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Who’s influencing you? New Guidance from the CMA and CAP on the use of influencers

Ask Rosie Huntington-Whiteley and she’ll tell you that “Influencers” have been in the advertising regulators’ crosshairs for the last couple of years. Now there is new guidance on the  Advertising Standard Authority’s (ASA) website as to how to keep your advertising “legal, decent, honest and truthful” when engaging your favourite celeb or YouTuber to promote your products.

Why is this guidance important?

This guidance is important because it is the joint effort of the Competition and Markets Authority (CMA) and the Committee of Advertising Practice (CAP). The fact that the CMA is increasingly flexing its muscles in the consumer space should make businesses sit up and take note because its enforcement powers are far more serious than those of the ASA; the body which enforces the CAP’s Codes.

What’s new?

The new guidance pulls together a number of strands of the law.  It is new because of the emphasis it places on the Consumer Protection from Unfair Trading Regulations.  While these CPUT Regulations are now nearly 15 years old, they rarely get the attention they deserve because they are enforced by the cash starved, anaemic Trading Standards Service. So the fact that the CMA has thrown its weight behind them in the context of the “Influencers’ guide to making clear that ads are ads” means that advertisers need to take note.  Given that the usual sanction issued by the ASA is that an offending advert must not appear in its current form again, the CMA’s involvement “ups the ante”.

Why has the guidance been issued?

The guidance has been issued to deal with the generational shift in media consumption.  If you are over 55, you consume most of your media through the traditional platforms of scheduled TV and radio.  If you are 15 to 30, you consume almost everything on demand.  Accordingly, whether your social media platform is as Facebook, Instagram, Snapchat, TikTok, Twitch, YouTube or something else, your adverts are rarely going to be packaged into the neat 30 second slots that wrap around Coronation Street. As a member of Gen Z, the chances are that your ads will be served by an algorithm or an influencer.

So what does it say?

First, the guidance is directed to the influencers rather than the brands and ad agencies.  However, from a reputational perspective, failure to comply with the guidance will only really hurt the products and services of brands promoted by the influencers. So if you use “bloggers”, “streamers”, “celebrities” or “content creators”, you need to read this article as they all fall within the scope of the guidance.

Second, the guidance makes clear that “‘unfair commercial practices’ [are] against the law. These include using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).

The message to influencers is if “you’ve received payment or any other incentive from a brand, or you are otherwise personally or commercially connected to the brand, any related content will need to make clear that it’s advertising.

What is a “commercially connected to the brand”?

The guidance states: “If you have any kind of commercial relationship with a brand, this qualifies as ‘payment’. This includes;

  • being a brand ambassador;
  • being a shareholder;
  • being a director or having a position in the company;
  • you are collaborating on your own ‘edit’ or ‘collection’;
  • you are receiving an exclusive discount or a commission; or
  • you are given products, services, trips, hotel stays, event invites, loans, leases, rentals, or shares etc. for free (whether requested or unsolicited).

It doesn’t matter if there was no obligation to post about free items/services received, it still counts as ‘payment’ and needs to be disclosed.

And this extends to content which “contains or directs people to a link or discount code that means you get paid for ‘clickthrough’s’ or sales, it counts as advertising because it is ‘affiliate marketing’.

What do you need to do to stay on the right side of the law?

You need to make sure that “People should be able to recognise immediately when content is advertising, without having to click or otherwise interact with it. It needs to be clear and obvious, so people shouldn’t need any special knowledge or have to figure it out.

This means using hashtags such as #Ad, #Advertising, etc and the “main thing to remember is that you need to make it obvious from the outset. Any label you use needs to be clear, prominent, upfront, timely, appropriate for the platform and format of the content (e.g., a post, a story, a reel), and suitable for all potential devices (it needs to be clear on mobile and apps too!).

Conclusion

This guidance comes on the back of five years or so of ad hoc enforcement activity by both the ASA and CMA.  However, now that the guidance has been codified expect to see a much more concerted effort to ensure that all influencer advertising is “legal, decent, honest and truthful”.

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