29
Directorate-General for Consumers 2018 EUR 6 EN BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING PRACTICES IN ONLINE SOCIAL MEDIA Annex 1.4.1 Stakeholder survey Specific contract No. 2015 85 01 under Framework contract No. Chafea 2015 CP 01 Prepared by the GfK Consortium Final version: June, 2018 Consumers, Health, Agriculture and Food Executive Agency

BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

  • Upload
    others

  • View
    0

  • Download
    0

Embed Size (px)

Citation preview

Page 1: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

Directorate-General for Consumers

2018 EUR 6 EN

BEHAVIOURAL STUDY ON

ADVERTISING AND MARKETING

PRACTICES IN ONLINE SOCIAL MEDIA

Annex 141 Stakeholder survey

Specific contract No 2015 85 01

under Framework contract No Chafea 2015 CP 01

Prepared by the GfK Consortium Final version June 2018

Consumers Health Agriculture and

Food Executive Agency

Directorate-General for Consumers

2018 EUR 2 EN

EUROPEAN COMMISSION

Produced by Consumers Health Agriculture and Food Executive Agency (Chafea) on behalf of

Directorate-General for Justice and Consumers

Unit 03 Economic analysis and evaluation

Contact Unit 03

E-mail JUST-03eceuropaeu

European Commission

B-1049 Brussels

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 3 EN

Behavioural Study on

Advertising and Marketing

Practices in

Online Social Media

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 4 EN

LEGAL NOTICE

This report was produced under the EU Consumer Programme (2014-2020) in the frame of a specific contract with

the Consumers Health Agriculture and Food Executive Agency (Chafea) acting on behalf of the European

Commission

The content of this report represents the views of GfK Belgium and is its sole responsibility it can in no way be taken

to reflect the views of the European Commission andor Chafea or any other body of the European Union

The European Commission andor Chafea do not guarantee the accuracy of the data included in this report nor do

they accept responsibility for any use made by third parties thereof

Project number 20183823

Title Stakeholder survey

Language version FormatVolume Catalogue number ISBN DOI

EN PDF PDFVolume_01 EB-01-18-688-EN-N 978-92-9200-939-7 102818693859

copy European Union 2018

Reproduction is authorised provided the source is acknowledged

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 5 EN

Table of Contents

1 Introduction 6

2 Methodology 6

3 Types of commercial practices and role of industry stakeholders 6

31 Commercial practices 6

32 The role of Intermediaries and B2B clients 7

4 The role of OSM providers 8

41 Approval of content 8

42 Format and functionalities 9

43 Targeting 10

5 New functionalities 10

51 Identified trends 10

52 Potential problems and benefits for consumers 11

6 Misleading practices and remedies 12

61 Types of misleading practices 12

62 Remedies 14

7 Issues and complaints 14

71 Consumers 15

72 B2B clients 15

8 Actions by enforcement authorities 15

9 Conclusions 17

91 Novel commercial practices on social media 17

92 Potentially misleading practices identified by stakeholders 18

93 The role of OSM providers in the approval process formats and functionalities 18

94 Remedies proposed by industry stakeholders 19

10 Appendix 20

101Appendix 1 List of stakeholders interviewed 20

102Appendix 2 Stakeholder survey ndash interview guide 22

103Appendix 3 Briefing on misleading commercial practices 26

104Appendix 4 Analysis ndash Empty grid used for analysis 28

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 2: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

Directorate-General for Consumers

2018 EUR 2 EN

EUROPEAN COMMISSION

Produced by Consumers Health Agriculture and Food Executive Agency (Chafea) on behalf of

Directorate-General for Justice and Consumers

Unit 03 Economic analysis and evaluation

Contact Unit 03

E-mail JUST-03eceuropaeu

European Commission

B-1049 Brussels

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 3 EN

Behavioural Study on

Advertising and Marketing

Practices in

Online Social Media

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 4 EN

LEGAL NOTICE

This report was produced under the EU Consumer Programme (2014-2020) in the frame of a specific contract with

the Consumers Health Agriculture and Food Executive Agency (Chafea) acting on behalf of the European

Commission

The content of this report represents the views of GfK Belgium and is its sole responsibility it can in no way be taken

to reflect the views of the European Commission andor Chafea or any other body of the European Union

The European Commission andor Chafea do not guarantee the accuracy of the data included in this report nor do

they accept responsibility for any use made by third parties thereof

Project number 20183823

Title Stakeholder survey

Language version FormatVolume Catalogue number ISBN DOI

EN PDF PDFVolume_01 EB-01-18-688-EN-N 978-92-9200-939-7 102818693859

copy European Union 2018

Reproduction is authorised provided the source is acknowledged

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 5 EN

Table of Contents

1 Introduction 6

2 Methodology 6

3 Types of commercial practices and role of industry stakeholders 6

31 Commercial practices 6

32 The role of Intermediaries and B2B clients 7

4 The role of OSM providers 8

41 Approval of content 8

42 Format and functionalities 9

43 Targeting 10

5 New functionalities 10

51 Identified trends 10

52 Potential problems and benefits for consumers 11

6 Misleading practices and remedies 12

61 Types of misleading practices 12

62 Remedies 14

7 Issues and complaints 14

71 Consumers 15

72 B2B clients 15

8 Actions by enforcement authorities 15

9 Conclusions 17

91 Novel commercial practices on social media 17

92 Potentially misleading practices identified by stakeholders 18

93 The role of OSM providers in the approval process formats and functionalities 18

94 Remedies proposed by industry stakeholders 19

10 Appendix 20

101Appendix 1 List of stakeholders interviewed 20

102Appendix 2 Stakeholder survey ndash interview guide 22

103Appendix 3 Briefing on misleading commercial practices 26

104Appendix 4 Analysis ndash Empty grid used for analysis 28

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 3: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 3 EN

Behavioural Study on

Advertising and Marketing

Practices in

Online Social Media

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 4 EN

LEGAL NOTICE

This report was produced under the EU Consumer Programme (2014-2020) in the frame of a specific contract with

the Consumers Health Agriculture and Food Executive Agency (Chafea) acting on behalf of the European

Commission

The content of this report represents the views of GfK Belgium and is its sole responsibility it can in no way be taken

to reflect the views of the European Commission andor Chafea or any other body of the European Union

The European Commission andor Chafea do not guarantee the accuracy of the data included in this report nor do

they accept responsibility for any use made by third parties thereof

Project number 20183823

Title Stakeholder survey

Language version FormatVolume Catalogue number ISBN DOI

EN PDF PDFVolume_01 EB-01-18-688-EN-N 978-92-9200-939-7 102818693859

copy European Union 2018

Reproduction is authorised provided the source is acknowledged

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 5 EN

Table of Contents

1 Introduction 6

2 Methodology 6

3 Types of commercial practices and role of industry stakeholders 6

31 Commercial practices 6

32 The role of Intermediaries and B2B clients 7

4 The role of OSM providers 8

41 Approval of content 8

42 Format and functionalities 9

43 Targeting 10

5 New functionalities 10

51 Identified trends 10

52 Potential problems and benefits for consumers 11

6 Misleading practices and remedies 12

61 Types of misleading practices 12

62 Remedies 14

7 Issues and complaints 14

71 Consumers 15

72 B2B clients 15

8 Actions by enforcement authorities 15

9 Conclusions 17

91 Novel commercial practices on social media 17

92 Potentially misleading practices identified by stakeholders 18

93 The role of OSM providers in the approval process formats and functionalities 18

94 Remedies proposed by industry stakeholders 19

10 Appendix 20

101Appendix 1 List of stakeholders interviewed 20

102Appendix 2 Stakeholder survey ndash interview guide 22

103Appendix 3 Briefing on misleading commercial practices 26

104Appendix 4 Analysis ndash Empty grid used for analysis 28

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 4: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 4 EN

