Influencer Marketing and the Transparency Challenge

Influencer marketing is on the increase as evidenced by both my Instagram feed and several reports that suggest as much as 40% of traditional marketing budgets in the UK are now being spent on influencers.

In the UK paying an individual to endorse your product on Instagram, or any social site, is essentially advertising, and therefore sits within the CAP code and under the Advertising Standards Authority’s remit. We already advise a significant number of brands and agencies on how to label digital endorsements so they meet CAP code requirements yet many influencers and brands remain unaware that paid-for content must be upfront and clear to consumers.

The same can be said over in the US, where the Federal Trade Commission (FTC) is also trying to stop celebrities and influencers from sneaking brand ads onto their feeds and misleading the public. This spring, in what was declared ‘a landmark bout of activity’ the FTC wrote warning letters to 90 celebs, brands and influencers to remind them that disclosure must be clear and conspicuous. Although the recipients were not initially made public, under the Freedom of Information Act the National Law Journal did obtain a list, which is said, amongst others, to include Heidi Klum, Victoria Beckham, Amber Rose and JLo. On this matter, the FTC is taking no prisoners, and only last week settled its first legal action against two social media influencers for their lack of transparency.

Back on this side of the pond, the ASA has seen an increase in complaints over the lack of disclosure on social media platforms. Millie Mackintosh found herself the subject of an ASA complaint in 2015 where she was paid by J2O for a post on her Instagram feed which not obviously identifiable as an ad. The most high-profile complaint was that against Mondelez in 2014, where 5 YouTubers took the Oreo challenge, but consumers were not made suitably aware that they’d received payment to do so. This case marked a defining moment for the promotional marketing industry; on the hand it highlighted that paying influencers to talk about a brand was on a colossal incline, and on the other provided a wake-up call to the ASA that clearer guidelines to marketers on paid-for content were required.

Despite convincing evidence of the ASA publicly working harder to educate the industry, lack of awareness remains. It will be interesting to see how the issue of transparency evolves both here and in the USA.

If you’d like advice on how to show transparency within a social media or digital post, without losing brand style or integrity, we can help. Email us at help@prizeology.com.

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