Influencer advertising continues to undergo scrutiny from watchdogs including the UK's Advertising Standards Authority (ASA). The ASA has implemented new measures to tackle the challenge of inadequately labelled or otherwise irresponsible influencer advertising.
Influencer advertising is no longer a new phenomenon and the rules in this area have remained largely unchanged. However, there is a sense that the regulators are still playing catch up with an industry that consistently flouts the rules.
What are the latest regulatory developments and what's on the horizon?
Advertising in the UK is regulated by a combination of legislation and self-regulatory codes of conduct. For influencer advertising, the most relevant rules are the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (the CAP Code) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CAP Code applies to influencer marketing on non-broadcast media and is enforced by the ASA. The CPRs apply to business-to-consumer marketing communications and prohibit "unfair commercial practices" (including advertising). The Competition and Markets Authority (CMA) or Trading Standards can bring a prosecution for breach of the CPRs.
The CAP Code requires that marketing communications are "obviously identifiable" as such (Rule 2.1). In influencer terms, this means that advertisers must leave consumers in no doubt that what they are engaging with is advertising. As a minimum, the ASA is likely to expect such posts to include a prominent label upfront to highlight that a post is a marketing communication. It has usually held that the clear and prominent use of #AD is the clearest way to communicate the commercial nature of the advertising. More recently, it has accepted that using a platform's own disclosure tools (such as Instagram's Paid Partnership tool) can also help to distinguish advertising from other content.
It is important to remember that making clear that something is an ad isn't the only requirement for ad content. Ads must also (among other things) be socially responsible and not mislead consumers materially or cause serious or widespread offence.
If there is a commercial relationship between an influencer and a brand, then any posts that feature that brand or its products/services should be disclosed using a clear label such as #ad. If influencers fail to make it sufficiently clear when they are being paid to endorse or promote a product or service, they will be in breach of the CAP Code.
Importantly, brands which pay influencers to promote their products and services are also held to be jointly responsible for such breaches, irrespective of any contractual agreement with the influencer and even where an influencer acts outside the contractual brief.
In November 2020, the ASA ruled that a TikTok post on influencer Emily Canham's account featuring a discount code for GHD straighteners failed to make clear to those viewing it that it was an ad. There had been a financial agreement in place between Emily Canham and GHD and under that agreement Emily Canham was contracted to publish posts across her social media accounts. This particular post was not part of that deal, but, because Emily Canham had a commercial relationship with GHD and the post clearly promoted GHD products, the ASA still held that it was an ad and that the commercial nature of the content should have been made clear. The ruling was made against both Emily Canham and GHD.
In January 2020, the ASA ruled that an Instagram post on Molly Mae Hague's account broke the rules for not being obviously identifiable as an ad. Pretty Little Thing (PLT) were also held liable here, even though they had a contract in place which required any advertising services for PLT to be obviously identifiable to the consumer, including that the influencer tagged Instagram posts as a “paid partnership with prettylittlething”. They said that the post was an ‘organic’ feed post and outside the scope of their contractual agreement. However, because Molly Mae had a financial relationship with PLT as their brand ambassador and because the post featured her wearing a PLT product which was also tagged to PLT's Instagram account, the ASA considered that PLT had a level of control over the post that was sufficient for it to fall within the remit of the CAP Code. Both were held liable.
The challenge of inadequately labelled or otherwise irresponsible influencer advertising has been an ongoing issue for the ASA for some years. The first ruling on influencer advertising was published in 2012, against a Wayne Rooney/Nike post.
Most influencer marketing appears alongside independent/editorial content in a very similar style, so it often isn't immediately obvious whether something is or isn't an ad from context alone. The ASA's Ad Labelling research and Ofcom research show the difficulty that consumers have in distinguishing ads from other editorial content.
The ASA has invested significant resources and efforts into helping the influencer marketing industry to understand its responsibilities under the ad rules, particularly those relating to ad disclosure. It has published numerous rulings on ad disclosure, hosted training and produced an array of online guidance, including the Influencers' guide to making clear that ads are ads (published in September 2018 and revised in February 2020) and a cheat sheet designed to help Love Island contestants navigate the rules.
