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6th November 2018

New guidance for influencers and brands: when is an ad an ad?

By Alexandra Cooke

With the number of monthly active social media users predicted to exceed 3 billion by 2021, it is no surprise brands are increasingly looking to collaborate with celebrities on social media to promote a product, service or campaign. These celebrities (known as “Influencers”) create content which is, as the name suggests, intended to influence consumers – either in relation to their own brand or on behalf of another brand.

Following a number of adjudications against well-known Influencers, and investigations by the Advertising Standards Authority (ASA) and Competition and Markets Authority (CMA), a new guide (“An Influencer’s Guide to making clear that ads are ads”) has been introduced by the Committee of Advertising Practice (CAP) in conjunction with the ASA and CMA, and was published on 28th September 2018 (the Guide).

The Guide is intended to help both Influencers and brands comply with the legal requirements around Influencer marketing, in particular, the UK Code of Non-broadcast Advertising and Direct Promotional Marketing (CAP Code) and the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).

The Guide looks at a number of different scenarios where the CAP Code and CPRs will apply to Influencers and brands in the context of social media posts, and explains what Influencers and brands must do to avoid misleading people:

Scenario 1: Paid for space

The most obvious scenario where a post will count as an advert, and fall under the rules in the CAP Code, is where a brand pays for content to appear in space which is normally used for ads, for example the ‘sponsored/promoted’ posts on social media platforms.

Scenario 2: Own advertising by the Influencer

Where an Influencer posts about their own products, services or events (even on their own personal channels), this is an ad, and is subject to the rules in the CAP Code.

Scenario 3: Affiliate marketing

This is where an Influencer posts content which  promotes particular products or services, and contains a hyperlink or discount code as part of an ‘affiliate’ agreement. The Influencer will receive commission each time someone clicks through and/or makes a purchase. It is worth noting,only the links and sections of the post which relate to affiliate products count as ads, and must comply with the CAP Code.

Scenario 4: Advertorial content

If an Influencer is working with a brand to create content to post on their own channels, the post will be an ad if:

  1. The Influencer receives ‘payment’. This does not have to be monetary payment; any kind of commercial relationship between the Influencer and brand is sufficient. This includes:
    • Being paid to be a brand ambassador.
    • A loan of a product or service.
    • Receiving freebies, such as products, gifts, trips and hotel stays.
  2. The brand had editorial ‘control’. As a rule of thumb, if the Influencer wasn’t completely free to do and say whatever they wanted, there is likely to have been some form of editorial control. Some examples of a brand ‘controlling’ the content in a post include:
    • Specifying particular words, themes or ‘key messages’ need to be included.
    • Requiring the Influencer to post a specific number of times/on certain dates/at certain times.
    • Reserving the right to check/approve the content before it is posted and/or ask the Influencer to change it (although just the power to require changes or stop the post is enough).

Crucially there has to be both ‘payment’ and ‘control’ for the rules of the CAP Code to apply to the post. Where there has been ‘payment’ but no control, the content is likely to be ‘sponsored’ content rather than an ad. Although the CAP Code won’t apply, the post will still need to comply with the CPRs.

So, what are the rules for ads under the CAP Code?

The CAP Code requires Influencers and brands to make it clear the post is an ad (rather than just editorial or sponsored content). This means any label (or other means) used to highlight the ad must be upfront (before people click/engage) and prominent (so people notice it).

The ASA likes labels that just ‘say it like it is’, for example:

  • “Ad”
  • “Advert”
  • “Advertising”
  • “Advertising Feature”

The ASA is less keen on labels which depend on the wider content and context, and recommends staying away from labels like:

  • “Sponsorship”
  • “In association with”
  • “Thanks to [brand] for making this happen”
  • “Just @ mentioning the Brand”

It is also important:

  • It is sufficiently clear the post is an ad from the post alone (even to people who don’t usually follow the Influencer or brand).
  • The labels used are suitable for all potential devices (including mobiles) and are appropriate for the channel.

The ASA particularly warns against:

  • Hiding the label in a sea of hashtags.
  • Putting the label where it can only been seen by clicking “see more”.

It is the responsibility of both the Influencer and the brand to ensure labels make it sufficiently clear the post is an ad, to avoid complaints to the ASA.

If only certain links and sections of the post count as an ad (see Scenario 3 above), then only the relevant content needs to be highlighted as an ad (although this may be difficult in practice).

Sponsored content

If the ad is not covered by the CAP Code, but “payment” was received (see Scenario 4), the CPRs require for the content to be clearly identifiable as being paid-for. Examples of recommended labels include:

  • “Advertisement feature”.
  • “Advertisement promotion”.

In addition:

  • Commercial relationships must be disclosed upfront.
  • Influencer views must be genuine.
  • Everyone involved must ensure there are robust processes in place to ensure compliance with the relevant requirements.

Are there other things to remember?

The Guidance is a reminder that where brands or Influencers are advertising their own products, or are engaged in affiliate marketing, there are other rules which are likely to apply, particularly if you are:

  1. Making claims about a product (as they will need to be supported).
  2. Advertising age-restricted products, like gambling or alcohol.
  3. Promoting products which have other rules, such as food or supplements; and
  4. Running your own “giveaways” and prize draws.

If you would like further advice or information on any aspect of this article, please contact alexandra.cooke@hamlins.com, who regularly advises brands, entrepreneurs, influencers and well-known individuals on advertising compliance and a variety of commercial matters.

New guidance for influencers and brands: when is an ad an ad?

Have a question? Contact Alexandra

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