#AD-DRESSED - The Rules of Influence

11 Feb 2019 , 1:50pm

Tahir Basheer and Josh Jaskiewicz of Sheridans look at the recently published Competition & Markets Authority investigation into online brand endorsement by celebrity influencers.

The Investigation

In August 2018 the Competition & Markets Authority (CMA) launched a probe into the practices of celebrities and online stars engaged in brand marketing and advertisement. The investigation focused on 16 of the UK’s top personalities and was published at the end of January 2019 to much media buzz.

Whilst the CMA did not make a finding as to any wrongdoing under the Consumer Protection from Unfair Trading Regulations (CPRs) (which is ultimately a matter for a court of law to determine), it did cooperate with those individuals to secure assurances that they would comply with the CPRs going forward. By targeting the top 16 stars in this space, the CMA has managed to place a spotlight on the CPRs and the rules of disclosure whilst sending a clear message about compliance to the rest of the players in the game.

Lack of guidance

More importantly, the investigation has highlighted that the rules governing influencer marketing continues to be an area that many (brand and influencer alike) have not fully grasped, and not without good reason. The rules, regulations and differing guidelines are patchwork at best and not very accessible to the majority involved.

And while it is incumbent on the player to know the rules of the game there has, until recently, been a distinct lack of consolidated guidance and material issued by those overseeing bodies calling the fouls. In September 2018, recognising that lack of education on this subject was an issue, the Advertising Standards Authority (ASA) and the CMA jointly issued guidelines on the topic. Whilst certainly welcome, some might argue these guidelines are a little late given that platforms like Instagram have been around since 2010 and influencer marketing has been an established multi-million dollar industry for some years now.

So what's the issue?

The ASA and CMA are concerned that influencers are using their power (whilst not clearly disclosing if they receive a commercial gain in return) to impact upon what their followers decide to buy from the brands promoted.

In particular, their concern is that those followers are being misled as to whether the product or service in question is a real and genuine recommendation or if there is a commercial arrangement behind the scenes. The CMA consider that, in the absence of such disclosure, there is a risk that those followers might spend their hard earned money on products that they may not otherwise have bought, had they known the influencer was being paid to promote it.

What are the rules on disclosure?

The CMA are keen to promote transparency in so far that a follower looking at a post becomes immediately aware that there is some form of payment or reward involved. The CMA say that it is only fair that the consumer should know this before they decide whether something is really worth buying.

According to the ASA and the CMA the following categories are all disclosable commercial relationships:

  • Paid for content.
  • Gifted and/or loaned products and services.
  • Events and sponsorships.
  • Previous commercial relationships/ engagements (i.e. brand ambassadors).
  • Affiliate marketing arrangements.

The guidelines published by the ASA and CMA in September 2018 set out that the aforementioned can be disclosed with hashtags like #AD or #AdvertisementPromo and #AdvertisementFeature. In some instances, however, #ADVERTISMENTPROMO may not be suitable for the media format which it is published (for instance in small title spaces or thumbnails) or simply not an appealing tagline that a brand or influencer wants to plaster over carefully curated content.   

To this end, the CMA have not been prescriptive about what is acceptable, only that which is not acceptable, for example, using vague language such as 'brought to you by’ or simply thanking a brand when they receive an unsolicited ‘gift’ in the post. Whilst this is partially helpful, it does not provide the much needed clarity on those greyer areas such as where there hasn't been an exchange of cash but some other non-monetary value instead.   

The future

This is one of those situations where technology and growth of opportunity fast outpace common protocol so it is likely that we will see a lot of influencers rubber stamping all brand collaboration content with #AD or #AdvertisementPromo (or #AdvertisementFeature) as the default option to avoid breaching the rules. In the future, it is possible other social media platforms will release the equivalent of Instagram’s ‘Paid for partnership’ button to assist influencers and brands disclose. Perhaps the next generation ‘Paid for partnership' button will have options so as to disclose the type of relationship more accurately.  In the meantime, while there is much needed improvement and education to be seen in this area before these norms are properly established and adopted, a good rule of thumb is: if in doubt, you should probably disclose it.