Influencer marketing is common for consumer products businesses. The ability of a business to reach new audiences or embed with targeted consumers via an influencer’s community and following is now well-recognised. However, the ever-growing popularity of this way of advertising has attracted increased scrutiny from the Advertising Standards Authority (“ASA”). A recent update has somewhat shifted the emphasis, and impact, of the ASA’s activities from the influencer to the entity whose products are being advertised.

If influencer marketing is an avenue used to advertise your products, read on for a summary of the key developments and how to protect your business and reputation from falling foul of the rules.

The basics

The ASA is the independent body tasked with upholding the CAP Code. The CAP Code applies to all non-‘broadcast media’ adverts, and is underpinned by legislation including the Consumer Protection from Unfair Trading Regulations 2008 (“CPUTs”). The CAP Code requires that a marketing communication be identifiable as an advert, not falsely claim the marketer is acting as a consumer, and make clear any commercial intent.

Influencer marketing is caught by the CAP Code. And as it continues to grow in popularity as an effective means of advertising consumer products, (especially as consumers spend more time online and on social platforms), the ASA is concerned that a lack of transparency in this form of advertising may “bring this marketing discipline into disrepute and breed distrust in consumers”.

If an influencer fails to adhere to the rules, they will be in breach of the CAP Code. They, and the brand they are advertising for, may also be found to have breached the CPUTs. This has long been the case; hence the rise of clear labelling on social media posts, such as #ad. The rules apply across all features of social media platforms; whether the content is permanent or more temporary.

What’s new

The ASA recently announced that they would publicly name influencers not complying with the advertising rules relating to online adverts. It has launched a dedicated page on its website to highlight individual influencers who, despite being put on notice, have repeatedly failed to follow the CAP Code and disclose adverts on social media platforms.

The named influencers will appear on the webpage for three months and will be subject to enhanced monitoring checks. If the named influencers continue to break the rules, the ASA warns that there are further sanctions that can be implemented including taking out adverts against them, working with social media platforms to have their content removed or referring them to statutory bodies for possible fines.

Impact on the brand

When investigating a complaint, the ASA will typically treat the case as against both the influencer and the brand they are promoting. So, in cases of non-compliance with the CAP Code, brands are already at risk of an adverse ASA decision. Indeed, in the majority of ASA rulings where complaints for breach(es) of the CAP Code are upheld, the ASA notes that brands and influencers are “jointly responsible for ensuring that promotional activity conducted on [an influencer’s] account promoting [the brand in question] was compliant with the CAP Code”.

At this stage, most complaints are resolved by the influencers and brands agreeing to revise the advert in question and ensure future posts comply with the CAP Code. However, with the new sanctions (although these are, in principle, aimed at non-compliant influencers), there is likely to be an unavoidable negative impact on the involved brands. Innocent businesses could have their paid-for content removed due to influencer non-compliance, and also receive negative publicity as a result of their affiliation with a ‘named-and-shamed’ influencer.

More widely, the ASA seems also to be deliberately putting the consumer products businesses which work with influencers more squarely in the frame, having specifically stated: “We will also be looking to take action against brands that repeatedly fail to disclose ads or do not provide assurances that they will properly label ads in future”. This puts the onus on the brand to watch out for hidden advertising and to educate or otherwise encourage their chosen influencers to comply with the CAP Code and CPUTs.

What should businesses be doing?

New technologies being introduced by the major platforms mean brands will be able to detect posts which promote them or their products, so that they can check the posts comply with the CAP Code. Businesses promoted by posts, which are identified or suspected by the platforms to be potentially non-complaint, will also be notified about those posts. All of this hands some power back, but also serves to put more responsivity onto the shoulders of, the advertising business.

A robust stance and proactive approach to influencer policies, engagements, and monitoring is therefore recommended:

  • Update (or implement) your influencer marketing policies, which could include checking the ASA’s ‘naughty’ list of influencers before entering into any commercial relationships which could impact your brand’s reputation.
  • Record your relationship with influencers in contracts, setting out clear and specific guidance on complying with the relevant rules and legislation and covering any non-compliance. If an ASA complaint is made regarding one of your influencer adverts, it can be helpful to be able to point to an agreement requiring the influencer to comply with the rules and legislation. While this may not entirely absolve you of liability, it is helpful to demonstrate to the ASA that you made efforts to ensure the influencer’s compliance with the rules, and may result in less serious action being taken against you by the ASA.
  • Monitor the influencer’s compliance with the contract and the rules when promoting your products and if any breaches are identified, address them immediately.
  • Engage with new technologies being introduced on platforms and understand how they impact on your obligations to promptly monitor and take action against non-compliant marketing activities of your products.
  • Co-operate with the ASA if contacted by them, ensuring you respond promptly and take action to resolve any issues identified. The instances of influencers being named currently relate to instances of repeated non-compliance with the rules; therefore, at this stage being publicly named is avoidable.

Deloitte Legal would be happy to help with any of the above, or to answer any questions you may have on this topic. Please get in touch if you would like to discuss.