LEGAL NOTICE

This report was produced under the EU Consumer Programme (2014-2020) in the frame of a specific contract with

the Consumers Health Agriculture and Food Executive Agency (Chafea) acting on behalf of the European

Commission

The content of this report represents the views of GfK Belgium and is its sole responsibility it can in no way be taken

to reflect the views of the European Commission andor Chafea or any other body of the European Union

The European Commission andor Chafea do not guarantee the accuracy of the data included in this report nor do

they accept responsibility for any use made by third parties thereof

Project number 20183823

Title Stakeholder survey

Language version FormatVolume Catalogue number ISBN DOI

EN PDF PDFVolume_01 EB-01-18-688-EN-N 978-92-9200-939-7 102818693859

copy European Union 2018

Reproduction is authorised provided the source is acknowledged

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 5 EN

Table of Contents

1 Introduction 6

2 Methodology 6

3 Types of commercial practices and role of industry stakeholders 6

31 Commercial practices 6

32 The role of Intermediaries and B2B clients 7

4 The role of OSM providers 8

41 Approval of content 8

42 Format and functionalities 9

43 Targeting 10

5 New functionalities 10

51 Identified trends 10

52 Potential problems and benefits for consumers 11

6 Misleading practices and remedies 12

61 Types of misleading practices 12

62 Remedies 14

7 Issues and complaints 14

71 Consumers 15

72 B2B clients 15

8 Actions by enforcement authorities 15

9 Conclusions 17

91 Novel commercial practices on social media 17

92 Potentially misleading practices identified by stakeholders 18

93 The role of OSM providers in the approval process formats and functionalities 18

94 Remedies proposed by industry stakeholders 19

10 Appendix 20

101Appendix 1 List of stakeholders interviewed 20

102Appendix 2 Stakeholder survey ndash interview guide 22

103Appendix 3 Briefing on misleading commercial practices 26

104Appendix 4 Analysis ndash Empty grid used for analysis 28

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 5: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 5 EN

Table of Contents

1 Introduction 6

2 Methodology 6

3 Types of commercial practices and role of industry stakeholders 6

31 Commercial practices 6

32 The role of Intermediaries and B2B clients 7

4 The role of OSM providers 8

41 Approval of content 8

42 Format and functionalities 9

43 Targeting 10

5 New functionalities 10

51 Identified trends 10

52 Potential problems and benefits for consumers 11

6 Misleading practices and remedies 12

61 Types of misleading practices 12

62 Remedies 14

7 Issues and complaints 14

71 Consumers 15

72 B2B clients 15

8 Actions by enforcement authorities 15

9 Conclusions 17

91 Novel commercial practices on social media 17

92 Potentially misleading practices identified by stakeholders 18

93 The role of OSM providers in the approval process formats and functionalities 18

94 Remedies proposed by industry stakeholders 19

10 Appendix 20

101Appendix 1 List of stakeholders interviewed 20

102Appendix 2 Stakeholder survey ndash interview guide 22

103Appendix 3 Briefing on misleading commercial practices 26

104Appendix 4 Analysis ndash Empty grid used for analysis 28

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 6: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 6 EN

1 Introduction

The following section describes the results of the stakeholder survey with six types of relevant

stakeholders B2B clients (14) local intermediaries (13) global intermediaries (11) consumer

organisations (3) advertisers organisations (8) and academics (4) OSM providers were also

contacted for participation in the survey although only a single OSM provider participated in

the research This interview was discarded as the response from a single respondent did not

allow a separate analysis of the OSM providersrsquo views on the topic

B2B clients are organisations that engage in commercial practices directly through social media

They have a business-to-business relationship with the online social media providers In

contrast the end client can also appeal to intermediaries which act as a third party facilitating

commercial practices through social media In this case the end client does not engage directly

with the social media providers The stakeholders listed in Appendix 1 were interviewed about

their perspective on commercial practices through online social media These views are

summarised below with regard to the following key research topics

- The main topics of the interview concerned

- Commercial practices on OSM

- Novel functionalities and trends

- Potential concerns and benefits for consumers

- Misleading unfair and problematic commercial practices on OSM

- Potential remedies

- The roles of the stakeholders in the approval format and functionalities of marketing

content in OSM

- User issues and complaints

2 Methodology

Stakeholders were approached through GfK contacts in the sector contacts found through desk

research and interactions with consumer and advertiser associations The actors contacted

were invited for an open-ended telephone interview In total 53 interviews were conducted by

researchers dedicated to the project All interviews were recorded for further analysis

An interview guide was used to structure the 30- to 40-minute conversations containing open-

ended questions on the key topics At the start of the interview the respondents received

information on the context of the study Furthermore consent was obtained to report their

company name and to record the interview for analysis After the fieldwork the recordings

were summarised in a specific grid created for data analysis which was based on the key

research dimensions This grid included in Appendix 4 guided the analysis of the interviews

and the subsequent report-writing phase

3 Types of commercial practices and role of industry stakeholders

31 Commercial practices

Companies and organisations can engage in various types of commercial practices through

online social media The stakeholders interviewed differentiate two broad types of activities

posting lsquoorganicallyrsquo and engaging in lsquomarketingrsquo The former encompasses publishing

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 7: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 7 EN

interesting content without paying for it (eg posting stories or news on a companyrsquos own

social media page) the latter includes all types of payed-for commercial practices ndashsee below

Within marketing the type of practices used depends on the stage of the marketing process

The stakeholders first identify the lsquoawarenessrsquo stage (also called branding) in which the aim is

to reach a broad audience and provide them with an impression of a productservice Posting

pictures or video is suited in this phase as well as publishing an advertorial (ie a sponsored

article to be posted on social media) Intermediaries or B2B clients may for instance invest in

Facebook banner ads Sponsored Instagram ads Promoted pins on Pinterest or a skippable

lsquoprerollrsquo video on YouTube The focus in this phase is on reaching a certain number of users in

a certain amount of time and it can be linked to any type of engagement with an offer clicking

on it studying it liking it etcetera

A second phase in advertising concerns the conversion phase (also called performance) The

goal in this phase is to promote a specific productservice and to sell it More precise targeting

is therefore essential in this phase It can be accomplished by targeting on demographics or

interests remarketing (taking into account which productsservices the user researched

outside the OSM platform) targeting based on a list of users (from a company database from

individuals who subscribed to receive updates etcetera) For the actual purchase of the

productservice social media provide the opportunity of linking to a product page or facilitating

shopping through the social media platform (eg advertisers can add a shop section to a

brandrsquos Facebook page)1

In addition to those listed under the aforementioned phases of advertising certain other

commercial practices were discussed in the stakeholder interviews These practices include

paying social influencers for promoting productsservices managing (as an intermediary)

the social media pages and communities of brands and analysing what users are saying

about brands on social media These services are not offered by the OSM providers but by

third parties such as individual social influencers or intermediaries

32 The role of Intermediaries and B2B clients

For organisations that wish to engage in commercial practices on social media the possibilities

and options are plentiful To make the right decisions in terms of targeting content and general

strategy these organisations can turn to intermediaries A B2B client explains that it depends

on the budget and complexity of a campaign whether they set it up on their own or involve an

advertising company If the budget is high and the project is complex ndash in terms of targeting

format content or otherwise ndash an intermediary is more likely to become involved

