A group of high-profile celebrity influencers celebrities have agreed to more clearly state when they have been paid or received free gifts to promote products online.
Singers Ellie Goulding and Rita Ora and reality TVs stars Millie Mackintosh and Megan McKenna are among 16 celebrities who have made a formal commitment to the Competition and Markets Authority (CMA) to be more transparent over their endorsement deals when posting to social media.
The celebrities named by the CMA are:
Pop star Rita Ora
Actress Michelle Keegan
Singer Ellie Goulding
Writer and model Alexa Chung
Designer and model Rosie Huntington-Whiteley
Video blogger Zoe Sugg (who vlogs under the name Zoella)
Mario Falcone from The Only Way Is Essex
Alexandra ‘Binky’ Felstead from Made In Chelsea
Holly Hagan from Geordie Shore
Model Iskra Lawrence
Camilla ‘Milly’ Macintosh from Made In Chelsea
Reality TV personality Megan McKenna
Chloe Sims from The Only Way Is Essex
Louise Thompson from Made In Chelsea
Fashion video blogger James Chapman (who vlogs as Jim Chapman)
Fashion blogger Dina Torkia
The move comes amid a crackdown by the CMA on influencers endorsing products without disclosing financial rewards.
The CMA warned unmarked adverts on social media can be misleading and could breach consumer protection law.
All 16 of the celebrities named by the CMA were being investigated because they may have broken the rules repeatedly.
By agreeing to change their ways they have avoided court action, which could have led to unlimited fines or even up to two years in jail.
Officially, no ruling was made on whether the stars broke the rules, because they were not taken to court this time.
But the CMA says its investigation is not finished. It has sent warning letters to more influencers, and is going to investigate the social networks too.
CMA chief executive Andrea Coscelli said: “People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy.
“You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on.”
It did not say whether the 16 named influencers had breached consumer law, but said they had all volunteered to make changes to their practices.
Simon Jupp, associate at Taylor Wessing, said: “It is not surprising that a number of influencers have agreed to change the way they post on social media platforms following an investigation by the CMA. This is something many influencers have been getting away with for some time.”
Last week the ASA said it has cautioned hundreds of influencers over the last few years for breaking transparency guidelines about sponsored content, Sky News reported.
The regulator last year banned an Instagram post by Made in Chelsea star Louise Thompson, saying she had failed to identify it as a promotion for a watch brand.
Usually when celebrities post an advert without being clear they were paid to do so, it’s the Advertising Standards Authority (ASA) that takes action if a complaint is made. But while the ASA takes action against individual advertisements or campaigns, the Competition and Markets Authority (CMA) can take action against people.
Social media platforms including Instagram already have built-in tools, such as the paid-partnership tool, which make it clear that a post is an advertorial.
The practice of endorsing products, from clothes to cars, hotels to holidays, is widespread among so-called social media influencers who can earn tens of thousands of pounds from companies for a single post on sites such as Instagram.
The risk is that consumers will place more trust in a product that has been recommended by someone they admire on social media.
Some celebrities do use hashtags such as #ad or #sponsored to indicate that they have been paid to post content.
The CMA has published a video outlining the guidelines for sponsored social media posts (see below).
What are the rules?
- influencers must clearly label content that has been paid-for or for which they have received gifts or loans. #ad or #sponsored are examples, and must now be prominently displayed at the beginning of the post, rather than buried away among other hashtags
- even gifts that are made without a requirement to post about them afterwards must be declared if they appear in social media content. #freebie is suggested as a label
- it is no longer enough for influencers to declare the companies they work for in their profile. Each post must be treated in isolation and all paid-content or commercial relationships declared
- if an influencer is engaged in various commercial relationships related to an individual post, each one must be declare
Influencer marketing has come under scrutiny after a recent report revealed brands could be wasting millions of pounds paying celebrities to promote their products.
The report by Captiv8 revealed more than 11 per cent of engagement on sponsored posts comes from fraudulent accounts.
The CMA has also published a quick guide for social media influencers, marketing companies, agents and brands to ensure they are aware of their obligations under consumer protection law. This is in addition to the joint guidance issued with the Committee of Advertising Practice (CAP) “An Influencer’s Guide to making clear that ads are ads” published in September 2018.
More information can be found on the CMA’s social media endorsements page