Why compliance is the key to professionalising influencer marketing

By Sarah Burns

The Competition and Markets Authority (CMA) recently announced that 16 influencers, some of them among the biggest names in influencer marketing, have agreed to be completely transparent and tell their followers upfront when they have been paid to promote the products they feature in their posts.

Although the CMA didn’t comment on whether the Celebrity 16, which includes Ellie Goulding, Alexa Chung and Rosie Huntington-Whiteley, as well as Zoella, Millie Mackintosh and Binky Felstead, have actually breached consumer law, for those high-profile faces who signed up to this agreement it was certainly a very public commitment to be more honest with consumers, and the announcement sends a strong signal that the authorities are tightening up in this area and that influencer marketing compliance isn’t optional.

There really isn’t any doubt that influencers are not up to speed on compliance. Last year, a survey by CollectivEdge found that influencers disclosed only 38% of brand collaborations to their followers. However, in the same survey there was an interesting close correlation between this figure and the 37% of influencers who said they found the rules around disclosing paid-for promotions confusing.

The public don’t appear to be any better informed either. Last year my own company, Prizeology, commissioned some research into the public’s perceptions of influencer marketing which found that 71% of those interviewed didn’t realise influencer marketing is regulated, and 61% didn’t understand that influencers must disclose when they are paid to promote a product or service.

Of course, the Advertising Standards Authority (ASA) regulates influencer marketing through the CAP Code, but it’s also covered by the Consumer Protection from Unfair Trading Regulations 2008. This key piece of legislation is enforced by the CMA, which does have the power to prosecute, although it doesn’t take this step unless it absolutely has to.

However, it will be interesting to see what the fallout is from recent events in the States, where high-profile influencers such as Kendall Jenner have been subpoenaed in relation to the finances of the ill-fated Fyre Festival, which was heavily promoted on social media.

This general state of confusion and lack of knowledge shouldn’t come as any great surprise, though, because influencer marketing, at least as it manifests itself on social media, is still very much a marketing tool in its infancy. It’s in a near-constant state of development and marketers are still exploring how to leverage its power for the benefit of their brands.

Inevitably, its relative newness also draws controversy and makes it a target for criticism, much of which centres on influencers’ lack of transparency and, in some vocal quarters, accuses the influencer marketing industry of fraud in the form of the difficult to quantify but almost certainly widespread practice of buying followers.

Last year, Unilever’s chief marketing officer, Keith Weed, made it very clear that the company’s brands would never buy followers and wouldn’t work with influencers who did. He also called for improved transparency from the social platforms themselves, because this would enable brands to measure the impact of their not inconsiderable marketing spend more effectively.

The influencer marketing industry is evolving and it’s evolving in a positive direction, but to achieve full transparency all parties, including the platforms, need to take responsibility for the environment in which they operate. If this doesn’t happen, the price could be the loss of a very valuable marketing channel.

In fact, there is already some evidence that the power of influencer marketing could be waning, with research by Bazaarvoice finding that 47% of consumers in the UK, Germany and France are ‘fatigued’ by it. In the same survey, 62% of respondents said they believed influencer content takes advantage of impressionable audiences, so this does feel like the moment to get serious and professionalise the industry.

The cornerstone of this professionalism must be compliance. Brands can obtain help from compliance experts like myself, but there is also a growing body of guidance available. At the same time as it announced the agreements with the 16 celebrities, the CMA published Social Media Endorsements: Being Transparent with Your Followers.

This explains what influencers need to do when they’ve been paid, incentivised or rewarded to promote a product, brand or service on social media and it joins An Influencer’s Guide to Making Clear that Ads Are Ads, which was published by the ASA last September. Both are recommended reading, not just for influencers and their representatives, but for brands, too.

The pressure for transparency is all about consumers being able to make informed choices, but marketers need to ensure they are up to speed on influencer marketing compliance so that they can make informed choices as well. When brands do comply and are transparent, though, Prizeology’s research found that 66% of the public report their perception of that brand improves.

The Celebrity 16 recognise the value of their own brands and must instinctively understand this, and I’m willing to bet that as a result of their newfound willingness to disclose, they will all shoot up in the public’s estimation. This is not something I often advise, but in this case I urge you to take your cue from the likes of Binky and follow the lead of these celebrities.

Sarah Burns is Managing Director of prize promotions agency, Prizeology

Photo by Julián Gentilezza on Unsplash

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