This indicates the first role of intermediaries which is to provide advice to organisations that

aim to advertise through social media The intermediaries have expertise in both the functions

of social media platforms as well as in marketing strategies Offering this combined expertise

is an added value for their clients For this reason an interviewed B2B client values the

involvement of intermediaries

ldquoThe thing [intermediaries] got ndash and theyrsquore really so important for that ndash they got all

the knowledge about all the Facebook products about what works fine and what

doesnrsquot work fine They give us quite a bit of advice on what we should push on

1 On Facebook advertisers can set up a shop section and include a ldquoMessage to Buyrdquo button allowing consumers to indicate products they are interested in purchasing For the payment of the order users will be redirected to the merchantrsquos website as the option of payment through the Facebook platform is not (yet) available in the EU httpswwwfacebookcombusinesshelp912190892201033

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 8: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 8 EN

Facebook Twitter and YouTube as well So theyrsquove got all the knowledge and quite a

lot of experience with itrdquo

Second local and global intermediaries can have an important role in reaching the right target

groups and optimising the strategy for targeting audiences As the targeting options on social

media are extensive advertisers sometimes hire an intermediary to set up a campaign For

instance one of the interviewed B2B clients hired a marketing agency (as intermediary) to set

up the targeting of specific groups The intermediary in this case helped the client to take the

first steps in advertising through social media

Furthermore a subgroup of intermediaries offers software that facilitates advertising through

online social media or assessing the effectiveness of campaigns For example one of the

intermediaries has created software that assists in buying advertising space on Facebook

creating campaigns setting up target audiences etcetera Their software package can be

considered an efficiency tool which saves time for the end clients and allows them to advertise

on Facebook at a greater scale Other intermediaries create software for acquiring more

detailed metrics on campaigns and advanced statistics on the outcomes For instance an

intermediary offers a tool that shows the performance of an advertisement across multiple

platforms One of the interviewed academic furthermore refers to a software called Ditto that

analyses social media images for visual cues on brands and emotions These examples have in

common that they take advantage of the data available through social media and construct

more advanced metrics than those offered on the OSM platform

Finally intermediaries can take up the creation of content (visuals and texts) for social media

campaigns or they may handle all communication through social media of behalf of their client

(ie social media management) With regard to the control of contents and formats the

intermediaries indicate that their end client has the final word in approving the approach

Nevertheless a local intermediary remarked that their company would not assist costumers

that aim to place misleading ads or performs aggressive targeting

The aforementioned examples show that clients may cooperate with intermediaries in a variety

of cases In other instances however organisations choose to set up their campaigns

themselves For the majority of the interviewed B2B clients his implies using the platform tools

without any personal assistance Only B2B clients that have a large budget to spend on social

media advertising (or that represent highly popular brands) can rely on a direct contact person

(account manager) in the major social media As a B2B client phrases this

Were trying to reach out to [Facebook] to have a personalised relationship so that

we can ask stuff But thats only for top-tier clients that have like five million likes or

something They have an account manage but for us we dont have one yet

At least five B2B clients among the interviewed representatives do have account managers

For these companies the account managers offer a more accessible means of communication

with the OSM providers The companies tend to correspond with them mainly at the start of a

campaign or when a campaign is more complex

4 The role of OSM providers

41 Approval of content

Stakeholders indicate that social media providers have rules about what is accepted and not

accepted in an advertisement Facebook and Twitter for instance explicitly promote these

rules to advertisers For Facebook their policy concerns violence sexuality alcohol and drugs

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 9: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 9 EN

Moreover it also forbids lsquoclickbaitrsquo and images that contain over 20 percent of text Google

(YouTube) is quite strict in terms of regulating nudity in videos and LinkedIn also performs

automated checks on advertisements (eg the platforms restricts the use of capitalised

words) Overall the stakeholders have the impression that the rules on advertising in online

social media are quite strict A local intermediary adds that the rules have become more

restrictive over time in the beginning almost everything could have been posted online

whereas now it is more limited the intermediary reports

In practice when submitting an advertisement on Facebook it is checked through an

automated process Within 10 minutes the advertiser is notified whether the ad was

approved or rejected In case the advertiser disagrees with a rejection he or she can send

feedback after which someone will check the concerned advertisement Despite this automated

check the intermediaries and B2B clients indicate that Facebook cannot possibly check every

aspect of an ad as the volume is very high There is however a second mechanism through

which users can report problematic advertisements after they are published Ads on Facebook

feature reporting buttons and other means for all users to provide feedback A B2B client

explains that Facebook bases the price of a campaign on how successful it is (ie the number

of times it is liked by users) and to what extent it receives negative user reports If

advertisements are unsuccessful or frequently reported by users Facebook will increase the

price for the advertiser or ask the advertiser to make changes to the advertisement (in terms

of content pictures or wording) to increase its attractiveness It is furthermore reported that

negative user feedback can lead to the shutdown of campaigns

42 Format and functionalities

In terms of formats and functionalities social media are constantly innovating and

creating new marketing possibilities These new options are promoted towards

advertisers for instance by providing online trainings about the new features informing

advertisers through sales people or offering price incentives Through these methods for

instance Facebook has promoted video as an advertising format in order to compete with other

platforms most notably YouTube

The social media providers are balancing their need to offer new options and the trust of their

platform users For this purpose there are certain limitations to the formats For instance

when content is sponsored Facebook adds a label to the ad Users can also typically report an

advertisement when they think the format or contents are inappropriate (see also ldquoApproval of

contentrdquo)

In terms of functionality social media providers offer information about which users are

targeted These data are always anonymous as a global intermediary indicates

ldquoWe only get information about masses of people The only reason why we get this

kind of information is to make our message more relevant for peoplerdquo

Even though the provided metrics are very detailed (indicating language age

location ethnicity interests etcetera) they are only visible for segments of 1000 to

2000 users From the perspective of intermediaries and B2B clients this renders the metrics

somewhat unsatisfying A B2B client notes that if metrics were more granular it would be

easier to target the right users making them more satisfied An academic concurs that the

metrics are relatively high-level and suggests that OSM providers could give more information

about the number of individuals actually targeted compared to the desired target size On the

YouTube metrics a local intermediary remarks that they are poorly organised and highlight

mainly the number of ldquoclicksrdquo whereas not all clicks will bring the user to the advertisers

