There is no question that brands are engaging with social media infleucners perhaps to give them a kick start with launching their presence on a new social media channel or to promote new products.
I have referenced how brands worked with influencers in relation to live streaming in previous articles including the issue of there often being no disclosure.
In this article, the first in a series on social media and influence marketing, I cover guidelines in the US and the UK relating to social media disclosures and endorsements, some data on why social media influencers are being considered more impactful in brand campaigns than paid celebrity endorsements and examples where brands have been in breach of guidelines in those markets. In a forthcoming article I cover the recent update to guidelines in Ireland.
Read the second article in the series which is about social media compliance and disclosures for sponsored give-aways and affiliate promotions.
Read the third article in the series where I ask why do celebrities, influencers and brands ignore guidelines about social media disclosures and platform policies?
I have to declare that this is a topic I feel very strongly about including the fact that many bloggers fail to disclose affiliate links in their blogs, news letters and social media posts. Disclosures for influencer marketing campaigns is a topic I cover in my social media workshops and keynotes – in fact it’s a topic I have covered in events for almost a decade.
When I judge digital marketing awards and the brand referneces it worked with influencers in a campaign I look to find the content referenced by the brand and then look for the influencers post for example on YouTube. And invariably there is no reference in the video or in the post on YouTube or the even the influencers blog about it being a sponsored post. For me, that also includes that the influencer has been given the product free to test.
Having a social media disclosure statement hidden away on a blog is no longer sufficient as so many other social channels are used to promote these campaigns by the brand and influencers alike.
With the increased popularity of Snapchat and now the launch of Instagram Stories, what we find is that content disappears over time. In the case of Irish influencers on Snapchat I see very few disclosing in their Snapchat stories that these are ads despite the fact there are new guidelines that were published earlier this year.
Unfortunately not all countries have the same rigorous standards of disclosure as there is in the US with the FTC guidelines (PDF). Read this Q and A about the FTC guidelines here. You can read the FTC enforcement guidelines here and also read the FTC native advertising guide for business here.
I checked with my Gen Z daughter who are avid users of Snapchat, Instagram and YouTube (she has no desire to create a Facebook account) if she could establish if the posts that were made by influencers she follows had been sponsored or paid for. Her response was interesting – she took the view that if an influencer posted about a product then they had either been given it by the brand or paid to post about it.
That is actually paying a disservice to those influencers who actually invest in products themselves.
In a recent article on AdWeek they comment:
Unlike other platforms like Instagram and Twitter where social celebs typically have to clearly label their content as paid endorsements, sponsored content on Snapchat has been murky for marketers until recently. Snapchat doesn’t have any strict rules for content creators to abide by, and it can be difficult to find misleading content since posts automatically disappear within 24 hours.
Frankly you should not need ‘strict rules’ on platforms such as Snapchat – it should be good practice and in the US I would expect that brands know the risks involved of not complying with the FTC guidelines for social media disclosures.
For details of the branded content policy on Facebook check out their press release here and their detailed guide here and in PDF format here.
For details of the product placement and endorsement policy for YouTube here.
Instagram does not have en endorsement policy but have some guidelines for promotions.
AdWeek went on the article to refer to some well known Snapchat influencers using social media disclosures on their Snaps. I took a look at some of the people I follow and it was interesting to see that for a campaign from an event this week for Samsung in the US (the event was being held in New York to unveil the new Samsung Note 7 smartphone) they were clearly stating their posts were sponsored – for exmple adding #collab, #ad or #sponsored to their Snaps. I should note that the people I feature in the header image on this post have done this for previous sponsored content so it is not new to them to do so.
It was good to see a number of examples of social media disclosures by social influencers highlighted in the AdWeek article as it may get marketers to pay attention to good practice for social influencer marketing.
However it did not seem that the influencers were given specific guidance by Samsung as they had different disclosures on their Snaps, and not all added a disclosure on every Snap where the product they had been given by the brand was featured. This is essential for Snapchat and now Instagram Stories where elements of stories are automatically deleted after 24 hours. This would be something I would be recommending that their agency or communications team review to ensure that they do not find themselves in a situation like the brands I mention later in this article.
