Sixteen leading influencers – including singers, reality TV stars and models – have formally committed to the CMA that they will make it clear when they are pushing a product online as part of an endorsement deal.
At the same time, the watchdog has sent warning letters to a number of other celebrities, as well as 70 ad and PR agencies since it began an investigation in August last year, telling them to change their practices.
It has also issued a guide making influencers, marketing companies, agents and brands aware of their obligations under consumer protection law.
Influencers who are paid or rewarded to promote a product or service are required by consumer law to disclose this clearly. If they don’t, the CMA has the power to prosecute.
Some influencers use the hashtag #ad on posts to indicate the content is an endorsement, but this was deemed insufficient by the CMA, which said the commercial nature of the post must be displayed prominently, leaving no ambiguity.
“People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy,” said Andrea Coscelli, Chief Executive of the CMA.
“You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on.”
The watchdog said three out of five people it had interviewed said they had been influenced by celebrity endorsements.
Late last year, research conducted for BBC Radio 4 found 82% of people thought it wasn’t always clear when an influencer was being paid or rewarded to promote a product.
This topic is the focus of the February issue of Admap (published Monday 4th), with one contributor claiming “the sheen has worn off influencers”. Ida Siow, Head of Planning, JWT Singapore and Southeast Asia, argues that “the glut of transactional sponsorships and mismatched tactics with no real connection between brands and their influencer endorsers has blindsided businesses” and says both brands and influencers need to “open up their horizons and their ambitions, and reclaim the power and meaning of influence”.
Sourced from CMA, BBC; additional content by WARC staff