Influencer marketing disclosure: an interview with Hashtag Ad founder, Rupa Shah, on keeping brands, marketers and influencers on the right side of regulation.
Lack of effective disclosure erodes trust with an audience. Functional, transparent disclosure will be a key theme in 2018 as influencer marketing seeks to distance itself from its wild west early years.
Yet today 71% of UK consumers wrongly believe influencer marketing isn’t regulated. 61% think there is no obligation on influencers to disclose a material connection with a brand, according to a new survey conducted on behalf of Prizeology, a promotions agency.
How can brands, influencers, and agencies be sure they are doing the right thing when it comes to effectively marketing content where there is a material connection between influencer and brand?
Until recently the only options were to instruct a solicitor or contact the Committees of Advertising Practice (CAP) and the Competition and Markets Authority (CMA) and search through their Codes and guidance yourself.Rupa Shah identified this gap in the market and, after spending 13 years working at the Advertising Standards Authority (ASA), founded Hashtag Ad. A regulatory consultancy that provides training and support to brands, agencies and tech platforms on the advertising rules related to influencer marketing.
At the ASA Rupa was involved in several high profile investigations, wrote guidance on influencer marketing and liaised with brands, agencies and trade bodies to increase awareness of the rules relating to influencer marketing.
During a lengthy Skype call and through email exchanges Rupa explained the finer points of influencer marketing disclosure in the UK, her consultancy firm and where the discipline is headed.
“I set up Hashtag Ad in response to the growing frustration by those in the influencer industry at the ‘wild west’ atmosphere created by a mix of unscrupulous brands and marketers deliberately failing to disclose ads and those that simply didn’t know rules existed or could not figure out how to apply them,” Rupa told me continuing: “my firm protects reputation and helps maintain consumer trust in influencer marketing.”
Influencer marketing disclosure: The ASA & CMA roles
In the UK the role of regulating influencer marketing falls to the ASA and the CMA. Both have issued guidance to influencer marketers. The latest was in March 2017 by the ASA, along with the Committee of Advertising Practice (CAP) who issued fresh guidelines for brands working with influencers, urging both parties to protect consumers before they engage with content that is sponsored.
Both the ASA and the CMA have a responsibility to protect the consumer against misleading influencer content. However, both have different remits, the guidance is subtly different. “The CMA has a broader remit because it is the UK’s primary competition and consumer authority and not limited, as the ASA is, to investigating advertisements only”, explains Rupa.
“Both bodies emphasise the importance of clear and transparent disclosure but the ASA can only take action against ads and ad features, whereas the CMA can use consumer protection legislation to investigate editorial and sponsored content”.
The CMA has warned that media companies who arrange for the publication of content on behalf of businesses also risk breaking the law if it is not clear when content is paid for. They bear a level of responsibility for making sure paid-for endorsements are clearly identifiable.
PR and media agencies share the burden of influencer marketing disclosure
Responsibility for effective influencer marketing disclosure is not only down to influencers and brands. Rupa explains that media agencies are also culpable for influencer work:
“The CMA has warned that media companies who arrange for the publication of content on behalf of businesses also risk breaking the law if it is not clear when content is paid for. That means PR firms, social media agencies, talent management companies and tech platforms also bear a level of responsibility for making sure paid-for endorsements are clearly identifiable.”
The ASA: regulation lead by precedent
Rupa then went on to explain how the ASA codifies regulation and leads best practice. “The rules are written into the CAP Code, which is the UK’s Code of Advertising.” she explained adding “There is no specific section for influencer marketing, but each time the ASA investigates an influencer ad, it creates a precedent that CAP draws upon to create a variety of guidance documents for the industry. The problem, of course, with that approach is that it is reactive not proactive.
Influencers potential to breach more than disclosure rules
In the UK when it comes to disclosure and transparency, the ASA and the CMA are the only regulators. But that doesn’t mean an influencer post couldn’t breach a whole host of other laws/regulations and that would draw-in any number of alternative bodies Rupa explains “if an influencer was actively promoting Botox treatments on behalf of a clinic, the Medicines and Healthcare products Regulatory Agency (MHRA) may take action on the basis that Botox is a prescription-only medicine that should not be advertised to the public”.
From tent-pole campaigns to long-term partnerships
Influence is accretive. It evolves. It strengthens over time. Influence can’t be built on one-time visitors, but over time visitors become ever more engaged with content. More invested in thoughtful brands. I asked Rupa if her clients, too, had identified this trend in fewer, but more meaningful relationships between brand and influencer. “Absolutely. The emphasis has to be on high-quality, long-term strategies. I’ve seen far less resistance to disclosure from those influencers that have authentic followings and from those that collaborate with brands that truly align with their values and perspectives.
The emphasis has to be on high-quality, long-term strategies. I’ve seen far less resistance to disclosure from those influencers that have authentic followings and from those that collaborate with brands that truly align with their values and perspectives.
