The landscape of social media has changed drastically over the last decade. Influencer Marketing is popular and profitable, as small businesses and huge corporations. Nowadays, making a living via the internet or social media is not only a viable career, but, for many, a desirable one. With the right charisma and social media know-how, anyone can find an audience and build a following. Some gather hundreds of thousands or even millions of followers, attaining an almost celebrity status on platforms like Instagram and Youtube.

How Does Influencer Marketing Work?

Many of these “influencers”, as they’re called, make money off of advertising to their following from corporate sponsors and marketing themselves via merchandise. However, advertising on social media platforms is not regulated as strictly as television ads, for example. This has caused some controversy on whether or not influencers should be forced to disclose individual personal posts from sponsored ads. It also raises questions on how to classify influencers, since in many ways they operate as their own business.

Advertising Standards Authority, UK’s regulator of advertising, declared recently that anyone with more than 30,000 followers is now classified as a celebrity. Under this ruling, these influencers are subject to additional rules and regulations. In general, Europe has been cracking down more on social media regulation over the last few years. The ASA released a full guide with the new rules for Non-broadcast marketing.

This guide first outlines what qualifies as an ad:

  • Paid-for space
  • Self-advertising (products/services/events), even on personal channels, promotional marketing
  • Affiliate Marketing
    • EX: content promotes a service and has hyperlink that you get paid for each click-through or sale
  • Advertorial marketing
    • paid’ you some way (could be freebies – products, gifts, services, trips, hotel stays for free) AND had some editorial control over content (or just final approval)
  • SPONSORSHIP isn’t included under the CAP code, but ADVERTISEMENT is

And then outlines how to disclose advertisements:

  • Must be obviously identifiable as such’
    • consumers shouldn’t need to work to figure out it’s an ad, and shouldn’t have to interact with or click it to realize it’s an ad
  • Making it obvious includes hashtagging #ad, #advert, #advertising, #advertisement, @ the brand, and/or #sponroship, #spon (though these are less obvious).
  • Attempting to hide the fact it’s an ad by putting #sp at the end of 30 other hashtags, for example, is not recommended.
  • If this is not clear, the post breaks the law

There are other rules pertaining to making claims, age-restricted products, and promotions for thing with lots of rules like supplements.

Endorsement Rules from the Federal Trade Commission

In the United States, the Federal Trade Commission has also come out with some guidelines for paid endorsements via social media. They have an Endorsement Guide that outlines disclosure. The FTC disclosure rules are guided by credibility. Influencers build up credibility and trust with their audience, which is very effective for marketing. However, they may be more hesitant to immediately accept a product promoted by an influencer if they know they were paid to promote it. This is what the FTC is trying to prevent with their guidelines, as such:

Is there a “material connection” between the influencer (endorser) and an advertiser, it should be disclosed clearly. This doesn’t necessarily mean money – like the ASA guidelines, it also includes gifts, free products, and other perks. The Endorsement Guides from the FTC apply both to marketers and do the influencers endorsing their products.

How Can I Legally Use Influencer Marketing On Social Media?

Here are some simple rules to get you started on legal, ethical influencer-based advertising!

  • If the Endorser hasn’t actually tried the product or used it in the way they say, they shouldn’t talk about their experience with the product
  • For sponsored products, the Endorser has to disclose their relationship with the marketer/brand. Hashtags like #sponsoredpost, or an explicit disclosure like “This is a sponsored post from my friends @brandname, but the opinions are mine and I love this product!” are also acceptable
  • An Endorser can’t say they had a positive experience with a product they were paid to review if they had a bad experience with it
  • Brand shouldn’t utilize influencers in advertising campaigns involving situations that don’t allow for disclosure (like “liking” or “loving” a post)
  • For video media, influencers have to disclose the relationship or endorsement with the brand *in the video*, not just the description. This is most relevant for YouTube influencers, but applies to all video-based social media posts.
  • Social media disclosures must appear above the “click to read more.” The disclosure should appear prominently at the beginning of the post.
  • Disclosures must be obvious and understood. For example, #sp at the end of a whole list of hashtags is very easily missed, but #sponsoredpost at the beginning is much more acceptable.

The key is choosing an honest local influencer with values that align with your business. By reaching out to an influencer that is inclined to find use for your product, you’re a lot more likely to get a positive result!

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