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 10: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 10 EN

website As an experienced user in advertising the intermediary adds one can create custom

reports and custom setting on YouTube resulting in metrics that are more useful

43 Targeting

The intermediaries and B2B clients indicate that the OSM providers have an important role in

providing targeting possibilities They offer the underlying data deliver the targeting options

design the settings and provide statistics The interviewees indicate that they receive

automated suggestions through the online interfaces for entering target groups All

the major social media providers (Facebook Google Twitter) offer this type of advice For

instance when an advertiser selects a keyword for targeting in Twitter the online interface will

suggest related keywords The possibilities are also extensive allowing to select specific target

groups A critique however is that the advertisers cannot verify whether the right profiles are

selected for a certain target group and if the right individuals have been reached In this regard

they have to trust the platform owners

Three types of information are used for targeting profile information (the demographic

and other data that users provide) interest-related data (based on for instance likes and

group membership) and behavioural data (based on what users do ie their location

browsing behaviour etcetera) Facebook is indicated to be most advanced in terms of the

offered targeting options as this platform has most data on its users The targeting can be

based on liked brands or pages watched picturesvideos activity on webpages outside

Facebook device location etcetera Furthermore YouTube is also mentioned as a well-

developed platform for targeting advertisements In addition certain platforms are

preferred to target broad groups of individuals For example Snapchat is well suited to

reach younger people whereas Instagram is more appropriate for targeting women Several

new targeting methods have been developed recently which will be discussed in more detail

in the following section

5 New functionalities

51 Identified trends

Social media offer many new possibilities in terms of commercial practices Firstly targeting

is a prime area for which new functionalities were identified In general the interviewees note

that targeting is becoming increasingly more sophisticated and efficient Two specific features

of Facebook were often named custom audiences and lookalike audiences The former

implies that companies use their client database (eg a CRM database containing e-mail

addresses or phone numbers) to specifically target the individuals in this database The

latter lookalike audiences is a functionality that allows targeting new users who have

similar characteristics as a specified group of individuals Performance metrics on these

targets could possibly be much more detailed down to the level of the individual but Facebook

does not allow metrics on custom audiences of fewer than 1000 individuals2

2 The Facebook Advertiser Help Center mentions this limitation with regard to metrics (Audience

Insights) on custom audiences httpswwwfacebookcombusinesshelp580994405331939

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 11: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 11 EN

Other novel types of targeting that were mentioned include remarketing (advertising based on

a usersrsquo visit of websites outside the OSM platform) and the linking of data from different

platforms An example of database linking includes the use of Facebook data to target users

on Instagram or the linking of Facebook and WhatsApp data

Additionally new functionalities in terms of formats were discussed The B2B clients and

intermediaries identified an increase in integration of content and advertising For

example commercial messages are more often being shown inside content space and

advertisement labelling has sometimes become less conspicuous Formats also

increasingly focus on keeping users on the social media platform instead of redirecting

them to other websites An example is the canvas advertisement on Facebook which is

essentially a small web page that users can navigate while staying on the Facebook platform

Furthermore video content is seen as an increasingly important format A global intermediary

confirms that videos are better received by consumers and yield better results compared to

traditional advertisements Finally important new indirect ways of advertising were identified

such as promoting brands through social influencers or having lsquonormalrsquo users promote

brands (eg by offering sponsored lenses (or lsquoframesrsquo) which individuals can apply to their

Snapchat pictures)

New functionalities were also observed with regard to metrics and statistics Firstly

advertisers can increasingly link their online advertisements to purchases A local

intermediary explains that when an item is promoted on multiple OSM platforms the

advertiser can determine from which platform the buyer arrived at the sellerrsquos website Second

new software can generate statistics that go beyond the overviews offered by the social media

platforms This software is provided to advertisers and intermediaries and collects the data

through the APIs of the social media platforms (eg Facebook and Twitter) One of the

interviewed intermediaries creates software that enables advertisers to assess which ads work

best with what audiences Another type of technology referred to by a global intermediary

measures what types of emotions are expressed through comments on commercial messages

Overall the advanced analysis by intermediaries of large amounts of raw data provided by

social media platforms is considered as an important new functionality

52 Potential problems and benefits for consumers

With the extensive options in terms of targeting and data usage privacy was often discussed

as a main concern More specifically critique was expressed on the use of client databases for

targeting on social media A local intermediary remarks that not all individuals in a company

database may have opted-in for targeting through social media Consumers may not be fully

aware that contact information collected ldquoofflinerdquo may be used for commercial

practices on social media As an academic notes this can be potentially worrisome

ldquoWhen I gave my phone number e-mail address or physical address I wouldnrsquot expect

those businesses to be able to track me on Facebook and target me with ads but now

they can That is a troubling new functionalityrdquo

Furthermore the practice of remarketing can be perceived as problematic in some cases A

local intermediary argues that retargeting may not be desirable for all products and users may

not wish their purchases (or purchase intentions) to be displayed on-screen Finally in addition

to being perceived as lsquospookyrsquo or lsquoscaryrsquo sophisticated targeting can be problematic when

different individuals are shown different offers (price discrimination) or when certain individuals

are excluded from offers With regard to the latter a consumer organisation identified a

particular risk in insurance companies that chose to advertise only to low-risk individuals (for

instance by targeting users based on their educational level) In terms of formats

commercial messages that look like regular content have the potential to mislead

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 12: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 12 EN

consumers Two advertisers organisations name this practice as particularly

problematic In their view consumers should not be misled by an ad that looks like editorial

content As one organisation adds it is especially problematic when such an advertisement

reaches young people who may not possess the background knowledge to discern ads from

editorial content Moreover it is problematic when advertisements are integrated into the social

interaction among users It can be perceived as highly intrusive to see an advertisement

between the Snapchat stories of friends or among private messages on Facebook In addition

to the aforementioned downsides certain benefits of more advanced targeting and data usage

were put forward by a broad range of interviewed actors The displayed advertisements are

more interesting and relevant for the social media users Because the content is more relevant

individuals will be less inclined to feel bothered by hem and instead appreciate the commercial

practices For the same reason the targeted messages may add value for consumers rather

than cause annoyance As a global intermediary summarises

ldquoIn a world where we get so many messages its [about] being relevant [in] what you

say being relevant about the type of product for a certain type of peoplerdquo

6 Misleading practices and remedies

61 Types of misleading practices

The interviewed representatives of B2B clients and Intermediaries indicate that they witnessed

only few instances of clearly misleading practices on the large social media They argue that

social media aim to avoid such misleading advertisements as they do not wish to upset users

Since advertising is a crucial element in their business model social media are very careful

about which advertising they show When prompted however the interviewed B2B clients and

Intermediaries were able to provide examples of misleading problematic and unfair commercial

practices Additional information is provided by consumer organisations and academics who

played particular attention to user data collected by social media They also referred to cases

of malware phishing and misleading promotions The types of misleading commercial practices

that are reported can be classified under the following five categories

Disguised marketing

First an often-mentioned problem is the difficulty to recognise advertising on social media

