It’s perfectly legal for “influencers” to be paid for endorsing a brand or product online – via social media, blogs, vlogs or other online sites. But, if someone is paid or incentivised to post a tweet, blog or other content, the content must be labelled appropriately to comply with industry regulations and consumer protection law.
Brands, agencies and influencers all risk sanctions and legal action if they do not comply – as well as damage to their reputation.
Key principles to follow
- Always be open and honest with the audience – never mislead consumers in any way.
- If someone is paid to endorse or reference a brand, the consumer must be told.
- If the brand has any editorial control over the content, that must be made clear.
What counts as payment?
- Payment need not be in cash – if an influencer has any incentive to talk about a product, that counts as a payment.
- Payment includes free products, reciprocal arrangements, payment in kind or any other type of ‘”kickback”.
What counts as editorial control?
A brand is likely to have control over the content if the brand does any of the following:
- Writes the content (or has any approval over it).
- Provides a detailed brief or key message (even if influencers relay it in their own words).
- Restricts an influencer from mentioning competitors.
- Retains ownership of any copyright or other intellectual property in the content.
Who is responsible for compliance?
- Everyone involved in an endorsement is responsible – the brand, agency and influencer.
- Brands and agencies should always give clear instructions to influencers about how their endorsements should be labelled, and make sure they are put into practice.
- Brands and agencies should also implement internal policies, contracts and training processes to spell out legal and regulatory obligations in this area.
What practical steps should be taken?
- The authorities judge each situation on its merits and consider a range of factors when deciding whether a commercial relationship has been made clear.
- Factors include the overall context of the endorsement, the audience’s general level of understanding and the timing of posts (e.g. before a tweet “reveals” a commercial relationship).
- Twitter, Facebook, Instagram etc. all have their own characteristics, and the approach to labelling content should always be considered in light of a platform’s functionality. Generally speaking, using #ad (for advertorial content) and #spon (for sponsored content) prominently in social media posts can be effective ways of making commercial relationships clear to consumers. But they should always be used in an appropriate context, and the correct hashtag should be used to ensure that consumers do not confuse advertorial content for sponsored content.
- Similarly, for blogs, vlogs and other online publications, there are important rules and guidance that should be followed to make sure consumers understand the existence and nature of any commercial relationships.
- As well as a general obligation to be open and honest with consumers, there are also specific rules for certain online marketing activities – such as running competitions or promotions, re‑tweeting or re-posting content, or dealing with customer reviews.
- Finally, any advertorial content (i.e. where a brand or agency retains editorial control) must comply with the whole of the CAP code, the industry code that applies to online advertorials.
This note has been produced for general information purposes only as a high-level summary of UK guidance in this area from the Competition and Markets Authority (CMA) and the Advertising Standards Authority (ASA). It should not be regarded as a substitute for legal advice in individual cases.