LONDON: Some 15 businesses and 43 unnamed social media personalities have received a written warning from the UK's official consumer regulator about their disclosure of paid-for online content.
The Competition and Markets Authority (CMA) reminded them that arranging or publishing advertising that is not clearly labelled could result in breaches of consumer protection law.
The watchdog acted after it investigated 19 marketing campaigns delivered by Social Chain, a Manchester-based influencer marketing agency, between March and July 2015.
It stated that "Social Chain used its own social media accounts, and arranged for widely followed social media personalities, to promote films, games and takeaway and dating apps, without readers being informed that the content was paid-for advertising".
According to the CMA, these promotions appeared on social media accounts with a combined reach of around 4m followers and Social Chain also helped to ensure that some of these campaigns trended on Twitter, which may have increased their readership further.
For its part, Social Chain accepted the ads may have been difficult for readers to distinguish from other posts, conversations and jokes they appeared alongside.
"Social media personalities can have an important influence on people's views, especially young people," said Nisha Arora, Senior Director for Consumer Enforcement at the CMA.
"It is therefore crucial that when people decide what to buy, they should not be misled by adverts on social media that read like independent opinions. Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such.
"It is also important that, when consumers read reviews on a company's website, they are given the complete picture. Critical reviews must be published as well as those that praise the company's products and services."
The CMA report almost coincided with a separate survey in the US, which also raised questions about the role of influencer marketing and promotion disclosure.
According to a poll of 347 influencers by engagement network SheSpeaks, the vast majority (95%) said they disclosed to their followers that they were paid by a brand, but a quarter (25%) also reported that they had been expressly asked by brands not to disclose that they were remunerated for their work.
Data sourced from CMA; additional data by Warc staff