According to the Influencer Marketing Hub an influencer is an individual who has the power to affect purchase decisions of other because of his/her authority, knowledge, position or relationship with his/her audience. For this reason alone, it is clear why influencer marketing is on the rise. I mean, how else can brand owners successfully portray an arguably objective/impartial view of their products or services to millions of people? Brands and influencers alike are utilising this new age form of advertising via social networks. However, where a commercial exchange is made, be it cash or a gift for a post, it is still an advertisement in the eyes of the law and the regulatory bodies are catching up.

Why is there an issue?

It only takes me a couple of swipes on Instagram to find examples of content by influencers clearly advertising a brand but failing to disclose the fact that it is an advert. Such examples have led the Competition Markets Authority (CMA) to investigate whether this form of advertising to consumers is in fact misleading. Under the Consumer Protection from Unfair Trading Regulations 2008, a misleading action occurs when a practice misleads through the information it contains or its deceptive presentation (even if the information is factually correct) and causes, or is likely to cause, the average consumer to take a different transactional decision. Failure to identify the commercial intent (unless this is apparent from the context) of information is covered as a form of misleading practice. As part of its investigation, the CMA has reportedly written to at least 10 celebrities to obtain information on the agreements they have with particular brands.

Well what’s the worst that can happen?

The Advertising Standards Agency (ASA) can launch an investigation off the back of only one consumer complaint about an advert. If the advert is held to be misleading, it will publish the ruling (not great for public perception of the brand/future dealings with that influencer) and request that the advert be removed (not ideal if a hefty part of your budget has been spent on securing that influencer). The CMA on the other hand has the power to fine and imprison those who continuously breach consumer law.

But what if we use #ad or #spon?

The CMA is apparently informing influencers that the existence of a commercial relationship must be immediately clear on viewing the post – this leads us to question whether a #ad or #sponsored buried in a hashtag cluster is in fact enough. According to the CMA’s senior director for consumer protection:

“Social media stars can have a big influence on what their followers do and buy. If people see clothes, cosmetics, a car, or holiday being plugged by someone they admire, they might be swayed into buying it…“So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand”.

It is therefore in the best interests of brands to ensure that they state within their agreements with influencers that the post is in fact an advert, a suggestion to avoid any potential confusion could be to use Instagram’s “paid partnership” tag. The question is, will an arguably “informed” consumer actually be discouraged by use of the tag, or have the tables turned in such a way that consumers will respect the honesty of their favourite star, and appreciate that at the end of the day it is their main source of income? Arguably such “full disclosure” may actually assist in making the influencer appear even more relatable to their followers.

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