#Competition and Markets Authority #influencer #guide

The rise of social media fame and fortune continues to reach unprecedented heights. It is not five minutes of fame but five minutes of social media fame that is needed to carve out careers in our celebrity obsessed culture. In a world of likes and followers, numbers are everything. Social media content that endorses brands, products and services is highly lucrative.

#theburn

There has been a lot of media hype about influencer and celebrity advertisements, particularly in the after math of the high profile collapse of Fyre Festival, which became the focus of a Netflix documentary released earlier this year. This was the luxury music festival on an island in the Bahamas which lawyers described as "closer to The Hunger Games than Coachella". Its organiser, Billy McFarland, is now serving a six year prison term in the US for multiple accounts of fraud.

The main driver for ticket sales was social media content and promotions endorsed by high profile celebrities. Kendall Jenner was reportedly paid $250,000 for one Instagram post. Other models, such as Bella Hadid, Emily Rajatkowski and Hailey Baldwin, were featured in a promotional video for the festival, as well as encouraging ticket sales through separate social media posts (tickets cost up to $12,500).

In the UK, the ASA has adversely reported against online influencers and celebrities for their unclear endorsements, including the reality TV stars Louise Thompson and Mille Mackintosh. Offending adverts not only endorse products, but often include a personal opinion about the brand, item or service promoted. Unless properly labelled, social media fans and followers are likely to believe that endorsements represent the view of the influencer or celebrity as a consumer when actually they received something in return.

The Competition and Markets Authority ("CMA") has also launched an investigation into concerns that influencers and celebrities are not properly declaring that they have been paid, or rewarded, to endorse goods and services. In January, 16 celebrities, including Ellie Goulding, Alexa Chung and Rita Ora, provided formal commitments to the CMA to state clearly if they have been paid or received any gifts or products endorsed online. The CMA has also released a guide for social media endorsements which aims to encourage influencers to be transparent and disclose commercial ties.

#theguide

The guide (available here) provides practical guidance for celebrities, influencers and brands (and their management and marketing teams) to comply with the law. This also applies to the broader sector and anyone working in this space. The key point is that commercial relationships need to be disclosed upfront and influencers and brands need to be more transparent. Any view expressed by the influencer or celebrity must be genuine (and their own).

It is not only about disclosing the adverts for what they are and being transparent regarding any commercial relationship but also not misleading consumers, whether that is posting content about a purchased product which was in fact gifted or stating that the product has been used, when it has not.

The main rules that the guide refers to are The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code) and the Consumer Protection from Unfair Trading Regulations 2008. As guidance, the CMA publication is not prescriptive. Brands should however enforce and adopt a consistent policy with influencers, where they are benefitting from the content posted and there is a degree of control over the influencer or celebrity content.

#ad

What adverts does this guidance relate to?

• Paid-for space: banner ads, paid-for search results and sponsored/promoted posts.
• Own advertising: products or events including prize draws.
• Affiliate marketing: content promoting products or services that contain a hyperlink or discount code meaning payment for every 'click through' or sale made that is tracked back to the content.

What counts as payment?

Being gifted products, despite this arguably not having the same level of control over the content as if you are being paid, is encompassed within the same bracket as payment. Other examples are:

• Commercial relationship with the brand, such as being a brand ambassador (past or present).
• Receipt of products, gifts, services, hotels or trips for free.
• Any other benefit, such as being loaned items.

If there is payment for content but it is not part of an affiliate arrangement and the brand does not have any control over what is posted, it is unlikely that the content will count as advertising under the CAP code. This is more akin to sponsorship. Sponsorship is not covered by the CAP Code and the ASA will not pursue complaints about it.

What do I need to do to be clear that ads are ads?

The CAP Code states that ads "must be obviously identifiable as such". Consumers should be able to recognise that it is an ad upfront without having to interact with the ad, such as clicking or scrolling to the bottom of the post. Any label needs to be upfront, prominent and appropriate in terms of what can be seen and considering all mobile devices.

Is the advert obvious?

Do:

• Use labels such as #ad #advert #advertisement
• Position labels at the beginning of the post (title, thumbnail or first image)
• Continue to use appropriate labels every time the product or brand is re-posted

Avoid:

• Using labels such as #spon or #sp to indicate that the advert is sponsored
• Using vague language such as "in association with", "thanks to [brand]" or "@ mentioning the brand";
• Including in a bio or profile page that you sometimes advertise or are affiliated with brands, thinking that this is enough
• Tagging a brand without any additional disclosure

#takehome

The CMA and UK regulators are focusing on influencer advertising and influencers. Brands could be subject to enforcement action if they do not comply with the law.

Influencers, celebrities, brands and their marketing teams should ensure that any arrangement or policies take this guidance (as well as the CAP Code and consumer regulations, where applicable) into account, including clear rules as to online content. Posts should also be proactively monitored by brands to ensure that social media content is appropriate and compliant.

The CMA and ASA intend to ensure that all advertising is "legal, decent, honest, truthful". We may well see more stringent rules for magazines, editorials and TV celebrity endorsements in the future. Such a popular topic and conversation will no doubt lead to further investigation and stringent rules that cast a wider net over celebrity and influencer content.