The rise of influencer marketing
Influencer marketing. Everybody’s doing it. Well, perhaps not everybody, but almost everybody. That’s because it’s generally acknowledged that social media influencer marketing is the most significant development in marketing in the last four or five years, and it’s likely to form at least part of most brands’ marketing strategy.
There is no single standard for measuring the effectiveness of influencer marketing, but it tends to be perceived as authentic and trustworthy. Brands certainly see it as a way of talking directly to consumers, albeit via an intermediary, and, particularly given the decline in traditional TV viewing among young people and the rise of ad blockers, key to reaching millennials and generation Z, who need social proof to purchase.
It’s hard to quantify accurately the global spend on influencer marketing, but according to the media agency Mediakix, $1.6 billion may have been spent on Instagram alone in 2018 and the influencer market as a whole is likely to be worth somewhere between $5 and $10 billion by 2020.
What is an influencer?
In short, an influencer is anyone who opens a social media account, grows their followers and earns a living – or at least a partial living – from promoting goods and services to those followers. They can be people who have initially acquired their celebrity through another medium, for example reality TV, or a profession, such as journalism or modelling. However, anybody can become an influencer and the majority – particularly those you’re less likely to have heard of – have achieved influencer status purely through their online presence.
Influencers are categorised according to the size of their following. There is, of course, some debate about the precise numbers, but as a general guide a macro influencer is someone who has over 100,000 followers; a micro influencer has between 1,000 and 10,000 followers; while a nano influencer has up to 1,000 influencers.
Faking followers
Not all influencers are quite as popular as they appear to be, though, and fake followers has been, and continues to be, an issue, with some industry commentators suggesting that as many as 15% of Twitters ‘users’ may be fake.
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Last June, Keith Weed, until his retirement at the end of 2018 chief marketing officer of Unilever, highlighted the problem and what he saw as the solution when he said,, “The key to improving the situation is three-fold: cleaning up the influencer ecosystem by removing misleading engagement; making brands and influencers more aware of the use of dishonest practices; and improving transparency from social platforms to help brands measure impact.”
Unilever, along with brands such as L’Oréal, have now developed formal vetting procedures to ensure the influencers they work with haven’t bumped up their numbers by buying followers and are aligned to their brands.
Being transparent
It pays to be transparent – Prizeology did some research which showed that 60% of the public say their perception of a brand improves when the brand is transparent about its use of product promotions and influencer marketing.
Viewers sitting through the Coronation Street commercial break are well aware that they’re watching a series of ads. These short promotional spots are subject to certain standards and there is a shared understanding about what they are, so there is no statutory requirement to explicitly label them as ads.
However, the same doesn’t go for promotional messages on social media, so communications from influencers who have a commercial relationship with a brand need to be labelled with #Ad. The Advertising Standards Authority (ASA) is the body which regulates promotional marketing through the CAP Code, and that’s its preferred hashtag.
The two-part test for #Ad
The ASA applies two basic tests to determine whether a post should be tagged #Ad. These are:
- is the influencer being paid?
- does the brand have editorial control?
However, there has been confusion about how to apply the tests, so the ASA has produced An Influencer’s Guide to Making Clear that Ads are Ads.
This sets out what counts as payment – essentially an influencer is considered to have been paid if they’ve received a fee, free products or services, trips or hotel stays, or even just a present. If an influencer has been paid to be an ambassador for a particular brand or product range, that counts as payment, too.
The guide also sets out what counts as editorial control. This doesn’t have to be control solely over words or hashtags, but can also be an instruction to post a particular type of image or do something specific in a video. CAP Code compliance in general can be quite complicated, so if in doubt consult a specialist.
Who is responsible for disclosure?
The answer is that both parties are equally responsible for disclosure. In July last year, the ASA ruled on a complaint about an Instagram post by influencer Louise Thompson, who has 1.1 million followers. In the post she was shown wearing a Daniel Wellington watch and she promoted a 15% discount code for the company’s products, but she didn’t include #Ad. The complainant questioned whether the post was obviously identifiable as a marketing communication and the ASA agreed that it wasn’t.
Daniel Wellington had endeavoured to comply with the CAP Code, because it had a written contract with Louise which stated that a term such as #Ad should be used to make it clear that the post was a promotion. However, despite this it was quite heavily censured by the ASA and was certainly exposed to reputational damage.
Penalties for non-disclosure
If the ASA investigates an alleged breach of the CAP Code it makes a ruling and can either uphold or not uphold the complaint. It might instruct the influencer and brand not to run the promotion again, and to observe the CAP Code in future, but it can’t issue a financial penalty.
However, the ASA is not the only regulator in this area. The Competition and Markets Authority (CMA) also has a remit to protect consumers under the Consumer Protection from Unfair Trading Regulations 2008. This covers influencer marketing and the CMA can take those who break the law to court, which can result in fines.
In January, the CMA announced that 16 high-profile celebrity influencers, including Alexa Chung, Ellie Goulding and Rita Ora, had made a formal commitment that when they are paid to endorse products or receive products as a gift or loan, they will highlight this to their social media followers. This sent a very clear to messages to influencers and brands that they must disclose and non-compliance will not be tolerated.
Sarah Burns
Sarah Burns is managing director of Prizeology, which works with businesses, brands and agencies on all types of promotion, in any space, with a particular focus on best practice and compliance.