In part the difficulty to identify ads is related to their format For example on Facebook the

difference between sponsored content and user content is very subtle On Twitter as well it is

difficult to know if content is paid for when browsing hashtags A B2B client suggests that social

media purposefully integrate advertising and content

ldquoOn Facebook it is signalled when content is sponsored but it is not very

obvious and this is on purpose because Facebook does not want to show so

clearly that it is an ad

Furthermore commercial practices are sometimes difficult to recognise because the

commercial nature is not disclosed For example the presence of product placement may not

always be clearly labelled or indicated A specific case in this regard are social influencers

Celebrities or individuals who are popular on social media may be paid by brands to mention

or promote their products When they do not disclose being paid this can be misleading

towards consumers The latter problem is mentioned by several intermediaries and an

advertising self-regulatory body The advertisersrsquo organisation indicates that social influencers

are posting sponsored messages on social media but that they are not necessarily following

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 13: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 13 EN

the rules set out by self-regulatory bodies (ICC) and by the European Commission (UCPD) It

is argued that such failures may be due to inexperience and lack of familiarity with the existing

rules rather than a conscious intent not to adhere to them

Misleading marketing content

A second type of problematic commercial practice concerns misleading or incorrect product

or price descriptions This includes advertising with misleading information about the price

of a product (eg claiming something is free when it is not) the qualities of the product or

incorrectly claiming that an offer is limited in time This type of misinformation also includes

social media campaigns that are referring to a promotion which is no longer valid

Intermediaries and B2B clients further mentioned that product endorsements by social media

users may not always be fully genuine as they could be part of a lsquoshare and winrsquo or lsquolike and

winrsquo action

Undesirable or improper user targeting

Undesirable or improper user targeting is a third important problematic commercial practice

Several B2B clients and intermediaries mention that many users are unaware of how they are

being tracked and how this affects the advertisements that they see The fact that advertising

is personalised and targeted at specific groups without the users being fully knowledgeable

about it is perceived as problematic by an interviewed academic For example many social

media users may not be aware of any behavioural tracking that occurs (eg platforms tracking

the usersrsquo activities on their website and on many other websites that users visit) It implies

that users may not have been sufficiently informed to give consent to this type of tracking

Furthermore brands can advertise to users who have never lsquolikedrsquo the brandrsquos page or have

no interest in the brand at all (for instance by inserting advertisements on their Facebook News

Feed) A B2B client explains that this practice can make users angry based on individual

comments on the companyrsquos Facebook posts and private messages received through Facebook

Targeting can also fail when it is based on inaccurate information or wrong assumptions Users

may for instance be targeted with products they have already bought

Processing of private data

Fourthly participants in the stakeholder survey indicate that it is problematic when very

private data is not processed transparently Social media collect many different types of

information about their users including profile data activities on the platform real-world

location et cetera How these data are used however is not entirely clear to users The B2B

clients and consumer organisations expressed concern about what data is stored how safe it

is stored and whom it is shared with A consumer organisation mentioned that online social

media do not limit the storage of data in time ie it is stored indefinitely The same

organisation also points out a problematic example of a mobile phone banking app which sends

information to Facebook without notifying its users With WhatsApp being part of Facebook a

local intermediary finds it increasingly unclear which information shared with others is still

private and which can also be used for commercial purposes

Aggressive or criminal practices

A final type of problematic commercial practices concern cases of aggressive or criminal

practices Although the stakeholders indicated that criminal practices are not widespread on

social media they did refer to scams phishing and other illegal activities One particular

example provided by a global intermediary concerns a fake airline profile on social media

which promised that a user can win euro3000 by sharing a message These profile pages receive

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 14: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 14 EN

a high amount of visitors and can afterwards be sold on the black market Other cases

mentioned in two B2B interviews are about lsquoaggressiversquo advertisements and aggressive phone

calls after entering contact details on social media

62 Remedies

Various remedies are suggested to counter the aforementioned misleading unfair or

problematic practices The stakeholders interviewed see a role for advertisers social media

users platform owners and governments Intermediaries and B2B clients recognise their role

as advertisers to engage in fair commercial practices that are relevant for consumers In

addition these actors also point out the responsibilities of social media users The latter have

the ability to shape their online advertising environment by indicating which advertisements

they like or do not like As a global intermediary summarises it

ldquoId rather see something that I like or might like instead of tampon commercials So

you yourself [as a user] can make that ad environment just better and more personal

So why wouldnrsquot yourdquo

Furthermore users can report the ads that they find problematic through the automated

reporting on social media The interviewed intermediaries and B2B clients strongly encourage

this

Nevertheless social media providers also have a role in this process Certain B2B clients

and intermediary stakeholders indicate that it is unclear how complaints and reports are

handled Social media providers could be more lsquohands-onrsquo in dealing with user complaints and

when approving advertising Even though the platform owners do not have the capacity to

manually check every advertisement the interviewed advertisers stress the importance of

having a human being (in addition to a computer system) estimate which practices are

acceptable and which are not Furthermore a self-regulatory advertising body proposes that

social media immediately take down advertisements when the self-regulatory body has decided

that they are not acceptable

From the interviews with the different types of stakeholders three key steps to be taken by

social media providers emerged (1) simplify their terms and conditions as well as privacy

policy and present these terms to users in a clear and understandable way (2) label advertising

more prominently and ensure that the same wordingformatting is used throughout the entire

platform and (3) offer more options as opt-in features rather than opt-out With regard to the

first aspect a consumer organisation argues that If the terms of services are not available

and not understandable then its impossible to get an actual consent from the consumer

Finally certain participants in the survey identified a role for governments An intermediary

and consumer organisation suggest that governments (eg on a European level) should

monitor commercial practices performed on online social media and track new technologies

that could potentially violate consumer rights In terms of the current commercial practices on

social media the interviewees from different stakeholder categories identified the need for

laws on privacy and data protection to be adapted to the current practices on social

media Finally legislation is requested to ensure that social influencers are required to

disclose when they are being paid for certain messages With regard to the latter a global

intermediary adds the following

ldquoJust like we have to do on TV and say there is product placement in the TV

show you should be obliged to do it on your social mediardquo

7 Issues and complaints

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 15: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 15 EN

71 Consumers

Consumers have different means of complaining about problematic commercial practices on

social media The most common channel to voice complaints is through the social media

platforms themselves On Facebook users may for instance click negative emoticons post

comments or report the advertisement Less commonly private messages can also be sent

to advertisers Depending on the situation either social media providers deal with a complaint

(eg for complaints expressed through the reporting tool) or the advertiser handles it (eg

for complaints communicated through comments or private messages) Consumers almost

never address their complaints to intermediaries because for social media users it is not visible

which intermediaries are behind a campaign Intermediaries may deal with user complaints in

the name of their end clients or they may forward the complaints to their clients Certain

intermediaries are not at all involved in dealing with user complaints for example

intermediaries which offer software for metrics Some actors use a very structured approach

in answering user feedback One of the interviewed B2B clients makes use of a flow chart to

identify which actions to take in case of user positive neutral or negative consumer response

on social media

The interviewed B2B clients intermediaries and consumer organisations primarily identified

user complains concerning the high number of advertisements (lsquospammingrsquo or lsquopolluting their

contentrsquo) the targeting of commercial practices (mistargeting showing irrelevant ads or re-

targeting advertisement) and the difficulty to identify advertising and discern it from other

content With regard to the latter an advertising self-regulating body reports an

increase in the complaints about social influencers who do not clearly identify which

of their activities are sponsored

72 B2B clients

The issues and complaints that advertisers have are related to the social media platforms

