in German).

Swiss advertising law prohibits surreptitious advertising, i.e. publications that do not merely address a well-founded public (information) interest, but which are not recognizable as advertising by the public (see Principle of the SLK No. B.15). Regardless of the form and medium in which the commercial communication takes place, it must be unambiguously recognizable and clearly separated from other content (so-called requirement of transparency or separation; Art. 2 of the Federal Act against Unfair Competition, Unfair Competition Act - in German and principle No. B.15 para. 1 of the SLK). This also applies to the presence on a social media platform, in blogs or similar (e.g. the Instagram account of an influencer). In particular, an influencer must disclose the relationship to sponsors or consideration comparable to sponsoring (e.g. remuneration, benefits in kind; principle No. B.15 Para. 2 of the SLK).

In Switzerland, civil proceedings are (theoretically) possible in case of lacking advertising separation. There is, however, no threat of criminal sanctions in case of violations of the general separation requirement. In the field of influencer marketing, there are no specific judgements yet. Decisions by the Swiss Commission on Fairness in Advertising (SLK), the self-regulating body of the advertising industry, are generally much more likely than court judgments. In 2019, the SLK addressed the separation of advertising in influencer marketing for the first time. In its first five decisions on the subject, the SLK emphasizes that the general principle of separation is applicable to this form of advertising on social media. The decisions contain helpful rules of the separation principle for influencer marketing. How to determine whether such advertising requires labelling and how sufficient labelling looks like, is still to be clarified.

Rule no. 1: Posts in a sponsoring relationship qualify as advertising

In the first case, a well-known snowboarder posted a picture on Instagram showing himself at the entrance of the shop of a high-priced sporting goods supplier - his sponsor. He also mentioned "what to wear" with hashtags and the X Games in Aspen, Colorado. The SLK considered it "obvious and undeniable that the post in question was made as part of the paid sponsorship relationship between the respondent and the sporting goods supplier" (Decision SLK No. 153/19 - in German). The SLK did not follow the argument that the post occurred out of "purely personal interests", since the supplier mentioned was one of four sponsors of the influencer. The advertisement, therefore, needed to be marked as such (Decision SLK No. 153/19).

In the second case, a well-known cyclist had shared the post of a credit card issuer (her sponsor) showing two credit cards in her Instagram profile. The text also included the direct link and several hashtags to the offer of the credit card issuer. In contrast to the first case, the sportswoman admitted that she had actually shared the post as part of a long-term sponsoring relationship. This post should also have been labelled as advertising (Decision SLK No. 156/19 - in German).

As a result, a reference by the influencer in an existing sponsoring relationship likely qualifies as advertising. However, this presumption does not define when a particular post needs to be specifically labelled as advertising.

Special case: Product recommendation without consideration is not advertising

A particular case is the differentiation of advertising from independent product recommendations. Praising a self-purchased product among followers, with neither a sponsoring relationship with the provider nor any other consideration in exchange, presumably does not qualify as advertising under Swiss law. Consequently, there is no labelling obligation in this constellation.

A borderline case is the free provision of products in favor of the influencer: If there is an agreement between the supplier and the influencer for the presentation of the product, the influencer post qualifies as advertising (or sponsoring). Even without an agreement, the influencer post can represent advertising for the product in its overall impression.

Special case: Credits are not always advertising

Mentioning of a third party in a post of an influencer to thank for the support may be customary in the corresponding industry (in the style of "credits" e.g. when shooting a music video as in the third decision of SLK No. 155/19 E. 6 - in German). In such case and in the absence of any advertising effect in the overall impression, the contribution does not qualify as advertising (Decision, SLK No. 155/19 E. 6). Where such credits end and the advertising effect begins depends on the overall impression based on all elements of the post but should be concretized by future decisions.

Rule no. 2: Obvious advertising content does not require labelling

Even if a post qualifies as advertising, labelling is only required if the advertising character would otherwise not be apparent to the average audience. In its two most recent decisions, SLK has addressed the issue of "obvious advertising content": A world-renowned tennis athlete published a post on Instagram, which showed him with his sponsor's logo on his headband and jacket as well as a brand watch. For SLK, this post was undoubtedly commercial communication, i.e. advertising.

However, unlike in the first two mentioned cases above, SLK considered the advertising character to be obvious. For the average audience of the target group, it is known and clearly recognizable that athletes present brand logos on posts for commercial reasons. The SLK therefore considered the tennis star's post to be recognizable as advertising, which is why the post did not need to be additionally marked (see Decisions, SLK No. 154/19 and 159/19, E. 12 et seq. - in German, not yet binding).