Consumers Trust Influencers Over Traditional Advertising
Earlier this year, research was published from Twitter and Annalect studying awareness, favorability, and purchase intent, with the research covering more than 300 users to see how they responded toward brand influencers compared with their ad formats or suggestions from their friends. In a second phase, they studied how 500 users exposed to display ads and other traditional digital formats compared with watching a piece of content from an influencer
AdAge reported on the research and stated that 40 percent of respondents said they’ve purchased an item online after seeing it used by an influencer on Instagram, Twitter, Vine or YouTube. Also, 20 percent of respondents said they shared something they saw from an influencer, while one-third of millennials say they follow a creator on Twitter or Vine.
Think With Google recently published an infographic about the fact that YouTube Creators are more influential than celebrities. 70 percent of teen YouTube subscribers stated in research that they relate to creators versus celebrities. And 6 in 10 YouTube subscribers follow advice on what to buy from creators versus a favourite TV or movie personality.
Asking my teenage YouTube fanatic daughter, she commented that YouTube creators are more influential on her purchasing decisions as they are more relatable and connect with her as they comment and reply to followers versus celebrities. In addition, as they are of the same age demographic as the viewers, she remarked that they can provide more personalised advice and guidance.
So it is no wonder that brands are working with social media influencers.
Examples Where Brands Have Failed To Comply With Guidelines On Social Media Disclosures
Over recent years there have been many examples where brands have not complied with guidance for social media disclosures in the US and the US. Below are a summary of some notable cases. Clearly this has also affected the reputation of the brand online which you wil quickly find when doing certain searches online.
Lord & Taylor
In March 2015 retailer Lord & Taylor blitzed into feeds by partnering with 50 influential fashion bloggers on Instagram and having each pose wearing the same dress. The dress itself sold out by the end of the weekend, but luckily for the brand, it had a larger AdWeek referenced the lack of disclosure on the posts at the time in an article – though if you now go back to the social media posts, you will see they all have the hashtag #ad on them.
The FTC reported:
Over the same weekend in March 2015, Lord & Taylor gave 50 select fashion influencers a free Paisley Asymmetrical Dress and paid them between $1,000 and $4,000 each to post a photo of themselves wearing it on Instagram or another social media site. While the influencers could style the dress any way they chose, Lord & Taylor contractually obligated them to use the “@lordandtaylor” Instagram user designation and the hashtag “#DesignLab” in the caption of the photo they posted. The company also pre-approved each proposed post.
In addition, the FTC’s complaint charges that Lord & Taylor did not require the influencers to disclose that the company had compensated them to post the photo, and none of the posts included such a disclosure. In total, the influencers’ posts reached 11.4 million individual Instagram users over just two days, led to 328,000 brand engagements with Lord & Taylor’s own Instagram handle, and the dress quickly sold out.
The FTC commented that Lord & Taylor needed to be straight with consumers in its online marketing campaigns and that consumers have the right to know when they’re looking at paid advertising.
In the FTC blog post about the Lord & Taylor complaint they comment that while the company used hashtags “Lord & Taylor was curiously silent about other key aspects of the campaign. For example, according to the FTC, Lord & Taylor’s contract didn’t require the influencers to disclose that Lord & Taylor had paid them. Furthermore, none of the Instagram posts Lord & Taylor approved included a disclosure that the influencer had received the dress for free, that she had been compensated for the post, or that the post was a part of a Lord & Taylor ad campaign. And as the complaint alleges, Lord & Taylor didn’t add a disclosure to that effect to any of the influencers’ posts it reviewed.”
The Instagram campaign reached 11.4 million individual users, resulting in 328,000 brand engagements – likes, comments, reposts, etc. – with Lord & Taylor’s Instagram handle. And the paisley dress sold out.
There are a number of FTC articles about this case probably demonstrating that they are taking a stict look at enforcement:
The press release about the case
The FTC agreement – note this is PDF
The associated documents relating to the complaint.
Deutsch LA Advertising Agency
Employee social media advocacy must also be compliant – The FTC came to a settlement in 2014 over an allegedly deceptive Twitter campaign from 2012 by ad agency Deutsch LA. The FTC stated Deutsch employees tweeted about the launch of a gaming device for then-client Sony without disclosing their connection.
