New influencer disclosure crackdown as UK regulator investigates the extent to which influencers are clearly and accurately identifying any commercial relationship.
A UK regulator is clamping down on social media influencers who fail to properly declare when they have been paid, or otherwise rewarded, to endorse goods or services.
The Competition and Markets Authority (CMA) - the UK watchdog responsible for consumer protection - announced today that as part of an investigation it had written to a range of social media influencers to gather more information about their posts and the nature of the business agreements they have in place with brands.
Where influencers are paid or rewarded to promote, review or talk about a product in their social media feeds, consumer protection law requires that this must be made clear.
The CMA investigation is considering the extent to which influencers are clearly and accurately identifying any commercial relationships, and whether people are being misled. If the CMA finds practices that break consumer protection law, it can take enforcement action.
The key piece of consumer protection legislation relevant to the CMA’s investigation is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). Amongst other requirements it is a banned practice to use editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable to the consumer.
Bringing influencers to book isn’t straightforward however. Ultimately, only a court can decide whether a particular term or practice infringes the law.
The CMA is working closely with the Advertising Standards Authority (ASA) in this area. The ASA is the UK’s independent regulator of advertising across all media. In March 2018 the ASA issued a call for evidence to find out more about what types of labels help people to understand when the online content they see, hear and interact with is advertising.
Influencer disclosure crackdown
Last month Made in Chelsea star, Louise Thompson, became the latest social media influencer to be reprimanded by the ASA, for failing to disclose that one of her Instagram posts was paid for. A complainant challenged the ASA questioning whether the post by Channel 4 structured-reality regular was obviously identifiable as a marketing communication.
Lack of effective disclosure erodes trust with an audience. The most recent figures from the ASA reveal there were 1,824 complaints about content on social networking sites in 2016, up 193% from 622 in 2012.
Influencers currently use a range of hashtags or disclaimers in post descriptions or titles. Creators also use Instagram’s ‘Paid Partnership’ feature to flag posts as brand sponsored according to a new report by CampaignDeus*, an independent influencer marketing benchmarking and evaluation firm.
There is significant variation both in the usage of different ‘admarkers’ and in their impact post on engagement rates.
The most popular admarker by some distance is #ad, with just over 60% of posts using this. This also has the lowest negative impact on engagement rate.
Instagram’s ‘Paid Partnership’ feature performs the worst reducing engagement rates by over 30% compared to influencers’ non-sponsored content.
Influencer marketing company Buzzoole has published a report that reveals #ad and #sponsored posts on Instagram grew by 44% in the first six months of 2018, compared to that of 2017.According to a Talking Influence article Buzzoole observed stats, including the number of sponsored content created by the ‘creators’, the overall engagement driven by influencer-generated content and the verticals that have invested most in the space to conduct the findings.
US influencer disclosure crackdown by FTC
In March 2017 the Federal Trade Commission - the US regulator responsible for influencer marketing - started its own influencer disclosure crackdown. It sent 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.
21 of those influencers received a follow-up warning letter six months later citing specific social media posts the FTC staff were concerned might not be in compliance with the FTC’s endorsement guides.
Increased transparency, authenticity and compliance
As the influencer marketing discipline matures it enjoys growth spurts and suffers growing pains - just like any other nascent industry. Increased transparency, authenticity and compliance are central themes for the maturation process.
The Influencer Marketing Show held in London on 15th and 16th October features a panel discussion on transparency, authenticity and compliance. The debate will ask whether increased focus in this areas will kill or cure influencer marketing. I have been asked by the Influencer Marketing Show organisers to host this panel discussion. You can read more about the full two-day agenda here.
* I am currently a strategic advisor to CampaignDeus.