In the fifth case, SLK also considered the Instagram post of an influencer, showing brand jewelry, to be advertising. Although there was no cooperation with the brands on display, SLK assumed that the influencer would at least use this post to promote her own image or that she would do so with a view to future cooperation. However, since her entire Instagram account was clearly of a commercial nature, SLK did not consider any advertising labelling necessary in this case either (see Decision, SLK No. 157/19 - in German, not yet binding).

Even after these five decisions, it remains difficult to determine, whether a social media post qualifies as recognizable advertising for the audience: While in its first influencer marketing decisions the SLK hardly addressed the criterion of recognizable advertising, despite comparable facts, the last two complaints failed precisely because of this criterion. The fact that the athlete is very well known as well as the special characteristics of athlete sponsoring influenced the outcome in the tennis star's case. Influencers should not assume lightly that the public understands their social media presence as an advertising channel.

Labeling of advertising - but how?

If an ad is not obviously recognizable as such, it must be labelled. In Switzerland, explicit legal rules on the design of advertising separation labels exist only for advertising on linear TV and radio (RTVG). For all other media, there are no specific legal requirements as to how the advertising label should look. No decision – so far – addressed what hashtags (e.g. #ad, #ad, #sponsoredby or #poweredby) satisfy the separation principle. As there are generally very few language requirements in Swiss advertising law, hashtags in a national language (e.g. #Anzeige, #Werbung) and/or English (#ad) must be sufficient (under Swiss practice) for posts on international platforms as long as the public understands them as a term for "advertising". This is not the case with #sponsoredby or #poweredby: These terms will not be sufficient for the SLK to identify the content as "advertising" (and not as mere sponsoring) and are therefore not recommended (cf. on native advertising and the term "sponsorisé" Decision SLK 106/18, E. 3-5 - in French). An influencer is perfectly free to refer to the sponsor or advertising partner in his/her own words in addition to the aforementioned labelling. In light of the most recent decisions, pure thanks such as "Thanks to XYZ!" or "in cooperation with ABC" are, however, hardly suitable to guarantee the clear separation of the advertising and will therefore not suffice as an advertising label.

Whether the advertising markings in the form of hashtags are sufficient also depends on the positioning: Hashtags for advertising separation must not be "hidden" in a long list (so-called hashtag cloud; cf. Decision SLK No. 156/19, E. 5). We recommend placing hashtags like #ad at the beginning of the post, e.g. within the first three to five hashtags. Hashtags should appear in a short view/preview of the post and not only in the full view after clicking on the link "more". This is more difficult to implement on image-focused platforms (such as Instagram). It may be advisable to place the appropriate marking in the (moving) image material itself for advertising messages. If the labeling as advertising is necessary, placing a label in the user profile only will not be sufficient. To rely on the SLK decisions regarding the obvious advertising character, is too risky. Using a specific hashtag uniformly in each relevant post also makes sense due to the internationality of the influencer marketing. In the case of an internationally oriented online presence, foreign law will also be applicable. Stricter rules tend to apply abroad (cf. e.g. Germany, UK), with often more severe sanctions for violations.

Outlook: Influencer decisions and new self-regulation in 2020

Despite the five decisions of 2019, Switzerland lacks practicable criteria for influencer marketing to distinguish between advertising and other content on the one hand and between obvious advertising and advertising that requires labelling on the other. Criticism of these decisions raise demands for comprehensible rules for influencer marketing (cf. the Foundation for Consumer Protection SKS). The SLK appears to be reacting to this and announces to adapt its principles in order to cover the influencer marketing business model as unambiguously as possible: The required separation should not only be necessary between "editorial" information and commercial communication (cf. the current wording in Principle No. B.15). The principle of separation covers "not only traditional editorial media such as radio, TV and newspapers, but also every medium off- and online that produces content", - although according to the view expressed here, this is already covered under the general requirement of transparency and separation in Swiss advertising law.

According to two most recent decisions by SLK, allegedly obvious advertising does not require labelling as advertising (Decisions SLK No. 154/19 and 159/19 and Decision SLK No. 157/19). The SKS has appealed these decisions. The SLK will deal with the appeals in spring 2020.

2020 will definitely bring news on the separation of advertising in influencer marketing in Switzerland – we will keep you posted. Our advertising law team will be happy to advise you on your online campaign - with or without influencer marketing.

Authors: Delia Fehr-Bosshard and Lea Germann

Topics: Media & MarketingInfluencer MarketingAdvertising separation


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