Digital marketing update: Shoppable content, unreal and nano influencers, virtual home assistants and ads in messaging apps

In a world of exponential technological growth, consumers make purchasing decisions across an array of media platforms. When developing new methods of delivering a personalised and convenient consumer experience across these platforms, businesses should therefore factor in the risks involved including the application of the Australian Consumer Law (ACL). In this update, we take a look at some of the predicted tech trends for 2019 and flag the associated legal issues you should bear in mind.

Shoppable Content – In the footsteps of the Chinese app WeChat, Instagram is expected to roll out an in-app purchase feature this year, allowing users to select and pay for items without leaving the app. The feature was trialled in 2018, allowing a select few users to make payments in advance for bookings (i.e. at a hairdresser or restaurant), but will likely be extended to purchasing products in 2019. This is a big opportunity for businesses that use Instagram’s current shopping features to streamline their client experience (i.e. tagged items in a post that, when clicked on, will redirect a user to the purchase page of a business’ website). However, businesses that post shoppable content need to ensure that the right products are advertised and tagged, and that the respective picture or description of the product matches the item the customer receives. To avoid misleading or deceptive conduct under the ACL, advertisers should be aware of consumer guarantees whereby goods sold must correspond with their description or demonstration model.

Unreal Influencers – another emerging trend on Instagram has been the rise of “unreal” influencers, such as lil’ Miquela – a fictional CGI character. Lil’ Miquela and similar social media accounts have gained millions of followers and have already partnered with major brands to help promote their products. In addition to their large audience, CGI influencers make attractive business partners as the creators control the content, behaviour, aesthetic, and even life (through fictional narratives) of their influencer so that it is always on brand tailored to their target market. Despite these advantages, authenticity is a vital characteristic of brand influencers and it remains to be seen whether this will hinder the success of more widespread use of CGI influencers. Businesses must also consider whether there is a risk that their CGI influencer may be mistaken for a real person, potentially misleading consumers as to the nature of the sponsored post and the truth of the influencer’s “opinion”.

Nano Influencers – first micro influencers, now nano influencers: social media accounts with as few as 100 followers that have intimate relationships with their audience. Being ordinary people, nano influencers can cut through the noise of Instagram advertising to build greater trust, engagement and empathy with their followers. What nano influencers lack in fame and following, they make up for by being approachable, inexpensive (working for free or in exchange for products or services), and highly influential amongst their network. However, whilst nano influencers present potential for intimate consumer engagement, using less sophisticated influencers carries legal and reputational risks. Accordingly, businesses should ensure that nano influencers are aware of obligations under the Australian National Advertising Association Code of Ethics and the ACL to clearly indicate that their content is sponsored, not improperly use a business’s intellectual property or infringe any third party rights, and comply with social media platform policies. Businesses should also actively monitor content they have sponsored and request corrections if necessary.

Virtual Home Assistants – home assistants are expected to continue their meteoric rise in 2019. The devices, which respond to a set of phrases, assist the user in streaming music, answering questions, dialling calls, and even controlling household lights and electronic appliances. However, with great power comes great responsibility, and virtual home assistants are clouded by potential legal issues. For example, they are capable of recording conversations, leading to data privacy concerns, which have already lead to litigation overseas. Further, consumers often agree to the terms and conditions of product usage without understanding that they are authorising companies to use their search data for personalised advertising. Further, it could be considered misleading or deceptive conduct under the ACL if a virtual home assistant makes no reference to a ‘paid advertisement’ when responding to a question, as consumers are not made aware of the preferential response stemming from a paid advertising partnership or the exclusion of alternate search results.

Ads in Messaging Apps – WhatsApp has recently confirmed that it will be putting ads into its “Status” feature. Additionally, advertisers can now pay to link their Facebook ads directly to the respective business’ live chat in WhatsApp. However, these forms of advertising pose a reputational risk if businesses do not respond to messages in a timely fashion (or at all), or if the advertisement is linked to a Status that contradicts a business’ branding. Businesses should also ensure that they do not engage in conduct such as sending commercial electronic messages to consumers without their permission or consent, as such conduct infringes the Spam Act 2003.

These trends are just the tip of the iceberg – stay tuned for more updates as the year evolves!

This blog was co-authored by Matthew Rozario, Alexandra de Zwart, Jessie Buchan and Melinda Upton.