Influencer Marketing: Top Tips to Stay Compliant

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7 November 2023

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23 November 2023

Female influencer talking to camera advertising a product or service

Brands are investing little of their overall digital budgets in Influencer Marketing, just 4% of the $667 billion spent globally on digital advertising. With increasingly expensive advertising costs and consumers responding to influencer recommendations, 71% of brands say they expect influencers to play a bigger role in their overall digital marketing mix.

Tip 1. Put a contract in place to protect the brand, the influencer and the audience…

An influencer with a large following will likely have an agent you can liaise with and it is strongly recommended a brand has a contract in place with the creator. It is the simplest way to ensure clarity on all sides.

You don’t need a law firm to do this, contact PromoVeritas, a specialist marketing agency, our in-house legal team and years of experience can work with you to prepare a contract.

The influencer’s agent should encourage and guide the influencer to follow best practices but it is ultimately the responsibility of the brand to ensure regulations are adhered to.

Having a contract in place and a clear brief which stipulates what the influencer should include in each post are the simplest ways to ensure clarity on all sides.

Tip 2. Understand the rules & regulations governing Influencer Marketing and who is responsible for ensuring influencer compliance…

Consumer Protection from Unfair Trading Regulations 2008 (“CPR”) says,

CPR Rule 11: It is a blacklisted practice to use editorial content to promote a product where a brand has paid for the promotion without making it clear within the content or by images or sounds.

CPR Rule 22: It is prohibited to falsely claim or create the impression that the influencer is representing oneself as a consumer.

Payment includes:

Receiving cash or credit
Receiving a product or service for free
Receiving a product or service as a loan or a gift
Receiving a commission or any other incentive.

A commercial relationship must be disclosed if there is:

Any kind of payment, cash or credit given to the influencer by the brand, or if the influencer has been given the product or service for free or via a loan.

Any previous commercial relationship between the brand and influencer within the past 12 months, counting from the end of the most recent contract.

The Competition and Markets Authority (“CMA”), a government agency and the competition regulator in the United Kingdom, has published guidance on influencer marketing for brands and influencers themselves, which says,

Tagging a brand or business in text, a picture or a video requires additional disclosure.
Tagging a gift in text, a picture or a video requires additional disclosure.
Using discount codes in a post requires additional disclosure.
Any “paid” posts need to be labelled.

Avoid unclear hashtags, for example do not use:

#sp; #spon; #client; #collab
or put #ad directly after the name of the brand or business
- for example #[BRANDNAME]ad, or add #ad at the end of the post or among other text so that it appears hidden.

Control over influencer marketing is expected to get tighter under the Digital Markets, Competition and Consumer Bill which will come into force in mid to late 2024. The UK government will be giving the CMA the power to decide whether consumer protection law has been breached and to impose fines of up to 10% of annual turnover for those who infringe the regulations. If you are ever in doubt, use #ad.

Tip 3. Don’t forget Influencer Promotions must comply with CAP Code rules…

Whether an on-pack promotion or being run with an influencer, a promotion with prizes such as instant wins, prize draws and competitions, should comply with the CAP Code rules.

The promotor (whoever is running the promotion) should ensure,

Prize promotions are administered correctly and treat consumers fairly.

Prize draw winners are chosen using the laws of chance. If this is not done by a verifiably random computer process, there must be an independent observer.

Competitions (which involve an element of skill) must have an independent judge.

Prize promotions are an effective but often resource intensive marketing practice which carries an element of risk for the promotor if not run in compliance with local rules and regulations.

As a specialist and independent prize promotions agency, PromoVeritas have successfully managed more than 16,000 promotions, awarded more than £35 million in prize value and have a dedicated and experienced in-house Legal team.

Our team can provide a legal review of marketing communications, prepare suitable Terms and Conditions and contract agreements and offer complimentary Compliance Training to brands and their agencies. We tailor the session to your needs covering best marketing practices including Influencer Marketing in the UK, EU and globally.

Resources

We have collated a range of useful resources which you should review ahead of any campaign.

A Checklist for Influencers and Brands – Checklist 6 (asa.org.uk)
Hidden ads: Being clear with your audience
Business Responsibility and Social Media Endorsements

We would love to have a no obligations chat, send us an email or give us a call.

Sources: Meltwater – Digital 2023 Global Overview Report – DataReportal.pdf; https://enterprise.plus.shopify.com/rs/932-KRM-548/images/Commerce_Trends_Report_2023_Shopify.pdf