Getting it right with influencer marketing and celebrity endorsements
Influencers can help brands reach audiences that might normally be out of their reach, but there are rules that need to be followed, warns Goodman Derrick partner Paul Herbert
Influencer marketing is an increasingly common component of brands' marketing strategies. Its inherent effectiveness is that it is seen as a more natural form of marketing and can enable brands access to previously inaccessible audiences.
However, those very qualities can also create problems, particularly around transparency. So tech businesses need to be aware of the rules and traps to avoid a potential negative impact on their reputation when using an influencer to promote a product or service, such as an app.
Influencer marketing is now routinely used across a wide variety of sectors, from fashion, luxury goods, hotels, travel, technology and even automotive. It's a form of advertising whereby brands market their products by engaging with an "influencer", usually a person who has a large following on social media platforms, who can exert influence over the buying decisions of their audience.
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A post shared by Louise Thompson (@louise.thompson) on Apr 22, 2018 at 9:34am PDT
Usually these people are celebrities from the entertainment or sporting worlds, but equally they may be everyday souls who have gained a following simply because of what they say or do on social media.
Influencer marketing is regulated by the Competition and Markets Authority (CMA), the Advertising Standards Authority (ASA) and the Committee of Advertising Practice (CAP) - the body responsible for writing the various Advertising Codes. These bodies have produced specific guidance: "An Influencer's Guide to making clear that ads are ads".
The main issue with influencer marketing is that if the marketing is not clearly identifiable as such, consumers may be misled into thinking the influencer is giving an impartial opinion as a consumer.
The CAP Code requires:
- That all "marketing communications must be obviously identifiable as such"; it recommends that labels such as "Ad" and "Advert" are used, which should be prominent and obvious; and
- That "marketing communications must not materially mislead or be likely to do so"; a misleading communication may include hiding material information or exaggerating claims.
The CMA Guidance also requires Influencers to make clear if they have received any kind of reward, such as gifts, money, free services or the loan of a product, and any relationship they may have with a brand.
For the CAP Code to apply there needs to be both payment and control by the advertiser. Payment is not limited to money: freebies also count, as is being paid as a brand ambassador. Control can include anything from a brand setting out what a post should contain to having the power to request changes, eg where a brand pays an Influencer to post a picture on Instagram with their product and stipulates specific hashtags.
Where influencers are receiving money or freebies but the brand has no control over what the Influencer produces the CPRs would still apply. Correspondingly, if you're not paying an Influencer - be aware, there may still be an element of control which could stymie the communication.
An example of Influencer marketing gone wrong concerned an Instagram post of Louise Thompson (of Made in Chelsea). It included a picture of Louise wearing a Daniel Wellington watch and cuff (with the advertiser's Instagram page tagged) and captioned:
"Sippin' on yummy coconuts 3x size of my skull! Wearing my @danielwellington classic petite Melrose 28mm watch and matching cuff… you can get 15% off using the code ‘LOUISE'."
In response to complaints (correction - 1 complaint!) the ASA held this to be in breach of the CAP Code as it was not clearly identifiable as a marketing communication, and notably, failed to use the identifier "#ad". The ASA were satisfied that the relationship involved both payment and a sufficient degree of control to bring it in scope.
The post remains up, but is now prefaced by the statement that it is a "paid partnership" with danielwellingon, the watch maker.
Payment is not limited to money: freebies also count, as is being paid as a brand ambassador
Celebrity endorsement is a slightly different animal. Whereas influencer marketing is conducted via social media platforms, celebrity endorsement involves investing, often considerable sums, in buying the services of a celebrity whose fame extends far beyond social media channels and promoting that relationship in marketing activity.
Clearly, you cannot suggest an endorsement if no relationship exists. Advertisers must also ensure that any claims made by the celebrity pass muster under the Advertising Codes: The fame of the celebrity does not lessen the need to ensure compliance with basic principles such as ‘misleadingness'.
And beware the fate of those cosmetic companies which have used post-production techniques (or photoshopping) to exaggerate the efficacy of their products on the featured celebrities!
Detractors decry influencer marketing, in particular, as renting out opinions for cash. But it does have a place in the marketer's toolkit as long as the influence element does not eclipse the equally important transparency element, as well as ensuring compliance with the rest of the CAP Code. Celebrity endorsements are limited to those brands with very deep pockets.
Paul Herbert is a Partner at London law firm Goodman Derrick LLP. For more social media legal advice, check out the law firm's YouTube channel:
Image by Gerd Altmannfrom Pixabay