British Celebrities Want to be More Transparent about Endorsements on Social Media. What Does that Mean for Brands?

Over a dozen UK-based celebrities have come out in support of new rules to be more transparent about social media endorsements, British media recently reported. Among these influencers are A-listers such as Rosie Huntington-Whiteley, Rita Ora, and Ellie Goulding, who agreed to indicate when a post on their account is sponsored by a business. The new guidelines are advocated by the Competition and Markets Authority (CMA) in the UK, and present a remarkable turn of events for native advertising and product promotion.

The End of the Influencer Era?

Becoming an “influencer” on Facebook or Instagram has created new careers. It has also given brands, especially small ones, the opportunity to reach potential consumers without spending money on intrusive ads. Influencer product promotion is a combination of native advertising and celebrity endorsements, which have deep roots in traditional advertising.

Many a social media company has invested deeply in influencer marketing to get products directly in front of customers on sites like Facebook and Instagram. The practise has not been without controversy. Criticism has largely centred on the fact that celebrities peddle products too surreptitiously for consumers to understand which advertisements are. Influencer marketing is controversial for the same reason it’s appealing.

Consumer advocacy groups have long lobbied for more transparency in celebrity sponsorships on Instagram and Facebook. Advocates say that influencers pretending to use sponsored content deceives users. Now, regulatory authorities have finally begun to listen to the pleas.

Legality of Native Advertising and Sponsored Content

Regulatory authorities don’t particularly have laws per se regarding native advertising or influencer marketing. The Federal Trade Commission in the US has transparency guidelines for native advertising content that appear on social network feeds. These guidelines may apply to influencer marketing as well, forcing influencers to clearly identify content that are paid for by an advertiser.

The CMA’s recent move isn’t a regulatory crackdown. The agency has not characterised influencers who fail to disclose sponsorships has law breakers necessarily. However, the CMA did warn that influencers who fail to disclose sponsorships could potentially be violating consumer law in Britain. The agency named over a dozen influencers in violation of the new rules.

Following the CMA’s announcement, 16 named influencer celebrities voluntarily offered to identify sponsored content on their Facebook and Instagram feeds.  Once the CMA has raised concerns about possible deception of consumers, those who ignore the warnings could face lawsuits and heavy fines.

The influencer debacle comes in the wake of wider awareness on the parts of consumers regarding privacy and rights online. Aggressive marketing risk violating privacy laws, especially in the wake of Facebook and other data breach scandals. Misleading advertisements are not much different from fake news on Facebook feeds, in that both dupe consumers.

How to Do Influencer Marketing in the Post-Truth Age

Brands should expect the latest CMA move as a first in a string of future efforts to make online marketing more transparent, especially on sites like Facebook. Consumer and investor confidence of platforms like Facebook are at an all-time low thanks to the spread of misinformation. While people continue to engage on social networking websites, they may do less than before. More importantly, consumers would expect more honesty from advertisers in the future.

None of these concerns indicate that influencer marketing is dead. Rather, marketers should pay attention to what the consumers want. Influencer marketing has been a great tool to seamlessly integrate products and increase exposure without consumers realising they were seeing ads. Now, consumers want to distinguish between sponsorships and natural endorsements.

Marketers who are willing to address transparency concerns can certainly move forward with influencer marketing. Don’t assume that an endorsement being identified as such would lead to fewer clicks or conversions. Rather, brands should identify influencers that can reach best reach the target audience. Followers on these feeds would be exposed to your product even if it’s identified as a sponsored product.

Marketers might want to scale down influencer budgets to focus on those who can bring in the clicks. Aim for quality over quantity. Transparency rules are already in effect for most content on sites like YouTube. And these efforts do garner results. As long as the audience is right, the message would reach the intended target.

In summary, marketers should not panic about transparency rules that affect influencer marketing. In fact, expect more such rules to affect platforms like Facebook and Twitter in the future. It’s best to hire professional help to come up with strategies to reach your intended audience and identify the best influencers for your brand.

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