How recent changes in the law will impact influencers and what this means for brands

Brands are increasingly utilising the social media platforms of celebrities, vloggers, and ‘influencers’ to reach their target audiences and boost sales. The problem with influencer marketing though, is that the commercial relationships are not always obvious, making it difficult for consumers to distinguish between editorial content and advertising. In response, the UK’s Competition and Markets Authority (CMA) and Advertising Standards Authority (ASA) have published clear guidance to influencers and brands.

Influencers and the law

The ASA and CMA recently collaborated to launch new guidance on compliance in September 2018, which broadly applies to social media influencers who have received payment for promoting, advertising or displaying products or services. It should also be understood that brands are accountable for the influencers’ content and must ensure that their influencers comply with the law and the guidelines.

The CMA also produced its own, separate guidance in January 2019, explaining that influencers should clearly state when they have been paid, be clear about their relationship with the brand to avoid giving the impression that they are “just a consumer”, and explain how they received the product or services.

Unhappy brands

The key for brands to remember is that paid-for influencer posts and messaging (particularly on social media) need to be appropriately labelled. These transparency requirements have not been universally well-received by brands who claim that they ‘water down’ their advertising messages, nor influencers, some of whom see the disclosure requirements as denigrating their image.

Despite the push from regulators to publish guidance for influencers and advertisers, both groups maintain that the guidance is not sufficiently clear. Additionally, the social media platforms themselves have started to take their own steps to tackle this problem (such as Instagram’s ‘paid partnership’ feature), which has led to increasing confusion for influencers in understanding their obligations.

More regulation is needed

The CMA currently has an open investigation into social media endorsements and, in January 2019, reported that 16 influencers provided undertakings to improve their disclosures when being paid to promote a product. To ensure consistency across platforms, we may see further regulation from the CMA and ASA in the future, as well as more extensive obligations on advertisers to inform their influencers what their responsibilities are.

As the primary party responsible for ensuring compliance with the disclosure requirements, there is increased pressure on advertisers to educate the influencers they work with of their disclosure responsibilities and it is recommended that the specific disclosure requirements be expressly set out in the advertiser’s contract with the influencer. Indeed, this increased pressure on disclosure is not just coming from the regulators, but also the public. High-profile misleading influencer advertising behaviour (such as that revealed in the recent Fyre Festival documentary) have challenged the public’s trust in influencers, and in order to rebuild this trust, appropriate disclosure will be demanded.

The good news

Whilst the regulations and obligations on advertisers may seem like a burden, it can foster a stronger relationship between a brand, its influencers and the public. The hope is that regulation will provide clarity and consistency for brands, ultimately allowing them to identify who are reliable ambassadors for their products and services.

In any case, with influencer marketing being a hot topic for the regulators, platforms and the public, we can expect to see a lot more attention in this space.

Written by Nick Breen, associate at law practice Reed Smith