Despite the ASA's work, complaints about influencer advertising remain high. According to the ASA's 2019 Annual Report, complaints about influencer posts made up more than a quarter of all online complaints. 2020 saw a 55% increase on 2019 in complaints received about influencers, from 1,979 to 3,144 individual complaints.
In March 2021, the ASA published a report on influencer ad disclosure on social media which revealed a "disappointing overall rate of compliance with the rules" by influencers on making it sufficiently clear when they were being paid to promote a product or service. It notes that the ASA continues to see "far too many incidences of non-disclosure, which threaten to bring this marketing discipline into disrepute and breed distrust in consumers". The key findings of the report included: inconsistent disclosure across consecutive Stories; inconsistent disclosure across posts and corresponding Stories, IGTV and Reels; poor visibility of ad labels; failure to disclose affiliate marketing and misuse of the labels #affiliate and #aff; and mistaken reliance on bios and past posts to make it clear to consumers that they are connected to a product.
Following the results of this monitoring exercise, the Digital, Culture, Media and Sport Committee has launched an inquiry into the power of online influencers. It will focus on hidden advertising and the frequent lack of transparency around promotion of products and services. The Committee will consider whether regulation is necessary and, if so, what form it should take.
The CMA has also been conducting its own work in this area. In October 2020, it undertook an investigation into hidden advertising on Instagram after concerns were raised that too many social media users were posting content without making clear when they had been paid to do so. The CMA found that Instagram was not doing enough to prevent this, which led to Facebook (now Meta, owner of Instagram) agreeing to implement changes and new tools on the platform to make it easier for all users to comply with consumer protection law when posting content.
In June 2021, the ASA launched a new dedicated page on its website to name and shame influencers who repeatedly break the rules, in escalation of non-disclosure enforcement action. Named influencers will be on the webpage for three months and subject to a period of enhanced monitoring spot checks. If the named influencers continue to break the rules, the ASA has said that it will implement further sanctions, including taking out ads against them, working with social media platforms to have content removed or referring them to statutory bodies for possible fines.
Action will also be taken against brands that repeatedly break the rules. The first influencers to be named were Chloe Ferry, Chloe Khan, Jodie Marsh and Lucy Mecklenburgh. They were all contacted by the ASA's compliance team and asked to provide an assurance that they would include clear and upfront labels in their ad posts. They were named because they either failed to provide that assurance or subsequently reneged on it.
The ASA has since shown that it is prepared to follow through with its threats of tougher sanctions, by using targeted ads to highlight the breaches of six social media influencers to the same audiences they are seeking to influence. Francesca Allen, Jess Gale, Eve Gale, Belle Hassan, Jodie Marsh and Anna Vakili have all previously been named and shamed on the ASA's website for not flagging their ads. Since going on the webpage, they have failed to abide by the advertising rules and improve disclosure.
On 18 January 2022, the ASA announced that it is now taking out ads against these influencers on Instagram, with the aim being to alert consumers (and in particular the influencer followers) to their failure to follow the rules. The ASA says that when it sees the necessary changes to disclosure practices, it will call off the targeted ads but that where non-compliance persists, it will look to more direct forms of enforcement.
This is certainly a step up in the ASA's enforcement action but it remains to be seen whether this will have the wide-ranging effect across the industry that the ASA intends.
The fact that influencers are already ignoring the ASA's naming and shaming campaign suggests it may have limited effect and that for brands and influencers, producing content which looks authentic and real is more important than the adverse publicity they may receive from not following the rules.
Tighter regulatory interventions in this area are likely. The ASA cannot impose financial penalties itself, but it has previously worked with the CMA on enforcement and guidance. Given the CMA has itself taken an active interest in this area, it is certainly possible to see fines being incurred at some point in the future if things do not improve.
The ASA announced in November 2021 that advertising of cryptoassets, cryptocurrencies and NFTs was a 'red alert priority issue' for them.
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