Influencer ‘#ad-vertising’ – the ASA and the CMA’s response to the DCMS

Influencer marketing is a crucial sector of the UK advertising industry. Influencers have a more personal relationship with their followers than traditional advertising, which increases the likelihood that their followers will buy what they’re promoting, but it also puts those followers at an increased risk of exploitation by being misled.

In fact, in 2022 the Digital, Culture, Media and Sport (DCMS) Committee commented that “if you dig below the shiny surface of what you see on screen, you will discover an altogether murkier world where both influencers and their followers are at risk of exploitation and harm online”. That statement from the DCMS Committee Chair, Julian Knight MP, followed the publication of the Committee’s ‘Influencer Culture: Lights, Camera, Inaction?’ report, which suggested that the influencer advertising framework was not keeping pace with the growth of the sector and ought to be reformed.

The Advertising Standards Authority

The Advertising Standards Authority (ASA) requires influencers to make their followers aware of which posts contain adverts. Influencers frequently comply with that requirement by including “#ad” on their posts or in their captions.

The ASA monitors adverts across the UK, including those posted by Influencers, for compliance with advertising rules. The ASA identifies advertisements by its payment and control test, meaning that a post is considered an advert if the advertiser exerts a degree of editorial control over the post and if they pay the influencer to post. So if you’re being taken on a brand trip and the brand is exercising some control over what you post, their content from that trip should be marked as advertisement.

As someone who consumes a lot of influencer marketing, I wasn’t surprised to read that the DCMS found insufficient compliance with that requirement. They’ve called for the ASA to strengthen that rule and be afforded greater enforcement powers. The DCMS suggested that the control element of the ASA’s test should be dropped to expand the ASA’s scope, but the ASA consider that the control element stops them from straying outwith their remit and explained that the two-part test catches the majority of influencer adverts.

The ASA penalises influencers who fall foul of its rules by putting them on a list of “non-compliant social media influencers”, which is published on the ASA website.

In 2021, the ASA used these powers following an inquiry into compliance on Instagram stories – the ASA’s report is available here. The inquiry revealed that a number of influencers were not properly disclosing ads on their stories. The ASA wrote to the non-compliant influencers, as well as a number of the brands that featured in the undisclosed ads, notifying them that the ASA would monitor their ongoing compliance and that any future shortcomings may result in enforcement action.

The ASA considers that its current sanctions, and the threat of naming and shaming, are sufficient and successfully secure compliance, but the high numbers of those who don’t comply and who aren’t penalised suggests that the current approach isn’t watertight.

The Competition and Markets Authority

The disclosure requirements from the Competition and Markets Authority (CMA) have a slightly wider remit and are triggered by payment only, so any posts that fall outwith the ASA’s control test would be caught by the CMA. The CMA enforces competition and consumer laws and can conduct investigations in relation to suspected breaches of those laws in the market. The ASA and CMA work together to ensure that consumers “get a good deal” (to use the CMA’s words) and are not misled by advertising.

In response to the DCMS report, the CMA confirmed that they have obtained undertakings from Facebook in relation to its Instagram platform, which seeks to facilitate compliance with the disclosure requirements. This includes:

Creating prompts for influencers to remind them to disclose any ads
Implementing tools that will enable brands to identify posts that promote their products so that they can ensure the proper disclosures have been made

Those tools should help brands play their part in ensuring that any posts that they commission are compliant. The CMA confirmed that they are continuing to engage with other social media platforms to reach similar arrangements.

Brands do appear to be taking the issue more seriously and can take steps like issuing guidance notes with their influencer gift packages setting out what’s required of the influencer if they’re posting an ad, which is helpful to manage the brand’s own risk if the influencer gets caught out, but ultimately responsibility rests with the influencer publishing the post.

Impact

The ASA and the CMA’s response confirms that they take seriously the importance of compliance with advertising regulations by influencers and the brands that work with them because they are willing to sanction those who don’t comply.

While the naming and shaming approach has previously gained some traction in the media, which could affect followers’ trust in the influencer and cause brands they work with some reputational damage, its impact appears to have been limited.

Since the report was published, not much has changed and the influencing world continues to grow, particularly with the increased popularity of different platforms, including TikTok. If consumers are to be properly informed about the advertising they’re consuming, the ASA and CMA need to improve their monitoring for non-compliance and have greater powers to sanction and enforce those sanctions against repeat offenders.

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