Changing the way that celebrities advertise on social media

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Changing the way that celebrities advertise on social media

The widespread practice of social media influencers endorsing products from cars to clothes, holidays to hotels has become well known and they can earn tens of thousands of pounds from companies for just a single post on Instagram featuring a product or service.

Sixteen social media stars including Ellie Goulding and Zoella have pledged to change the way they label social media posts in an initiative from the Competition and Markets Authority (CMA) have clamped down on the practice of stars being paid for endorsing products, without disclosing they were being rewarded by the company.

The CMA has said that it has secured the formal commitments from 16 celebrities to ensure that they will now state clearly if they have been paid or received gifts or loans of products which they endorse.

Why do brands use celebrity endorsements?

Online celebrity endorsements are becoming increasingly popular with brands from small to major league businesses. This is because celebrities are considered influential with large online followings on all social media platforms. Celebrities are also generally trusted by their followers. If they are seen using a product or service, it shows their followers that it is something worth using and helps to build trust in a brand. Products from the health, fitness and beauty industries, in particular, have benefited from such ‘influencer marketing’ strategies.

Another reason why brands use social media stars to advertise is that it opens their products up to new markets and audiences. A good example of this is when Nike partnered with Michael Jordan to expand beyond primarily sponsoring tennis and track athletes. This partnership has been so successful that it has resulted in its own subsidiary company, Air Jordan.

Why do the rules need to change?

The CMA has said that online endorsements can be misleading. When stars are paid or rewarded to promote a product in their social media feeds, consumer protection law requires them to disclose that they’ve been paid or incentivised to endorse a brand.

Currently, some celebrities who endorse brands risk giving a misleading impression that a post reflects their personal view about a product or service. It’s seen as unfair that some brands receive what appears to be a ‘genuine’ endorsement whereas others are labelled as sponsored content. Usually, when this happens it’s the Advertising Standards Authority (ASA) that gives them a small slap on the wrist if a complaint is made.

Andrea Coscelli, Chief Executive of the CMA, said:

“Influencers can have a huge impact on what their fans decide to buy. People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy.”

“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 enforcement action taken by the CMA has seen a number of social media stars pledge to be more transparent when posting online. It also sends a clear message to all influencers, brands and businesses that they must be open and clear with their followers. We will also continue our work to secure more improvement in this space.”

What are the new rules?

(Source - BBC)

  • Influencers must clearly label content that has been paid for or for which they have received gifts or loans. #ad or #sponsored are examples, and must now be prominently displayed at the beginning of the post, rather than buried away among other hashtags.

  • Even gifts that are made without a requirement to post about them afterwards must be declared if they appear in social media content. #freebie is suggested as a label.

  • It is no longer enough for influencers to declare the companies they work for in their profile. Each post must be treated in isolation and all paid content or commercial relationships declared.

  • If an influencer is engaged in various commercial relationships related to an individual post, each one must be declared.

What actions are social media platforms taking to help influencers make this clear to their followers?

Currently, Instagram is the only one that makes paid partnerships obvious with the ‘Paid-Partnership tool’ that is shown above an image:

(Image source: Instagram @roxxsaurus)

This makes it clear that a celebrity is being paid to endorse the product.

Overall, celebrity endorsement doesn’t appear to be going away anytime soon and brand marketing seems to be taking a big shift towards influencers pushing their products. Have you had any experiences with influencer endorsement for your products, has it worked well? We’d love to hear your thoughts on how well, or not, well it worked for you - send us an email on [email protected] to get in touch.