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Influencer Marketing – How Brands and Influencers Can Remain Compliant

Trust is a key component to the success of influencer marketing – trust between the brand and influencer and trust between the influencer and their audience. But with influencer marketing now reigning over the online marketing space, its growing influence has attracted increased regulatory scrutiny. As a result, numerous high-profile influencers have been exposed as falling below 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 law. The resulting reputational damage is something that both brands and influencers will be keen to avoid.

Following ASA’s influencer monitoring report, in March 2021, it launched a dedicated non-disclosure web page listing the names of influencers who fell short of the requirements for transparency. Recently, the ASA has escalated its enforcement efforts taking out targeted ads featuring six non-compliant influencers including former Love Islanders who, in spite of warnings, have consistently breached the CAP Code. 

Brands, too, are increasingly at risk of coming under fire. Last year, the ASA warned that it would be looking to take action against brands that repeatedly fail to disclose ads, and makeup brand Charlotte Tilbury was censured for an influencer’s non-compliant Instagram Reel and Story featuring its products. 

General principles

One of the 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) any resulting posts promoting the brand become subject to consumer protection law. If the brand also has any 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 or where they are to make their posts.

The intention behind these rules and regulations is the promotion of trust and so a general principle is that all advertising needs to be ‘obviously identifiable’ as advertising. Additionally, marketing content must not falsely claim or imply that the promoter of the content is acting as a consumer if they are not. It must also make clear any commercial intent of the advertisement. Helpfully, the ASA and the CMA have issued joint guidance to assist influencers in getting this right. 

With these general principles in mind, we highlight some recommendations:

What can influencers do to ensure they are compliant?

Transparent labeling can help influencers remain compliant – clear and upfront disclosure is essential. Recommended labels include: ‘Advertisement Feature’, ‘Ad’, ‘Advert’, ‘Advertising’ or ‘Ad Feature’. These labels should be placed in a prominent position in the post, viewable without the consumer selecting the ‘see more’ option. Recent rulings suggest that ambiguous or vague labels such as ‘Supported by’, ‘Gifted’, 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 commercial relationship. Being transparent with consumers involves disclosing commercial relationships in each post so that it is relevant so that the nature of the relationship can be understood without reference to any other content. This applies to IGTVs and Reels as well as main feed posts.

Recognising the level of influence they have, influencers should be aware of the duty of care they owe to their audience. Those with younger audiences should be particularly careful that they only market products and services that are appropriate.

What should brands be doing?

The issue of joint responsibility is key to brands. As shown in the cases of Charlotte Tilbury and Primark, to name a few, regulators have targeted brands holding them jointly liable for inadequate ad disclosure of their products. For this reason, brands should actively seek ways to promote good practices.

Brands have an interest in protecting their image and assisting influencers to comply with the rules on disclosure. Providing guidance, tailored to their industry, is a good way of ensuring that appropriate standards are met. For brands that operate in industries where advertising is closely controlled, such as the alcohol and gambling industries, this is particularly important. 

Naturally, brands will want to include provisions in their agreements with influencers requiring them to comply with applicable law. While this may offer some limited recourse against the influencer in the event of a breach, in practice, it offers little more and does not stop the reputational damage that can follow. Consequently, as well as those contractual protections, brands should consider appending clear, user-friendly, and tailored guidance to the agreement to encourage compliance and help their influencers comply.

Working together

With the Department for Digital, Culture, Media, and Sport launching a consultation seeking to review the regulatory framework of online advertising, scrutiny of this space is likely to intensify. Brands and influencers will need to work together to ensure they are equipped to navigate the dos and don’ts of influencer marketing and are able to develop a bulletproof marketing strategy that will maintain and promote the trust of their consumers.