Social media: How to spot an influencer ad and why advertising rule breaking is a problem

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Social media influencers have "been put on notice" by the advertising watchdog over "unacceptable" ad rule breaking.

After a monitoring sweep of posts revealed widespread failure to disclose advertising, the Advertising Standards Authority (ASA) found the proportion of influencers sticking to the rules “is far below what we would expect”.

What has the Advertising Standards Authority (ASA) said?

The ASA said there was an “unacceptable” level of non-compliance from influencers after years of extensive advice to help influencers and brands understand their responsibilities.

The ASA checked the Instagram accounts of 122 UK-based influencers over three weeks in September to gauge whether they are sticking to rules which require them to clearly reveal when their posts are ads.

The findings show the proportion of influencers sticking to the rules “is far below what we would expect”, the ASA said.

Almost a quarter of the Stories it assessed were advertising but only 35% of them were clearly labelled and obviously identifiable as such.

How much money can influencers make?

A lot.

Social media influencers can make big bucks for promoting products, in fact, it can be so lucrative that influencers who have built business empires from their profiles have been dubbed the “Insta-rich”.

An A-list celebrity such as Dwayne Johnson, Kylie Jenner or Kim Kardashian can be paid from $850,000 (£660,000) to $1m for a single post, according to research by social media consultancy, Hopper.

Jamie Oliver and Gordon Ramsay, ranked 98th and 99th respectively in the latest available data, could make about $20,000 per endorsed post.

Italy’s most famous Instagram star Chiara Ferragni - who has 21 million followers, considered floating her clothing-to-lifestyle personal brand on the stock market last year.

Based on the revenues the three businesses she controls, her group could be valued at €80m (£73m).

The influencer marketing industry was predicted to be worth £7.5billion in 2020. It is expected to further grow to 162 million in 2020 and surpass 370 million dollars in 2027.

How to spot an influencer's advert

According to the 2020 UK Influencer SurveyOverall, only 30% of all influencers’ content receives some sort of payment or gift.

But the lines are a little blurred, with gifted products also counted as advertising which is often where the confusion comes in.

The ASA received a 55% increase in complaints about influencers last year compared to 2019, from 1,979 to 3,144, showing consumers continue to struggle with distinguishing online ads from other content.

Some 61% of complaints in 2020 were about ad disclosure on Instagram.

Under the rules, it must be obvious to consumers before they read, “like” or otherwise interact with a social media post if it is an ad.

In most cases, the use of #ad, or a similar indication, is the clearest way of alerting readers.

Among the failings the ASA found were inconsistent disclosure of ad content across consecutive Stories, ads accurately disclosed in a post but not in a corresponding Story, and ad labels in small font, obscured or in a very similar colour to the background of the Story.

The ASA also warned influencers not to rely on bios or past posts to make it clear to consumers they are connected to a product.

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Do the rules apply across all platforms and media?

Yes, but the ASA focused on more than 24,000 Instagram Stories as they tended to attract the most complaints.

The ASA said it had contacted all the influencers as well as a number of brands and put them on notice that it will take enforcement action if future spot-checks reveal problems.

It warned it would consider naming them on a dedicated page on its website and work directly with the platforms and the Competition and Markets Authority on further enforcement action.

Who were the influencers?

The ASA declined to name any of the influencers it found to be breaking the rules at this stage but did not rule out naming and shaming in the future.

ASA chief executive Guy Parker said: “There’s simply no excuse not to make clear to the public when positive messages in posts have been paid-for by a brand.

“While some influencers have got their houses in order, our monitoring shows how much more there is to do. We’ve given influencers and brands fair warning.

“We’re now targeting our follow-up monitoring and preparing for enforcement action.”