The market for influencers has expanded significantly in the past five years. It is estimated that the international market will reach €13.8B in 2021. Many companies have used influencers to grow their brands. However, a recent survey by the Advertising Standards Authority Ireland (ASAI) found 51% of surveyed Irish consumers were concerned by the lack of transparency in influencer marketing.
This way of marketing is currently regulated by the Consumer Protection Act 2007 (CPA) and the ASAI code, which is non-binding. The CPA prohibits “misleading, aggressive or unfair commercial practices”. However, there have been relatively few prosecutions under the CPA. This is because it must be proven that the consumer made a transactional decision based on the misleading, aggressive or unfair practices engaged by the business.
The Programme for Government signals an intention to move away from self-regulation. The government has stated an intention to direct the Competition and Consumer Protection Commission (CCPC) to focus on ensuring there “is full disclosure in relation to partnerships, sponsorships and other advertising relationships between media influencers and brands”. The Programme also stated that the “consequences for noncompliance” would be “clearly set out and enforced”.
When using an influencer to promote its products, companies should follow the below dos and don’ts, in order to reduce the risk of being subject to enforcement action. These suggestions incorporate the ASAI Guidance on the Recognisability of Influencer Marketing Communications.
Don’t: Take a simplistic approach to what constitutes a marketing communication
Companies should be transparent about their relationships with influencers. Brands may engage influencers through monetary payments, or they may seek positive reviews in return for providing free products. Both forms of payment would qualify an influencer post as a marketing communication and so require disclosure. A company exercising editorial control over the content of a post will result in the post being a marketing communication. Companies should also be aware that an influencer does not need a particular number of followers for their posts to qualify as a marketing communication. Simply because an influencer has fewer followers does not mean that their posts won’t require a disclosure.
Where a brand sponsors an influencer, rather than just a single post, this creates an ongoing commercial relationship. In these scenarios, companies should be aware that because there is an ongoing commercial relationship, the influencer must tag any other content that references their brand. This includes photographs and videos.
Do: Include clear contractual commitments in your contracts with influencers
Content that is a marketing communication should be clearly disclosed. Disclosures should be prominent enough so that consumers will recognise the post as a marketing communication. Companies should prevent influencers from burying labels in hashtags. For example, the ASAI Guidance notes that “a disclosure below-the-fold on websites, in terms and conditions at the end of a piece of content, or in the ‘see more’ section is not sufficient”. If part of a post is an independent review of a product, while another part is a marketing communication, this should be clearly distinguished for the consumer.
Influencer marketing communication should be identifiable without the consumer needing prior knowledge of that influencer’s commercial relationships. This means it is not enough for the “bio” section to outline commercial relationships as social media posts are often viewed in isolation.
Companies should include clear contractual obligations on the influencer to comply with applicable consumer law and advertising standards.
Do: Pay careful attention to other sector-specific advertising regulations
Alongside special considerations that apply to influencer marketing, companies also need to ensure that their use of influencers is permitted and remains compliant with various sector-specific advertising and marketing requirements, which are provided for in dedicated sections of the ASAI Code as well as in EU and national legislation and associated industry codes and guidelines. This is particularly important in the context of highly regulated products like medicines, medical devices and cosmetics.
Even if the product is not on its face a highly regulated product like a medicine or medical device, care needs to be taken to avoid inadvertently triggering regulatory requirements applicable to them. For example, claims that products prevent, treat or cure diseases or medical conditions could run the risk of triggering the definition of a medicinal product and being treated as such. Likewise, content that creates the impression that a product is intended to be used for one of the specific medical purposes provided for in the definition of a medical device in the Medical Device Regulation (EU) 2017/745 (MDR) could risk a product inadvertently being treated as a medical device for regulatory purposes. It is vitally important that sector-specific regulations are taken into account when determining the boundaries of claims and advertising policies and procedures.
Don’t: Let influencers state opinions as facts
Companies should ensure that their contracts with influencers require accurate descriptions of their products. Failure to do so could result in the commission of the offence of engaging in misleading commercial practices under the CPA. The CCPC has advised that this can include an “advertisement [that] creates a false impression about a product or service, even if the information given is correct”. The ASAI code recommends that opinions on products should be presented as that, rather than matters of fact, and advertisements should not be presented as objective truth “unless the objective truth of the claims can be substantiated”.
Don’t: Treat all platforms and posts in the same manner
Companies should be aware of the various quirks and limitations of different social media platforms. On Twitter for example, the space available to include a disclosure is restricted. On Pinterest the amount of the content actually controlled by the “pinner” is limited. Brands need to be aware of these limitations when agreeing disclosure requirements with influencers.
Companies should be aware of platforms that have expiring media posts, like Instagram Stories or Snapchat. Marketing communications that use expiring media posts should include a relevant disclaimer. As the ASAI Guidance notes “this is so that were a consumer to view the content after the first post had expired, they would still be aware that the material was commercial marketing communications”. Brands may need to ensure that influencers adopt specific practices for expiring media posts.
Do: Ensure that influencers are required to comply with data protection law
It is important to ensure that any marketing of your products complies with data protection law. For example, this is particularly important if you are engaging an influencer to help promote a competition or giveaway in relation to your products, for example where a ‘winner’ will be selected.
To do so, you will first need to consider the data protection roles of the parties. This includes, for example, analysing whether the influencer is implementing a promotion developed by your marketing department, or are they determining the parameters of the promotion. Once you have established the role in which the parties are acting, you should ensure that the influencer contract reflects this.
Given the indication by the Programme for Government of increased attention and enforcement in this area, companies should check that their influencer marketing communications are in line with legislation and the ASAI guidance.
Companies should also be aware of the new Consumer Rights Bill that is currently out for consultation. Part 9 of the Bill provides that consumers harmed by unfair commercial practices, as in the CPA, will have access to effective remedies, including compensation for damage suffered by the consumer and, where relevant, a price reduction or the termination of the contract.
Companies can implement the above suggestions to increase compliance of their influencer marketing communications with applicable law.
For more information, contact a member of our Commercial & Technology team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.