What influencers and brands need to know about #sponsored disclosures

Influencer posts that include hashtags like “#ad” or “#sponsored” offer a clear indication that the content is part of a commercial arrangement. But what happens when there is no such disclosure and the line between genuine endorsement and brand advertising becomes blurred?

A recent ruling by the Advertising Regulatory Board (ARB), involving online fashion retailer Superbalist and a social media influencer, illustrates the implications of not disclosing a commercial relationship with brands when posting online.

ARB complaint

In this matter, a complaint was lodged with the ARB against an Instagram post in which an influencer showcased and reviewed products as part of a “Superbalist haul”. However, there was no indication to users that the specific post was part of a commercial relationship. The complainant argued that the post misled consumers into believing it was an independent, personal recommendation, rather than an advertisement for Superbalist and in doing so breached Clauses 3 and 4 of Appendix K of the ARB’s Code of Advertising Practice.

Appendix K of the Code provides detailed rules governing social media and influencer marketing, with the aim of ensuring transparency in social media advertising.

Clause 3 of Appendix K requires that any material connection between an influencer and a brand — such as payments, free products, discounts, or other forms of value — must be clearly and prominently disclosed. This disclosure must appear in a way that is immediately visible and easily understood by the average consumer, typically through unambiguous terms like “#AD”, “#Advertisement” or “#Sponsored”.

Clause 4 further obliges advertisers to clearly disclose when they receive goods or services — whether permanently or on loan — in exchange for media coverage. This applies even if no formal agreement is in place. The purpose is to promote transparency, uphold the integrity of the influencer or publisher and allow consumers to make informed decisions about the content they engage with.

Shared responsibility

This means that both the influencer and the brand share responsibility for compliance. If influencers fail to disclose a material connection and the brand has not exercised adequate oversight, both parties may be found to be in breach of the ARB’s Code. Together, these provisions reinforce the ARB’s objective of preventing deceptive marketing and safeguarding consumer trust in digital content.

Superbalist contended that the inclusion of a promotional code for their website in the influencer’s Instagram bio was sufficient to indicate the existence of a commercial relationship. They argued that, through this reference, users could reasonably infer the association between the influencer and Superbalist. In addition, it was argued that the influencer was not necessarily paid for the post.

Unambiguous disclosure required

The ARB Directorate found in favour of the complainant and held that the absence of clear disclosure constituted a breach of Clauses 3 and 4 of Appendix K. Although there was no direct payment made to the influencer, the provision of free merchandise in exchange for exposure was sufficient to create a material relationship that required disclosure.

Simply put, an advertiser could find ways other than monetary payment to reward influencers for promoting their products and that even alternate ways of payment should be disclosed. This could take any form, including access to special events, discounts when shopping from its stores, or any other means of giving “consideration” for the act of promoting its brand or products.

Importantly, the ARB’s ruling confirmed that the responsibility does not rest solely with the influencer. Advertisers must also ensure that the influencers they engage with understand and comply with the Code’s requirements.

Transparency not optional

This decision serves as a strong reminder to brands and influencers alike: transparency is not optional. The ARB’s Code is designed to protect consumers by ensuring they are not misled into believing paid content is impartial. Even informal arrangements — such as gifting products without explicit contractual obligations — must be disclosed if they result in promotional content being shared.

As influencer marketing continues to shape consumer behaviour and brand engagement, the importance of compliance with the Code cannot be overstated. The above ARB ruling underscores that authenticity in advertising depends not just on the content itself, but on honest disclosure about the context for which it was created.

In a digital landscape where trust is increasingly fragile, transparency remains the most valuable currency.

Issued on Bizcommunity by Sarah Suleman | https://www.bizcommunity.com/article/what-influencers-and-brands-need-to-know-about-sponsored-disclosures-367608a