Cole Haan
Cole Haan posted the “Wandering Sole” Pinterest contest that asked users to pin/re-pin images of Cole Haan products in exchange for a chance to win a $1,000 shopping spree. The FTC stated that they believe that participants’ pins featuring Cole Haan products were endorsements of the Cole Haan products, and the fact that the pins were incentivised by the opportunity to win a $1000 shopping spree would not reasonably be expected by consumers who saw the pins. The FTC commented in this case (PDF):
Upon review of this matter, we have determined not to recommend enforcement action at this time. We considered a number of factors in reaching this decision. First, we have not previously publicly addressed whether entry into a contest is a form of material connection, nor have we explicitly addressed whether a pin on Pinterest may constitute an endorsement. Second, the contest ran for a limited length of time and drew a relatively small number of contestants. Finally, Cole Haan has since adopted a social media policy that adequately addresses our concerns. The FTC staff expects that Cole Haan will take reasonable steps to monitor social media influencers’ compliance with the obligation to disclose material connections when endorsing its products.
Warner Bros
Earlier this year The Federal Trade Commission reached a settlement with Warner Bros. over claims that the publisher failed to disclose that it had paid prominent YouTubers for positive coverage of one of its video games “Middle Earth: Shadow of Mordor” without announcing that money had changed hands.
According to the complaint, during the campaign, Warner Bros., through its advertising agency, hired online influencers to develop sponsored gameplay videos and post them on YouTube. Warner Bros. also told the influencers to promote the videos on Twitter and Facebook, generating millions of views. Warner Bros. paid each influencer from hundreds to tens of thousands of dollars, gave them a free advance-release version of the game, and told them how to promote it, according to the complaint. The FTC contends that Warner Bros. required the influencers to promote the game in a positive way and not to disclose any bugs or glitches they found.
While the videos were sponsored content – essentially ads for Shadow of Mordor – the FTC alleges that Warner Bros. failed to require the paid influencers to adequately disclose this fact. The FTC also alleges that Warner Bros. did not instruct the influencers to include sponsorship disclosures clearly and conspicuously in the video itself where consumers were likely to see or hear them.
Instead, according to the complaint, Warner Bros. instructed influencers to place the disclosures in the description box appearing below the video. Because Warner Bros. also required other information to be placed in that box, the vast majority of sponsorship disclosures appeared “below the fold,” visible only if consumers clicked on the “Show More” button in the description box. In addition, when influencers posted YouTube videos on Facebook or Twitter, the posting did not include the “Show More” button, making it even less likely that consumers would see the sponsorship disclosures. See an example in this video where you have to click ‘show more’ to see the disclosure.
The complaint also alleges that in some cases, the influencers disclosed only that they had received early access to Shadow of Mordor, but failed to disclose that Warner Bros. also had paid them to promote the game.
The FTC also alleges that the Warner Bros.’ contracts with influencers subjected their videos to pre-approval, and that on at least one occasion Warner Bros. reviewed and approved an influencer video that lacked adequate sponsorship disclosure.
The proposed order settling the FTC’s charges prohibits Warner Bros. from misrepresenting that any gameplay videos disseminated as part of a marketing campaign are independent opinions or the experiences of impartial video game enthusiasts. Further, it requires the company to clearly and conspicuously disclose any material connection between Warner Bros. and any influencer or endorser promoting its products.
Finally, the order specifies the minimum steps that Warner Bros., or any entity it hires to conduct an influencer campaign, must take to ensure that future campaigns comply with the terms of the order. These steps include educating influencers regarding sponsorship disclosures, monitoring sponsored influencer videos for compliance, and, under certain circumstances, terminating or withholding payment from influencers or ad agencies for non-compliance.
You can read the FTC decision here (PDF).
Machinima Inc
In the case of Machinima, the company paid two YouTube gaming personalities between $15,000 and $30,000 to produce videos promoting Xbox One and specific games. The videos received hundreds of thousands of views on YouTube. The payments or the promotional nature of the videos were not disclosed to viewers.
In the final order from the FTC published earlier this year, they state that according to the FTC’s complaint, announced in September 2015, the California-based online entertainment network engaged in deceptive advertising by paying influencers to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima failed to adequately disclose that they were being paid for their seemingly objective opinions, the complaint alleges.
The final order settling the complaint prohibits Machinima from misrepresenting in any influencer campaign that the endorser is an independent user of the product or service being promoted. Among other things, it also requires Machinima to ensure that all of its influencers are aware of their responsibility to make required disclosures, requires Machinima to monitor its influencers’ representations and disclosures, and prohibits Machinima from compensating influencers who make misrepresentations or fail to make the required disclosures.