An end to BANJO influencers
I’ve talked a lot recently about BANJO influencers. BANJO influencer marketing is where those with a large social media following ‘Bang Another iNfluencer Job Out’ in return for quick money without any affinity for the brand that’s sponsoring the content.
it’s good business for influencer marketing to embrace disclosure rules. As consumers we don’t like feeling hoodwinked. To obfuscate a commercial arrangement between brand and influencer does far more harm than good to both parties. We won’t buy from brands if we feel duped. We won’t follow influencers if we feel they haven’t been honest with us. It is the BANJO influencers who are often reticent to declare a material connection with a brand, however because of the half-hearted sponsored content they produce.
Rupa agrees: “There is so much hit-and-run advertising in the influencer sphere that cannot support full disclosure because the brand’s offering just doesn’t sit well with the influencer and a #ad disclosure will lead to a negative reaction. It doesn’t need to be that way and actually I’m starting to see movement away from the metrics of reach and follower-count. Some of the brands I’ve worked with really nurture their talent, involve them in the whole campaign process, encourage inspirational content creation and educate them on the rules of disclosure.”
Remit responsibility alters with long-term brand partnerships
Our conversation moves on to how the regulatory responsibility remit alters with long term brand partnership deals.
As the influencer/brand relationships move from ‘influencer advertising’ - short-lived campaigns where a social media influencer delivers heavily brand-scripted lines to his/her audience towards co-created or purely influencer-created content regulation shifts.
“For influencer marketing to fall under the ASA remit, there needs to be both payment (this includes gifts) and editorial control. If there is payment but no editorial control, the ASA will not investigate the content but yes, potentially the CMA can.
“So, if a brand co-creates content with an influencer this is likely to still be considered editorial control and would be a matter for the ASA, but giving an influencer a truly free-rein to create their own content might move that outside of the ASA’s remit.
There is so much hit-and-run advertising in the influencer sphere that cannot support full disclosure because the brand’s offering just doesn’t sit well with the influencer and a #ad disclosure will lead to a negative reaction. It doesn’t need to be that way.
“It’s important to remember, though, that content can be classed as “controlled” not just where a brand provides a script; it also encompasses, for example, a clause in a contract that states the influencer must not make a negative comment about the product or a requirement that posts must always include a link to the brand’s website. It’s likely, therefore, that the ASA will continue to be the primary regulator of influencer marketing for the foreseeable future.
Brands and tech platforms are biggest influencer marketing disclosure clients
The Hashtag Ad client base is split. It works with brands, as you’d expect. When the ASA publishes a ruling against an ad, the emphasis is usually on the brand (and further sanctions are usually against the brand) so it makes sense that brands turn to Hashtag Ad.
“Brands are keen to minimise negative publicity and maintain their reputations so it’s in their interest to embed good compliance at the earliest stage” explains Rupa. This translates into spending time training their in-house teams.
However a significant part of the client base comes from tech platforms. This makes sense from an industry-growth point of view. "The platforms Hashtag Ad has worked with have been expanding rapidly (and sometimes globally) and it makes sense to tap into deep subject matter knowledge of the UK regulations before setting up or expanding in the UK. Plus with the huge variety of tech packages now on offer to influencers and brands, offering an enhanced level of compliance helps that package stand out from the crowd," said Rupa.
Influencer marketing in 2020
On the future of influencer marketing as a discipline Rupa believes there will be a focus on Artificial Intelligence: “AI will have an increasing role in helping brands identify authentic influencers with genuinely engaged audiences.
"Instagram has added the paid partnership tag for sponsored content other social media platforms will follow suit.
“Both the FTC and the ASA will continue to investigate influencer marketing and brands will have applied pressure on social media platforms to provide simple disclosure options. Similarly, tech platforms and apps will make it easier to disclose paid-for content.
"Because the ASA recently announced it was conducting research into the public’s understanding of ad labelling to make sure their standards are in the right place, 2019 may herald clearer CAP guidance on e.g. disclosure for affiliate links.”
I finished our conversation by asking Rupa how she sees Hashtag Ad evolving. “We will aim to provide a global service so that brands can be confident in their compliance worldwide.
Further information about Hashtag Ad
Hashtag Ad provides guidance and training at all stages of the influencer marketing process. Before campaign launch, that may involve conducting a risk audit on the proposed strategy and providing general training on disclosure and transparency plus detailed training on issues related to the particular product and brand.
While a campaign is live, Hashtag Ad gives regular updates on relevant ASA rulings and updated CAP guidance. Rupa liaises with legal teams to ensure they are notified of the most up-to-date ASA/CMA policy consultations. If the ASA receives a complaint about any aspect of a campaign, Rupa will then call on her insider knowledge to provide strategic support.
You can learn more about Hashtag Ad on its website.