Social Media Influencers: Reining Them In

Panelists in a session yesterday told registrants how brands can work with their brand advocates to promote products without falling foul of advertising regulations.

In IT01  Industry Breakout: Beyond #Ad—Guidelines and Guardrails for Working with Social Influencers and Brand Advocates, attorneys gave advice on best practice in this area.

Famous influencers include the Kardashians, a celebrity family who are known for endorsing products on social media sites such as Instagram.

The discussion focused on how to steer clear of breaching advertising regulations when engaging third parties to advocate for a brand on social media. The panel showed examples of advertising authorities in the United States and United Kingdom investigating, and in some cases sanctioning, brand owners for not clarifying the nature of paid-for promotions.

In the United States, this area is primarily governed by the Federal Trade Commission (FTC), while across the Atlantic there are several bodies, including the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA).

According to Adrian Smith (Simmons & Simmons LLP, UK), the ASA’s work does not amount to “complete enforcement” because there is merely an expectation that its rulings are followed, but there is an almost universal acceptance of its findings, he said.

The CMA has a wider remit, dealing with issues including mergers and acquisitions, but it does also cover consumer protection and competition regulations.

“Occasionally the CMA does get involved in taking advertisers to task,” Mr. Smith said, usually when it’s not sufficiently clear whether an advert has been sponsored.

In the United States, the FTC is trying to regulate “just about anyone,” said Staci Riordan (Nixon Peabody LLP, United States), with brands, advertising agencies and influencers all falling under the agency’s watch.

In April this year, the FTC sent “reminder letters” to influencers for the first time, said Ms. Riordan, who explained that previously only brands or agencies had been targeted.

The FTC said in a statement that after reviewing numerous Instagram posts by celebrities, athletes, and other influencers, its staff sent out more than 90 letters reminding influencers and marketers that influencers should “clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”

It added that when multiple tags, hashtags, or links are used, “readers may just skip over them, especially when they appear at the end of a long post—meaning that a disclosure placed in such a string is not likely to be conspicuous.”

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Mr. Smith gave examples of two British soccer players, one current and one former, whose promotions prompted investigations by the authorities.

The first case concerned Wayne Rooney, who captains Manchester United and the England national team. In 2012 he tweeted that he wanted to start and finish the year as a “champion,” with his tweet linking to sportswear manufacturer Nike. Mr. Smith said the ASA found that the promotion wasn’t obviously identifiable as being sponsored. As a result, Nike was found to have breached the ASA’s code.

In the second case, involving Rio Ferdinand, a former teammate of Mr. Rooney’s at club and international level, the ASA cleared confectionery maker Mars of any wrongdoing after Mr. Ferdinand posted several “teaser” tweets before posting a picture of himself eating a SNICKERS chocolate bar.

To avoid investigation, Ms. Riordan said, brands should use a hashtag to clarify the nature of sponsored content and this hashtag should ideally be the first one used by the influencer, not buried at the bottom of a chain.

Mr. Smith added that brands should manage the compliance of influencers with company guidelines, as there is “only so far you can sensibly outsource the controls you want …You need to be realistic about how far you can put obligations on the agency or end poster.”

Thomas A. Adams (The Procter & Gamble Company, USA), who also spoke in the session, said companies should do their due diligence and it is important to manage “controversial personalities.”

While a contract with third parties is important to “keep people on the rails,” companies also need a practical plan for when something goes wrong, Mr. Smith concluded.

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