Diclegis
In 2015 a pregnant Kim Kardashian endorsed a morning sickness pill called Diclegis posting an image of herself wielding a pill bottle on Instagram with a statement that said:
OMG. Have you heard about this? As you guys know my #morningsickness has been pretty bad. I tried changing things about my lifestyle, including my diet, but nothing helped, so I talked to my doctor. He prescribed me #Diclegis, I felt a lot better and most importantly, it’s been studied and there was no increased risk to the baby.
The FDA issued a letter to the drug maker, complaining that Kardashian’s social media posts failed to mention any risks associated with the medicine. Read the complaint here (PDF).
Oreo Mondelez UK
In 2014 he United Kingdom’s advertising watchdog, the Advertising Standards Authority, challenged the disclosures on branded YouTube content. The self-regulatory body issued a ruling against Mondelez, which paid five popular U.K YouTubers to promote its Oreo brand. Millions of viewers watched the YouTube stars videos about Oreo, but not all of them understood they were watching advertisements.
Each creator referred at some point to a relationship with Oreo, both in the videos and accompanying text descriptions. But statements like “thanks to Oreo for making this video possible” were deemed not to be sufficient disclosures, according to the ASA, which was prompted to investigate the campaign by a BBC journalist. The videos have since been amended to include a clearer statement, “This is a paid for advertisement,” as a video annotation overlay and in the descriptions.
The ASA ruling, the first to mention YouTube stated the ads must not appear again in their current form and that future ads must make their commercial intent clear prior to consumer engagement i.e. labeling that communicates whether content is an ad before potential viewers click play.
The ruling states “Because the statements did not fully establish the commercial intent of the videos, and because no disclosures were made before consumer engagement with the material, we concluded that the ads were not obviously identifiable as marketing communications.”
Mars Snickers
Back in 2012 in the UK, a campaign by Snickers paying Katie Price and Rio Ferdinand to tweet about the chocolate bar was investigated and subsequently cleared of breaking UK advertising rules, in the first ruling by the ad watchdog involving marketing on Twitter. Mars, the parent company of Snickers, paid the celebrities to make five tweets.
A representative of the OFT stated that “The integrity of information published online is crucial so that people can make informed decisions on how to spend their money. We expect online advertising and marketing campaigns to be transparent so consumers can clearly tell when blogs, posts and microblogs have been published in return for payment or payment in kind. We expect this to include promotions for products and services as well as editorial content.”
Handpicked Media
Back in 2010 in the UK the Office of fair Trading opened and investigation on its own initiative to investigate the engagement by Handpicked Media of bloggers on a commercial basis. The OFT was concerned that individuals engaged by Handpicked Media were publishing online content which promoted the activities of Handpicked Media’s clients, without sufficient disclosures in place to make it clearly identifiable to consumers that the promotions had been paid for. This included publication on website blogs and Twitter.
As a result of its investigation, the OFT formed the view that Handpicked Media may be operating in breach of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The Undertakings required that Handpicked Media does not continue or repeat the conduct of concern in this case. For example, they prohibit any future promotion that does not clearly identify, in a manner prominently displayed with the editorial content such that it would be unavoidable to the average consumer, that the promotion has been paid for or otherwise remunerated.
Social Chain
On the 11 August 2016 the UK’s primary competition and consumer authority it was reported that the CMA has secured undertakings from a social media marketing company and a clothing retailer to prevent misleading online practices. Social Chain Ltd is a UK-based marketing company that arranges advertising for businesses through social media and have as a result of the enforcement have agreed not to post or arrange undisclosed advertising.
The CMA’s investigation found that Social Chain used its own social media accounts, and arranged for widely followed social media personalities, to promote films, games and takeaway and dating apps, without readers being informed that the content was paid-for advertising.
Social Chain accepted that the adverts, which were posted on Twitter, YouTube and Instagram, may have been difficult for readers to distinguish from other posts. Social chain has agreed that it will ensure that all advertising twill be clearly labelled or identified so that it is distinguishable from other content found on social media.
The report states that between March and July 2015, 19 marketing campaigns that Social Chain arranged involved undisclosed advertising. These promotions appeared on social media accounts with a combined reach of around 4 million followers. Social Chain’s activities also helped to ensure that some of these campaigns trended on Twitter, which may have increased their readership further.
