By John Wilks and Claire Sng

Background

The ASA has this week published new guidance for influencers about how to make their ads clear (see link here “Guidance”). This Guidance follows the ASA’s call for evidence in March 2018.

This is a hot topic at the moment with:

  • The European Commission having just published a report about the behaviour study it conducted on advertising and marketing practices in social media (see link here) (“EC Report”); and
  • The ongoing consumer enforcement investigation that was launched by the Competition and Markets Authority (CMA) over the summer relating to social media endorsements and the labelling of posts by social media influencers.

Tips from the ASA for labelling of ads

The Guidance is easily digestible with a helpful infographic (page 13). Brands who use influencers will want to ensure influencers are obliged to follow the rules in the guidance, and to take measures to ensure that the influencers do so in practice. This is because ultimately not only the influencer but also the brand can be liable for breaches of the CAP Code and related consumer law as a result of things done by the influencer. The main points are as follows:

  • For a post to qualify as an ad it requires two forms of involvement by the brand: (i) some form of “payment” (in the broad sense) and (ii) some “control” over the content. (Where it qualifies as an ad it must comply with the CAP Code, including, in particular, rule 2.1 of the code i.e. it ” must be obviously identifiable as such”.
  • “Payment” includes all forms of commercial relationship or reciprocal arrangement (e.g. being a brand ambassador), payment in kind (e.g. give aways, gifts, trips), as well as the more obvious payment for posting something.
  • “Control” includes the brand having a say over the content of the ad (wording, images, hashtags), the logistics around posting (e.g. dates/number of times), or even just reserving the right to check or approve it – even if the brand ultimately doesn’t do so.
  • “Payment” but no control? The CAP Code is unlikely to apply, although consumer protection legislation still applies.
  • Ways of making an ad clear – it needs to be obvious: upfront (before people engage with the content), prominent, appropriate for the channel and suitable for all potential devices (consider is it clear on mobile too?)
    • The ASA likes: Ad, Advert, Advertising, Advertisement, Ad/Advertising/Advertisement Feature.
    • The ASA “usually recommends staying away from”: #Spon and other forms of the word sponsorship; In association with; Thanks to [brand] for making this possible; and @ + brand.
    • They recommend using a label at the beginning (this could be in the title, thumbnail or on an image depending on the platform)

Legislative requirements

As pointed out in the Guidance, if a post does not involve “control” such that it is not an ad, this does not mean an influencer/brand can relax; quite the opposite. Consumer protection legislation (e.g in particular the Consumer Protection from Unfair Trading Regulations 2008) will still apply where there is “payment”, and breach of these rules can carry criminal sanctions including a fine and/or imprisonment.

The Unfair Trading Regulations prohibit in particular unfair commercial practices (e.g. affecting the economic behaviour of a consumer by encouraging them to buy something because they believe they are reading someone’s personal recommendation when they are being paid to give the opinion), and misleading actions and omissions (e.g. omitting material information such as the commercial nature of a post). In particular, these regulations require influencers to disclose in relation to a product they are posting whether they have received any payment, commission, service, product, loan of a product or other incentive.

Links to earlier guidance of the CMA as noted by the ASA in the Guidance are available hereand here.

What’s next

Whilst the ASA’s new guidance is not new rules or rule changes, this is clearly an area of great importance to the regulators currently, and the guidance helps clarify what kind of labels are sufficient, and which are not.

Just 2 days ago the ASA upheld a complaint against Warpaint Cosmetics (2014) Ltd t/a W7 as a result of a post by an influencer, Olivia Buckland, who included hashtags referencing the brand and whose role as brand ambassador was noted in her Instagram profile and in videos published previously. However, the ASA held that it was an ad because of the agreement between the brand and influencer and as such, without a clear label such as #ad, given that posts could be searched for and read without the context of the profile, the post was not obviously identifiable as a marketing communication in breach of the code. (See decision here)

The key findings of the EC’s report include that one third of participants in the study did not pick up on the commercial nature of native advertising. Further that labels identifying the content did not assist, although more visible labels did assist in Finland. The findings in the report are going to be discussed with national enforcers such as the ASA and CMA, who will decide whether enforcement action is needed.

Certainly, in the UK it will be interesting to see what the CMA concludes in its investigation.

Nevertheless, brands working with influencers, even in an informal way, must make sure that they are complying with the rules, because the brand will be held responsible for the post of an influencer if they get it wrong.