Nevertheless the number of complaints is very limited When issues do arise they are

sometimes related to the platform disapproving an advertiserrsquos campaign without a clear

reason the complexity of the options when advertising on social media and the difficulty of

working with the platformrsquos API (Application Programming Interface)

8 Actions by enforcement authorities

Involvement of enforcement authorities was not a common action when dealing with

problematic commercial practices An important explanation for this is that ndash as multiple

stakeholders indicated ndash going to court takes time It is far more likely that a consumer

complaint is resolved by the advertising company or that a self-regulatory body is involved

The German advertising self-regulator pointed out that their process is much faster than a

court procedure However when the regulator lacks resources or when the complaint deals

with criminal activities the issue is taken to the enforcement authorities

When enforcement authorities are involved it usually concerns the most serious complaints

Examples mentioned by the interviewees include cases about criminal activities (Germany)

alcohol advertising (Poland) data collection (Italy) and out-of-stock products (Belgium) In

many of the cases mentioned in the interviews the government was involved by filing a

complaint against certain commercial practices

Whereas investigations against social influencers are not common in Europe the United States

enforce a more extensive legislation on this topic A respondent from a global intermediary was

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 16: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 16 EN

aware of a case in the United States where the legal authorities had fined YouTube influencers

for not disclosing sponsorship

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 17: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 17 EN

9 Conclusions

The stakeholder survey is part of subtask 14 which aimed to investigate marketing practices

on online social media from a traderrsquos point of view The survey consisted of 50 in-depth

interviews of stakeholders belonging to relevant subgroups with different perspectives and

explored the roles and responsibilities of OSM providers and other actors in the commercial

practices on their platforms More specifically the stakeholder survey aimed to acquire

information about which commercial practices can be found on social media and in what way

certain practices may be misleading unfair or problematic for consumers Additionally the

views of the different stakeholders were assessed and compared as well as their role in the

commercial practices

Types of commercial practices on social media

The stakeholders interviewed differentiate two broad types of activities

- Posting lsquoorganicallyrsquo publishing interesting content without paying for it

- Performing lsquomarketingrsquo engaging in payed-for commercial practices

Additional practices emerged during the interviews including paying social influencers for

promoting products or services managing the social media pages or communities of brands

and analysing what is being said about brands on social media These services can be offered

by local or global intermediaries or by individual social influencers

91 Novel commercial practices on social media

Throughout the stakeholder interviews different functionalities and targeting methods on social

media were discussed The four largest OSM platforms covered in the majority of the

interviews offer extensive possibilities for engaging in commercial practices To compete with

other platforms the major social media are also continuously creating new possibilities for

advertisers and traders which they promote through sales persons and tutorials

Among these new functionalities are extensive options for targeting advertisements The main

OSM platforms allow targeting based on information contained in the registered user profile

interest-related data and behavioural data A relatively new feature of targeting is the use of

custom audiences by targeting clients in the companyrsquos database on OSM platforms by

matching contact information Another example is the creation of lookalike audiences which

allows the targeting of new users who have similar characteristics as a specified group of

individuals Additionally it is also possible to target users who have visited a particular website

outside of the OSM platform Hence targeting through OSM platforms can be based on very

specific individual properties and behaviour

Because the targeting options are extensive advertisers sometimes chose to cooperate with

intermediaries Traders value intermediaries because of their expertise in both marketing

strategies and platform functionalities Intermediaries are therefore primarily used when

setting up a campaign that is complex in terms of targeting format or content Furthermore

intermediaries may also handle the creation of content and communication through OSM on

behalf of the client Finally certain intermediaries offer software facilitating social media

advertising and evaluating campaign effectiveness These additional features are made

possible because the intermediaries make use of the platformsrsquo API (application programming

interface) to provide data These additional statistics tap into the need for better metrics The

interviewed advertisers indicated that the statistics provided by the social media platforms are

not always adequate Even though the data are detailed the B2B clients and intermediaries

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 18: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 18 EN

indicate that they are somewhat high-level and not always useful They are also unsure to what

extent the targeted groups are effectively reached using the available metrics

The B2B clients and intermediaries point out the advantages for consumers of more precise

targeting They indicate that the novel features results in more relevant and interesting ads

which are less likely to bother users They also indicated that platform owners impose limits on

the targeting and advertising options (for example the inability to target very small groups of

individuals and the impossibility to see the identity of the targeted users) By limiting these

options the OSM providers aim to maintain the satisfaction and trust of its users ndash a crucial

aspect for the platforms according to B2B clients and Intermediaries Nevertheless the

interviews revealed several downsides and problematic aspects of new formats features and

targeting options

92 Potentially misleading practices identified by stakeholders

An often-mentioned problem is the difficulty to recognise advertising In certain cases the

commercial nature of an ad may be difficult to recognise or is not disclosed For example

commercial messages are more often being shown inside content space and advertisement

labelling has sometimes become less conspicuous As a result in certain cases the commercial

nature of a piece of content may be hard to discern or is not disclosed In particular

stakeholders mentioned indirect ways of advertising such as promoting brands through social

influencers or having lsquonormalrsquo users promote brands

A second problematic commercial practice concerns misleading or incorrect product or

price descriptions Even though consumers may report these instances it is unclear to that

how the platforms handle their complaint Another problematic issue is undesirable or improper

use of targeting especially because users of OSM often are not aware of how and why they

are targeted This issue is pertinent because users of OSM platforms may not be aware of how

and based on what information they are targeted

A related problem is the difficulty for users to grasp the meaning of the terms and

conditions that the OSM platforms specify Because of this users may not be sufficiently

informed about what they consent to or choose For example social media users may not be

aware of all the behavioural tracking that occurs

A fourth issue is that lack of transparency of how data is processed Consumer

organisations point out that the storage of data is not limited in time that users are not aware

of what is being stored who the data is shared with and which data is combined

93 The role of OSM providers in the approval process formats and

functionalities

Social media providers have a role in the approval of content as well as in taking action

based on user reports The stakeholders indicate that OSM providers have rules about what is

accepted and not accepted in an advertisement These rules are enforced during the approval

procedure prior to publishing an advertisement When submitting an advertisement on

Facebook it is checked through an automated process and the advertiser is notified whether

the ad was approved or rejected In addition users can report problematic advertisements

after they have been published When ads are frequently reported by users Facebook will

increase the price for the advertisers or ask the advertisers to make changes to the

advertisement

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 19: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 19 EN

In terms of formats and functionalities the social media providers are balancing their need

to offer new options to traders as well as retaining the trust of their platform users For

instance social media providers offer information to traders about which users are targeted

even though this information is always anonymous

With regard to targeting OSM providers have an important role They offer the underlying

data for targeting deliver the targeting options to traders design the settings and interface

and they provide the statistics The stakeholders indicated that all major social media providers

(Facebook Google Twitter) offer automated targeting suggestions through the online

interfaces for entering target groups The targeting possibilities are extensive and they allow

the selection of very specific target groups

94 Remedies proposed by industry stakeholders

Several remedies are suggested to counter misleading unfair and problematic practices For

instance OSM providers could be more lsquohands-onrsquo in dealing with user complaints

