Updated: Sep 4, 2018
Last week, the Competition and Markets Authority (CMA) announced that it has launched an investigation into influencers who fail to disclose that they were sponsored to post content on behalf of brands.
In the UK it is currently unlawful for influencers to post content without stating that they were paid/ sponsored by the brand to do so under the Consumer Protection from Unfair Trading Regulations 2008.
George Lusty, the CMA’s Senior Director for Consumer Protection, emphasised the impact that social media stars can have on their audience. Considering this reach they have on their followers it is really important that they are completely transparent as to whether they have been sponsored by the brand to promote them. Failure to do so leaves consumers vulnerable to false advertising which can poorly impact their consumer choices.
Figures published by influencer marketing firm Buzzoole found that the use of #ad and #sponsored tags on Instagram posts has increased by 44% in the first half of 2018, suggesting that the legislation has been taken on board. However, as the industry expands at such a rapid rate, it is becomming increasingly harder for regulators to monitor brands.
Attemps have been made to get around the regulation by using alternate hashtags such as ‘spon’ highlighting just how difficult it can be to regulate.
This shouldnt be swept under the rug as the implications for brands could be disasterous. If the CMA seek to crack down harshly on influencers then it could potentially negatively impact brands, some of which are now dedicating substantial portions of their marketing budgets to influencer marketing. Social content has been found to drive sales even a month after the initial post.
Not only could a crackdown dent the market as brands and influencers would be forced to adopt better compliance controls, it could also amplify negative buzz around influencers and influencer marketing in general. Customer are already becomming sensetive to the idea that influencers may not always be promoting content that they genuinly beleive in and love . Not only do they feel a lack of trust, they also feel fatigued by the constant sales pitch every time they go on their phone.
If this negative portrayal of influencers continues, this could have strong negative impacts on the digital marketing strategies of top firms. Therefore, in a sense, the new CMA regulation can help to provide legitimicy to social media campaigns as consumers are informed as to whether they’re reviews are genuine or paid.