Commentary

UK Regulator Warns Influencers On Social Media Ads

Close on the heels of the U.S. Federal Trade Commission’s moves to tighten standards governing consumer disclosures for social media influencer campaigns, the regulator’s British counterpart is cracking down on advertisers and influencers who endorse products on social media without disclosing that they are in fact paid promotions, according to the Financial Times, which first reported the news.

The UK government’s Competition and Markets Authority is targeting one social media influencer network in particular, Social Chain, which has been ordered to halt all undisclosed advertising following its failure to disclose paid social media endorsements in 19 campaigns for products and services including movies, games, food and dating apps. The promotions appeared on social media platforms including Twitter, YouTube and Instagram during a four-month period of 2015.

The CMA has also issued warnings to 15 advertisers and 43 social media influencers, many of them celebrities, who participated in campaigns facilitated by Social Chain without disclosing that they were paid to do so. Altogether the influencers reached an audience of around four million followers, and the CMA noted that some of the campaigns began trending on Twitter, giving them even more visibility.

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Currently the CMA isn’t revealing which advertisers and social media influencers were involved, merely that they were working with Social Chain, although consumer advocates are pressing the regulator to publish the names.

Nisha Arora, director of the office of fair trading at the CMA, stated: “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.”

As previously reported, the U.S. FTC is tightening the rules for marketers working with social media influencers regarding consumer disclosures. Among other thing the new, stricter rules dictate that brief disclosures like “#ad,” “#sp,” “#spon,” and “#sponsored” will no longer be sufficient in many cases, principally because consumers are unlikely to notice them and understand their meaning.

Much of their acceptability depends on how prominently they are displayed: thus “#ad” may be acceptable by itself if it comes first in the post before all other content, but not at the end. By the same token, truncated or abbreviated disclosures like “#sp” and “#spon” aren’t acceptable by themselves, regardless of position, because consumers can’t reasonably be expected to know what they’re supposed to stand for.

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