Rules of Influencer Marketing

Jul 19, 2019 by info@wordofmice.com in  SMI

It’s no secret that the influencer marketing industry has grown rapidly over the last decade. Whilst speaking at a recent marketing convention, I presented the statistic that over 300 new influencer marketing agencies and platforms were created last year to illustrate how this booming industry continues to gain momentum. But some of the criticisms still levelled at it are that it is unregulated; it is the Wild West of the marketing world; that influencer fraud, fake followers and non-disclosure of paid-for relationships is rife. But is that really the case? And is it a global problem or are there just a few rogue states where this kind of marketing anarchy is tolerated?

 

A few simple principles

Actually, influencer marketing is subject to rules and regulations in the same way as all other types of marketing. In the UK and throughout much of Europe the regulations are created and enforced by self-regulatory bodies, government departments and the courts. But is there any synchronicity? Generally, yes there is, because it is a universal principle that consumers should be able to tell when they are being advertised to and those ads should be legal, decent, honest and truthful.

For influencer marketing this transparency requirement means that, if an influencer has been gifted a product or paid to endorse it, a consumer should be given that information as it may affect how they evaluate the endorsement. So, for example, the rules in the UK regarding which posts require disclosure are largely similar to those in France and the U.S (but Germany has a tougher regime).

Ad or gift or sponsorship?

Whether B2B or B2C, there is still some confusion about the correct labels to use for disclosure, as is evidenced by the huge range of options being used across platforms such as #ad, collaboration, #spon, AD, #collab, #gifted etc. The answer to correct disclosure lies in the nature of the brand-influencer relationship and whether the brand exerts any editorial control over the post. Beyond that, there are also guidelines on prominence, placement and positioning of disclosure labels.

Guidance and training

For influencers, agencies and platforms, finding out what the influencer marketing rules are and how to apply them is no longer difficult. The FTC and the self-regulatory bodies across Europe have issued online guides and FAQ’s on disclosure and many law firms provide web updates and blogs on court cases involving influencer marketing. Alongside the regulatory specialists like myself, there are also many responsible influencers who blog and vlog about the rules for their individual niches and provide tips and guidance on how best to comply with them.

Penalties and punishments

If the rules are broken and a brand and influencer find themselves the subject of an investigation or court case, the penalties can vary significantly but most regulators start with a warning (like these FTC letters about vaping) with the threat of financial sanctions and potential imprisonment if the regulations continue to be breached. Maximum potential fines can vary from €80,000 in Belgium up to €5M in Italy, although these are only theoretical figures at present because no influencer or brand has been hit with them yet.

But perhaps the most effective penalty is the negative publicity that is generated when a regulator announces action against a brand and influencer. Media outlets are quick to pounce on any negative information about influencers and regulatory investigations or court cases are unlikely to go unnoticed.

 

female social media influencer

Smart influencers

To avoid breaking the rules, influencers should not only familiarise themselves with the general guidance on influencer marketing, but also on any specific rules relating to the products they intend to endorse. Some are obvious e.g. age restrictions for alcohol or gambling products, but for other sectors such as travel and tourism, there may be some subtle restrictions relating to the images used, the locations or the facilities. An influencer may believe that they’re not responsible for any factual claims that they make if they’ve been provided with that data by the brand but it is their responsibility to make sure all claims in their posts are correct so, if in doubt, they should ask the brand for clarification or evidence e.g. that they really do have the biggest conference hall in the city or that they have more 5* reviews than their competitors.

Intelligent brands

It’s arguable that brands, not influencers, suffer the greater reputational damage from an upheld ruling or court case so there’s no doubt that compliance with the rules should be at the forefront of their influencer strategy. That strategy should include:

  • selecting responsible influencers (checks for follower fraud, disclosure non-compliance etc);
  • providing influencers with contracts that contain the rules on disclosure and any other salient regulatory points (but cut-out the legalese);
  • issuing influencers with FAQ sheets on the product/service and a detailed guide on regulatory rules to support the brief information in their contracts;
  • monitoring influencers’ posts for compliance;
  • a plan that allows non-compliant posts to be pulled as soon as an error is noticed or a complaint is received.

Clued-up influencer marketing compliance of the future

So does influencer marketing still deserve it’s Wild West label? I think not. As influencer marketing has grown and diversified, so have the rules and guidance and now, with a host of compliance training and workshop resources available to brands, there’s no excuse for acting like a clueless cowboy.

Rupa Shah

Influencer Marketing Regulatory Consultant

Founder and Director of Hashtag Ad Consulting

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