Furthermore certain interviewed advertisers stressed the importance of having a human being

estimate which practices are acceptable and which are not Furthermore social media could

act on the decisions of self-regulatory advertisement organisations and take down

advertisements when they are deemed inacceptable by these organisations Finally

intermediaries as well as academics recognise the need for clear labelling of marketing content

in particular when social influencers are paid for posting on social media

In sum the stakeholder interviews identified three key steps to be taken by social media

providers

1 simplify their terms and conditions as well as privacy policy and present these in a clear

and understandable way

2 label advertising more prominently and ensure that the same wordingformatting is used

throughout the entire platform and

3 offer more features as opt-in options rather than opt-out

Intermediaries and B2B clients also recognise their role to engage in fair commercial practices

that are relevant for consumers For instance an intermediary indicated that the organisation

would steer away from organising any marketing campaign that is clearly misleading In

addition these actors also point out the responsibilities of social media users who can shape

their online advertising environment by indicating which advertisements they like or dislike

Users can further contribute to a better advertising environment by reporting the ads that they

find problematic through the automated reporting tools on social media This is something the

interviewed intermediaries and B2B clients strongly encourage

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 20: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 20 EN

10 Appendix

101 Appendix 1 List of stakeholders interviewed

Stakeholder type (number of

interviews) Organisation(s)

Academic (4)

College of Computer and Information Science

University Twente

Max Planck Institute for Software Systems

Hogeschool Utrecht and Universiteit Twente

Advertisers organisation (8) Internet Advertising Bureau

Reklamombudsmannen

Zentrale zur Bekaumlmpfung unlauteren Wettbewerbs

Zentralverband der deutschen Werbewirtschaft

(ZAW)

Zwiazek Stowarzyszen Rada Reklamy

Advertising Standards Authority for Ireland (ASAI)

Committee of Advertising Practice (CAP)

World Federation of Advertisers

B2B client (14) BNP Paribas

SterckLimburg

Mobile Vikings

Vente-Exclusive

Unibet

Thomas More

Companeo

SD Worx

Tui Fly

Groen

VRT

Luminex

Bloovi

[A Belgian automobile constructor]

Consumer organisation (3) Test-Aankoop

Norwegian Consumer Council

Consumentenbond

Global Intermediary (11) Social Lab

Agorapulse

Smartlyio

Emakina

Arena Media Belgium

The Next Ad

Adaptly

Qwaya and Funnelio

The Social Element

[A global digital advertising agency]

[A global advertisement company]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 21: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 21 EN

Local Intermediary (13)

Punchlinebe

RCA

bakerMEN

We Are Digital

Analyz-it (Dutch)

Bigtrees

Duval Union Consulting

Goalgorilla

PauwR

Bubka

Pebble Media

Social Inc

[A Belgium-based communication office]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 22: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 22 EN

102 Appendix 2 Stakeholder survey ndash interview guide

[Short introduction to the project and its objectives an explanation of the handling

of individual data gathered ndash no data about the respondentrsquos name or function will be

reported when reporting on the gathered data company names will only be

mentioned for OSM providers when permission is granted]

Q1 What is your professional function

Q2 Which online social media (eg Facebook Youtube Linkedin) are you familiar with in

a professional context With lsquofamiliarrsquo we mean lsquohaving at least some knowledge of how they

operate from a commercial perspectiversquo [explain the way OSM is defined within the scope of

the study and mention types of websitesapps that are excluded a list of top OSM providers

will be available in order to guide respondents on what constitutes OSM in the context of the

study encourage respondent to answer for OSM providers for which feedback is generally

more limited regardless of their specific business relationship to hisher organisation]

Q3 In your daily work in what professional context do you interact with the online social

media you indicated that you are familiar with (eg as competitors business partners or

other) [If some sort of special partnership program is mentioned may be interesting to dig

in briefly on the conditions to be met to entermaintain such a partnership andor the

privileges enjoyed through it]

Q4 Please elaborate on how you interact with online social media from a commercial

(marketing) perspective and the frequency with which you interact with them An

interaction can range from direct contact with employees of the company to indirect contact

through online platforms that serve as Intermediaries [encourage respondent to respond per

OSM provider and to exemplify the relationship and activities in question]

Q5 Please list all types of commercial practices on OSM sites or apps that you are familiar

with or have encountered in a professional context include both direct and indirect

marketing methods [clearly define what is meant by commercial practices within the scope

of this study Ask the respondent to exemplify practices if possible ndash make it more concrete

do not focus on specific OSM providers unless some practices are exclusive to them

encourage focus on less obvious more innovative practices that are typical for OSM]

Q6 What are some of the latest trends in developing new functionalities to help OSM

providers leverage user data [eg moving from marketing to direct selling] Whats the

potential of these trends to be beneficial to consumers How about their potential to be

detrimental or problematic for consumers In what ways

Q7 During your professional career have you encountered specific commercial practices that

could be considered misleading unfair or problematic from a consumer perspective Are

some of these practices specific to certain OSM providers Please provide examples or at

least general outlines if possible [Clarify (if necessary) that misleading or unfair commercial

practices may be aggressive (eg extremely insisting corralling) and are in any case likely to

distort consumersrsquo behaviour ndash refer to UCPD briefing for exact descriptionsdefinition]

Q71 For each of the commercial practices you specified as potentially misleading or unfair for

consumers how could this potential be counterbalanced to limit their impact on consumers

[Encourage a discussion of remedies from both from a legislative perspective but also from

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 23: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 23 EN

the perspective of (self-)regulation including examples from the organisation the respondent

works for]

Q8 Please select up to three types of commercial practices from the ones you

indicated that you are familiar with that you consider the most interesting or relevant to

discuss in the context of misleading marketing practices [encourage the choice of up to three

different providers if possible unless the person specialises in working with a certain OSM

provider when recording the answers to the following questions it should be clear which

specific providers the respondent is referring to or whether they are speaking about OSM in

general terms]

The questions that follow will go more in-depth into the business processes that are part of

one of these commercial practices namely [practice] [Select one practice that can be

considered indirect marketing (eg product placements) based on misleading potential

innovativeness and feedback obtained from previous interviews to increase the diversity of

practices discussed]

Q81 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the development and approval of the specific content of the marketing content

show to users Please elaborate based on your knowledge of specific policies and common

practices in this area

Q82 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in the design of the format and specific functionalities of the marketing content

shown to users Please elaborate based on your knowledge of specific policies and common

practices in this area [also try to understand from the respondent whether [OSM provider]

has editorial control censorship practices in particular what specific criteria are used for

rejecting ads encourage himher to provide examples of approvedrejected cases as well as

the specific issues discussions and feedback to advertiser related to such cases]

Q83 For [type of commercial practice] what do you perceive to be the role of the OSM

provider in determining the target group an advertisement is shown to Please elaborate

based on your knowledge of specific policies and common practices regarding user

targeting

Q84 For [type of commercial practice] what are the specific services offered by the OSM

provider to Intermediaries (eg marketing partners advertising agencies) Based on your

knowledge do they differ from those offered to direct B2B clients and if yes how Lastly

how are OSM clients (Intermediaries or B2B) charged for these services (eg subscriptions

one-time payments etc)

