Goodman Derrick’s Paul Herbert talks influencer advertising, including the special care required if children feature in marketing communications.

 

Influencer advertising is an increasingly common component of brands’ marketing strategies. Its inherent effectiveness is that it appears as a more “natural” form of marketing and can allow brands access to new, previously inaccessible audiences.

However, those very qualities can also create problems, particularly around transparency. Brands, therefore, need to be aware of the rules and traps to avoid potential negative impact on their reputation.

Influencer advertising is a form of advertising whereby brands market their products by engaging with an “influencer”. An influencer is a person who has a large following on social media platforms who can exert influence over the buying decisions of their audience. The most common forms include:

• Affiliate marketing – the use of hyperlink/discount codes on the influencer’s social media page. They then receive payment on a per sale or click basis.
• Advertorials – this involves influencers working with a brand to create content for the influencer to post on social media.
• Brand ambassadors – where an influencer receives payment to represent a particular brand.

Influencer marketing is regulated by the Competition and Markets Authority (CMA); the Advertising Standards Authority (ASA); and the Committee of Advertising Practice (CAP), the body responsible for writing the Advertising Codes.

Influencer marketing is governed by the CAP Code and the Consumer Protection from Unfair Trading Regulations (“CPRs”). More recently the CMA and ASA have produced specific guidance – “An Influencer’s Guide to making clear that Ads are Ads”.

The main issue with influencer marketing is that if marketing is not clearly identifiable as such, consumers may be misled into thinking the influencer is giving an impartial opinion as a consumer.

The CAP Code requires:

• That all “marketing communications must be obviously identifiable as such”. The recommendation is to use labels such as “Ad” and “Advert”, which should be prominent and obvious; and
• That “marketing communications must not materially mislead or be likely to do so”. A misleading communication may include hiding material information or exaggerating claims.

The CMA Guidance also requires influencers to make clear if they have received any kind of reward e.g. gifts, money, free services or the loan of a product and any relationship they may have with a brand.

For the CAP Code to apply there needs to be both payment and control by the advertiser. Payment is not limited to money – freebies are also caught, as is being paid as a brand ambassador.

Control can include anything from a brand setting out what a post should contain to having the power to request changes. For example, where a brand pays an influencer to post a picture on Instagram with their product and to use specific hashtags.

Where influencers are receiving money or freebies but the brand has no control over what the influencer produces, the CPRs would still apply. Correspondingly, if you’re not paying an influencer be aware; there may still be an element of control which could stymie the advertisement.

Take special care if children feature in marketing communications. These must not contain anything likely to result in a child’s harm nor exploit a child’s credulity, loyalty or vulnerability.

An example of influencer marketing gone wrong concerned an Instagram post of Louise Thompson (of Made in Chelsea). It included a picture of Louise wearing a Daniel Wellington watch and cuff with the caption: “Sippin’ [sic] on yummy coconuts 3x size of my skull! Wearing my @danielwellington classic petite Melrose 28mm watch and matching cuff… you can get 15% off using the code ‘LOUISE’.”

The ASA held this in breach as it was not clearly identifiable as marketing and notably failed to use the identifier “#ad”.

Tips

• Preparation – ensure any agreement with an influencer clearly identifies their obligations such as the inclusion of identifiers. For example, the hashtag #ad. Also, make clear that the influencer’s content will be an advertisement/sponsored post.
• Stay alert – keep tabs on what your influencers are posting. One wrong post could have a detrimental impact on your brand.
• Be aware – different platforms have different features and requirements. On Instagram, for instance, you can use hashtags and captions to make your followers aware of advertising. On YouTube, the video title and the description bar can be used.

Detractors decry influencer marketing as renting out opinions for cash. However, it does have a place in the marketer’s toolkit as long as the influence element does not eclipse the equally important transparency element.

Paul Herbert is a partner at Goodman Derrick, the London law firm.