Influencer Marketing – How Brands and Influencers Can Stay Compliant

Trust is a key component of influencer marketing success – trust between brand and influencer and trust between influencer and their audience. But with influencer marketing now ruling the online marketing space, its growing influence has drawn increased regulatory scrutiny. As a result, many high profile influencers have been exposed as failing to meet the standards required by the Advertising Standards Authority (ASA), which enforces the CAP Code, and the Competition and Markets Authority (CMA), which oversees consumer protection legislation. The resulting reputational damage is something brands and influencers will want to avoid.

Following ASA’s Influencer Monitoring Report, in March 2021, it launched a dedicated non-disclosure webpage listing the names of influencers who failed to meet transparency requirements. Recently, the ASA stepped up its enforcement efforts by pulling targeted ads featuring six non-compliant influencers, including former Love Islanders who, despite warnings, consistently violated the CAP code.

Brands, too, are increasingly at risk of being criticized. Last year, the ASA warned it would seek action against brands that repeatedly fail to disclose ads, and makeup brand Charlotte Tilbury was censored for reel and Instagram story no conformity of an influencer presenting its products.

General principles

One of the most common pitfalls is misunderstanding what falls within the scope of advertising. The definition of advertising is broad and when a brand gives an influencer a “payment” of any kind (this can be a form of monetary payment, but also includes a free loan or gift of ‘a product or service), all resulting postings promoting the mark be subject to consumer protection law. If the brand also has some form of editorial control over the content, the ASA can apply the CAP code as well. Editorial control is also defined very broadly and can include as little as directing the influencer on when and where to publish their posts.

The intent behind these rules and regulations is the promotion of trust and therefore a general principle is that all advertising should be “obviously identifiable” as advertising. Additionally, marketing content must not falsely claim or imply that the content sponsor is acting as a consumer if they do not. It must also specify any commercial intent of the advertisement. Fortunately, the ASA and CMA have released joint guidelines to help influencers get it right.

Based on these general principles, we highlight a few recommendations:

What can influencers do to ensure they are compliant?

Transparent labeling can help influencers stay compliant – clear and direct disclosure is essential. Recommended labels include: “Ad Feature”, “Ad”, “Ad”, “Ad”, or “Ad Feature”. These labels should be placed prominently in the post, visible without the consumer selecting the “see more” option. Recent rulings suggest that ambiguous or vague labels such as “Supported by”, “Given”, or “Thanks to @[brand]’ will be inappropriate. Abbreviated labels such as “aff” or “sp” should also be avoided.

Influencers should also be careful not to rely on their “bio” or previous posts to assume that their audience is aware of an existing partnership or business relationship. Being transparent with consumers involves disclosing business relationships in every message so that it is relevant so that the nature of the relationship can be understood without reference to any other content. This applies to IGTV and Reels as well as major stream posts.

Recognizing the level of influence they wield, influencers need to be mindful of the duty of care they owe their audience. Those with younger audiences should be especially careful to only market appropriate products and services.

What should brands do?

The question of co-responsibility is central for brands. As the cases of Charlotte Tilbury and Primark show, to name a few, regulators have targeted brands holding them jointly and severally liable for improperly disclosing their products in advertisements. For this reason, brands should actively seek ways to promote best practices.

Brands have an interest in protecting their image and helping influencers comply with disclosure rules. Providing advice tailored to their industry is a good way to ensure that the appropriate standards are met. For brands that operate in industries where advertising is tightly controlled, such as the alcohol and gambling industries, this is especially important.

Naturally, brands will want to include provisions in their agreements with influencers requiring them to comply with applicable law. While this may offer limited recourse against the influencer in the event of a breach, in practice it offers little more and does not prevent the reputational damage that may ensue. Therefore, in addition to these contractual protections, brands should consider adding clear, user-friendly, and personalized guidelines to the agreement to encourage compliance and help their influencers comply.

Work together

As the Department of Digital, Culture, Media and Sports launches a consultation aimed at reviewing the regulatory framework for online advertising, the examination of this space should intensify. Brands and influencers will need to work together to ensure they are equipped to navigate the do’s and don’ts of influencer marketing and are able to develop a bulletproof marketing strategy that will maintain and promote consumer confidence.

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