Q85 What types of after-sale services related to [type of commercial practice] are you

aware of provided by OSM to business customers Please elaborate based on your knowledge

of the types of metrics referring to the objectives achieved (eg reach number of clicks

etc) What is the level of granularity of this reporting Are you aware of which parties use

these metrics and whether they are used for purposes outside of the specific marketing

campaign they were collected for [if low granularity of results metrics shared with business

clients is justified on the basis of benefits to consumers or of consumer protection try an dig

a bit deeper what is meant by this]

[ask the following 3 questions ndash 86 to 88 only to B2B clients and Intermediaries]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 24: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 24 EN

Q86 Can you briefly describe the steps involved in running a specific marketing campaign

for [type of commercial practice] based on the service that this OSM provider offers It would

be interesting to describe the process from the perspective of [name the

companyorganisation]

Q87 For [name type of commercial practice] what is the specific role that [name the

companyorganisation] plays in designing and running a marketing campaign How much

control over the process do you perceive that your organisation has in this specific role

[when asking this question to representatives of consumer organisations ask it in third name

for both Intermediaries and B2B clients]

Q88 In a general sense how important do you consider the role of Intermediaries to be

compared to direct B2B clients in driving the business for [type of commercial practice] at

[OSM provider] Based on your knowledge and experience how does this compare to other

OSM providers you are familiar with [encourage specific examples]

[end of questions pertaining to the practice outlined in Q8 for all questions that follow place

the focus on practices that represent unfair or misleading marketing when possible]

[Q9 to Q11 should only be asked to representatives of Intermediaries or B2B clients]

Q9 Can you describe and elaborate on specific issues your company has faced with [ldquoI or

OSMrdquo if respondent=B2B ldquoOSM or B2Brdquo if respondent=I] in the past year (or is currently

facing) regarding the control over marketing format content andor targeting for specific

commercial practices More concretely how were these issues tackled and were they

eventually resolved

Q10 Can you describe the most common issues or complaints your company has faced

or received from users or groups of users in the past year (or is currently facing) regarding

the format or content of specific marketing andor targeting practices More concretely how

were these issues tackled (how is your company planning to tackle them) and were they

eventually resolved These can be issues communicated by the OSM provider [or an

Intermediary if respondent=B2B] or issuescomplaints coming directly from users

Q11 Have you faced any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q111 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q112 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

[Q9 to Q12 should only be asked to representatives of consumer organisations]

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 25: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 25 EN

Q9 Can you describe and elaborate on specific issues or complaints your organisation has

been involved in over the past 3 years (or is currently involved in) regarding the control

over marketing format content andor targeting for specific commercial practices These can

be issuescomplaints communicated by the OSM provider an Intermediary a direct B2B

client or issuescomplaints coming directly from users More concretely how were or are

these issues being handled by all parties involved [mention that this includes OSM providers

Intermediary agencies and B2B clients] and how were they eventually resolved

Q10 Are you aware of any actions by enforcement authorities regarding the format or

content of marketing andor user targeting practices What practices was this action related

to [ask the follow-up questions only if the answer is yes]

Q101 Were any specific judicial andor administrative procedures initiated If possible to

comment further what types of procedures [check if the respondent is open to providing

details on the specific case in order to allow us to find the decisions taken decisions issued

by national authorities are usually quite detailed referring to the original consumer

complaints and providing an analysis of the problems so they could be a useful source of

information]

Q102 What was the result of the action taken Please elaborate if possible especially in

view of how specific responsibilities of different parties involved (B2B clients Intermediaries

etc) were allocated [the answers to the two follow-up questions would provide an indirect

tool to check the extent to which enforcement authorities exercise their powers]

Q11 Which of the misleading commercial practices discussed earlier would you consider most

harmful to consumers What potential remedies would you propose based on your

experience at [name of organisation]

Q12 Have you undertaken specific studies or sweeps in this field (marketingcommercial

practices in Social Media) If they are not (yet) publicly available could you share them with

us

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 26: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 26 EN

103 Appendix 3 Briefing on misleading commercial practices

What are commercial practices

Commercial practices are actions that companies take to promote or sell their products to

consumers This includes presenting their products showing them describing them or

promoting them in any other way It is also considered a commercial practice to give

information about products or to leave out important information Sometimes commercial

practices are taken up by individuals (eg consumers or celebrities) or by other companies

(such as social media) as on behalf of the advertised company The products concerned may

be goods or services

The UCPD covers commercial practices which are unfair misleading or aggressive All

commercial practices on the ldquoBlack listrdquo3 are always considered unfair In addition the following

paragraph describes which commercial practices are also unfair or misleading

Which commercial practices are unfair or misleading

A commercial practice is unfair if these 2 criteria are met

1 The commercial practice is against ldquoprofessional diligencerdquo

This implies that the trader is dishonest not in good faith or that the commercial practice

in some way constitutes a ldquobad market practicerdquo

2 The commercial practice distorts or is likely to distort the economic behaviour

of the average consumer towards the product

It means that a normal consumer is likely to take a transactional decision which they

would not have taken otherwise This transactional decision entails

- Purchasing or not purchasing a product

- Other economic decisions such as entering a shop or website spending time on

a booking process deciding to buy or not to buy another productservice

The transactional decision need not be distorted in practice but the commercial practice

should be likely (capable) to have such an impact on the average consumer An average

consumer is defined as someone who is reasonably critical conscious and circumspect

though it may be used to refer to the average characteristics of the target audience of

the practice or product

3 Please refer to the black listed practices here or to the list on page 3 httpeceuropaeujusticeconsumer-marketingunfair-tradeunfair-practicesis-it-fairblacklistindex_enhtm

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 27: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 27 EN

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 28: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

EUROPEAN COMMISSION

Directorate-General for Consumers

2018 EUR 28 EN

104 Appendix 4 Analysis ndash Empty grid used for analysis

The below grid was used to categorise and summarise the findings of each stakeholder

interview

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)

Page 29: BEHAVIOURAL STUDY ON ADVERTISING AND MARKETING … · paying social influencers for promoting products/services, managing (as an intermediary) the social media pages and communities

Directorate-General for Consumers

2018 EUR 29 EN

HOW TO OBTAIN EU PUBLICATIONS

Free publications

bull one copy

via EU Bookshop (httpbookshopeuropaeu)

bull more than one copy or postersmaps

from the European Unionrsquos representations

(httpeceuropaeurepresent_enhtm)

from the delegations in non-EU countries

(httpeeaseuropaeudelegationsindex_enhtm)

by contacting the Europe Direct service

(httpeuropaeueuropedirectindex_enhtm) or calling 00 800 6 7 8 9 10

11 (freephone number from anywhere in the EU) ()

() The information given is free as are most calls (though some operators phone boxes or hotels may charge

you)

Priced publications

bull via EU Bookshop (httpbookshopeuropaeu)

Priced subscriptions

bull via one of the sales agents of the Publications Office of the European Union

(httppublicationseuropaeuothersagentsindex_enhtm)