The CMA also wrote to 15 businesses, on whose behalf Social Chain acted, and the 43 social media personalities who published content for Social Chain to warn them that arranging or publishing advertising that is not clearly labelled may result in them breaching consumer protection law.
In the release about the enforcement, Nisha Arora, CMA Senior Director for Consumer Enforcement, said:
Social media personalities can have an important influence on people’s views, especially young people. It is therefore crucial that when people decide what to buy, they should not be misled by adverts on social media that read like independent opinions. Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such.
Online Endorsements In The UK
In 2015 in the UK, the Committee of Advertising Practice (CAP) published guidance for vloggers to help them better understand how and when the advertising rules apply to their vlogs so that they are upfront and deal fairly with their followers.
The new guidance comes in response to calls for greater clarity from vloggers about when material in vlogs becomes advertising and how they can make that clear. It follows a ruling last year in which several vlogs (where there was a commercial relationship between the advertiser and the vloggers) were found to be misleading because they did not make clear before consumers engaged with the material that they were ads.
The advertising rules, which apply across media including online and to social media channels, state that ads must be obviously identifiable as such. If a vlogger is paid to promote a product or service and an advertiser controls the message then it becomes an ad. When that happens, like all advertisers, vloggers must be upfront and clearly signpost that they’re advertising.
On 4 April 2016, the CMA in the UK published an open letter to publishers and bloggers about online endorsements and reviews.
In it they comment:
Online publishers and bloggers should make sure that, if they are paid (whether financially or otherwise) to feature products in the content on their sites, then the paid promotions are clearly labelled or identifiable as paid-for content.
This is more than just a question of good practice: consumer protection law does not allow for the use of editorial content in the media to promote a product where a trader has paid for the promotion, unless this has been made clear to the consumer.
Blogs, videos and other online publications influence people’s buying decisions. While paid-for editorial content is perfectly legal, it is important that you are open and honest about it with your audience, so that they do not think they are getting independent information when a business has in fact paid to influence the content.
Misleading readers or viewers may not only damage your reputation – it also falls foul of consumer protection law and could result in enforcement by either the CMA or Trading Standards Services, which could lead to civil and/or criminal action.
Find more details on the guidance in this article.
The scenarios covered in the guidance are:
Online marketing by a brand – where a brand collaborates with a vlogger and makes a vlog about the brand and/or its products and shares it on its own social media channels
“Advertorial” vlogs – a whole video is in the usual style of the vlogger but the content is controlled by the brand and the vlogger has been paid
Commercial breaks within vlogs – where most of the vlog is editorial material but there’s also a specific section dedicated to the promotion of a product
Product placement – independent editorial content that also features a commercial message
Vlogger’s video about their own product – the sole content of a vlog is a promotion of the vlogger’s own merchandise
Editorial video referring to a vlogger’s products – a vlogger promotes their own product within a broader editorial piece
Sponsorship – a brand sponsors a vlogger to create a video but has no control of the content
Free items – a brand sends a vlogger items for free without any control of the content of the vlog.
The Competition and Markets Authority in the UK has since published a 60 second summary for endorsements in terms of being open and honest with your audience which you can access here (PDF).
You can read an open letter published by the CMA on 11 August 2016 (pdf) to marketing departments and agencies in relation to social media endorsements.
How Much Are Social Media Influencers Paid?
It is reported that in Ireland that social media influencers can be paid up to €3,000 per Instagram photo.
For more examples in Australia and the US read this article.
As an aside, you might be interested in learning how much influencers in the US may charge – in this article by one social media executive reveals:
We used to pay $800 for 30 or 40 edited images back in 2014. So add the cost of the product, and it would be like $2,500 to shoot and have content for a few weeks. Now, if you work with some big YouTube guys, the Casey Neistats, those types of people charge $300,000 to $500,000, and brands don’t actually own the rights to it.
My hope is that this article will bet you as a marketer to start to think about your influencer marketing campaigns and re-evaluate if they comply with the guidelines in your market or the countries you are implementing the campaign in.
In future articles I will be covering some best practice tips for influencer marketing and exploring the recent changes to guidelines for influencer marketing in Ireland.
If you have questions about influencer marketing campaigns you can schedule a confidential conversation with me here.
Article last updated on 12 August 2016.
