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Brands face crackdown on influencer marketing ⚠️

The article from Raconteur discusses the increasing scrutiny and regulation of influencer marketing. Here are the key points:

The global influencer marketing sector is expected to generate $21.1 billion this year, a 22% increase from the previous year. However, as the industry grows, so do controversies and complaints, particularly regarding the lack of clear labelling on commercial content posted by influencers.

In 2021, the Advertising Standards Authority (ASA) found that nearly two-thirds of the 5,700 Instagram Stories it analysed as marketing material were not clearly identifiable as such, a situation it deemed "unacceptable".

The UK Competition and Markets Authority (CMA) has published guidelines for ads and paid promotions by influencers. It expects platforms like TikTok, YouTube, Twitter, Snapchat, Pinterest, and Twitch to provide tools for users to label commercial content and report suspected hidden advertising.

The CMA also expects influencers to clearly disclose when they're receiving a payment for posting content or when they're posting on behalf of a brand they own or are employed by. This includes any form of reward, such as free or discounted goods and services or loans.

Brands are held responsible for ensuring that content resulting from their marketing is labelled as advertising. They must check the posted content themselves for compliance.

The CMA has issued detailed guides for brands, influencers, and social media platforms to help them comply with consumer legislation.

The Committee for Advertising Practice (CAP) code is the main set of rules covering influencer marketing. If influencers or brands ignore a ruling by the ASA, they could face enforcement action by trading standards authorities, potentially leading to a criminal prosecution.

There are specific rules for the use of influencers in certain sectors, such as gambling. For example, gambling firms cannot use top-flight footballers or those with a significant following among under-18s on social media.

The Financial Conduct Authority has seen an increase in the use of social media influencers to promote investment products to younger users.

Despite the progress made by the CMA, some industry professionals are calling for even clearer guidelines, particularly regarding the use of terms like 'ad', 'sponsored', 'PR', and 'gifted'.

The UK government has confirmed that the CMA will be given the power to decide independently whether consumer protection law has been breached and issue fines. The ASA can also "name and shame" brands and influencers who violate the code rules.

raconteur.net