Business

Why adding the #ad hashtag is now a must for 'influencers'

Celebrity "influencer" Kendall Jenner
Niamh Magee

SOCIAL media personalities and “influencers” who earn money from endorsing products and services via their social media platforms have been sent a strong message that they must clearly state when they've been paid for their posts if they don't want to fall foul of increased scrutiny by the Competition and Markets Authority (CMA).

It released information last week in relation to its recent investigation in this area, confirming that 16 high profile stars, including Rita Ora and Ellie Goulding, have pledged to ensure they will now clearly indicate if they have been paid, or otherwise rewarded, for products or services they endorse via social media.

Influencer marketing continues to gain momentum as a successful strategy for consumer brands to reach their target audiences and now the UK's competition watchdog is stepping up its activity to crack down on poorly labelled paid for endorsements on social media. The CMA's latest move is interesting because it has named celebrities who can have a huge impact on what their fans choose to buy.

“If social media stars do not label their posts properly, fans or followers may be led to believe that an endorsement represents the star's own view, rather than a paid-for promotion. They are more likely to place trust in that product, as they think it has been recommended by someone they admire,” the CMA has said previously.

While local influencers in Northern Ireland perhaps don't have the same following or earn the same amount of money as globally recognised stars, these rules apply to them in equal measure.

By now most frequent users of social media platforms will be familiar with the hashtags “#spon”, “#af” and “#ad”. These hashtags are used to indicate that the “influencer” has been paid or otherwise rewarded to endorse the product, place or experience referred to in their post. In particular, “#af” or “#affiliate” means that the product is accompanied by an “affiliate link” and if you purchase the product via that link the influencer is rewarded through a percentage of the profit, typically 5 to 10 per cent.

Following this announcement, we should see an increase in the use of the #ad hashtag being displayed prominently at the start of every post, as opposed to hidden amongst a raft of hashtags at the end of a post, and use of Instagram's “paid partnership” tool to demonstrate the post has been sponsored.

The development comes as platforms such as Facebook, Instagram and Twitter have all registered an increase in the number of complaints about posts which fail to adequately declare when the celebrity or influencer is receiving money or a perk in exchange for promoting a service or product.

The issue was also highlighted this month in documentaries about the disastrous Fyre Festival, a high-end music festival promoted by models and influencers with huge Instagram followings, such as Bella Hadid and Kendall Jenner. The festival collapsed owing millions of dollars to investors and fans, raising questions about whether influencers who endorsed it held any responsibility for its misleading advertising.

The CMA has been working closely with the Advertising Standards Agency (ASA) in its investigations. The ASA has its own code of practice in this area and has not been afraid to enforce it, for example, taking action against Made in Chelsea star Louise Thompson for failing to disclose that a post, which including a special discount code for a popular brand of watches, was sponsored.

Love Island star Olivia Bowen was also recently reprimanded by the ASA over an Instagram post which promoted an eye shadow. The post, which didn't directly reveal that it was paid for, was ultimately banned and both the brand concerned and Olivia Bowen had to release a statement making their partnership clear.

While the Advertising Standards Authority has taken action against particular adverts or campaigns in the past, the CMA has the power to take action against the individuals if they repeatedly ignore the guidance.

If the CMA finds that practices by social media stars break consumer protection laws, it can take enforcement action by seeking a court order. Breach of a court order could ultimately result in the imposition of an unlimited fine or a potential jail term.

This means that anyone making a living as an influencer, in Northern Ireland or further afield, will now need to take appropriate steps to make sure their posts cannot be considered to be misleading.

:: Niamh Magee (niamh.magee@carson-mcdowell.com) is an associate at Carson McDowell

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