Influencer marketing on social media is still a novelty for many compared to more traditional advertising strategies,
although it is true that it is gradually gaining ground in the field of online advertising and marketing at a fairly rapid pace.
However, the novelty of influencer marketing brings with it other not so positive points related, for example, to transparency and influencer fraud. Campaign Deus data saysthat at least 12% of UK influencers buy fake followers. Sometimes marketers are not always aware of these types of issues as they adapt to new influencer-related technologies.
This brings us to why it is so important for specialists to keep a tight control over influencer marketing. Brands
invest heavily in this type of online advertising because an influencer’s followers trust their recommendations and this
can be very beneficial for brands. Hidden advertising by an influencer is a problem for most of the target
audience. When an influencer does not clarify whether their content is paid for, they are violating consumer
protection laws, and not only that, but the reputation of the brand and the influencer can also be damaged if
they face public reactions.
A company’s sales are built on customer trust. When brands build transparent and valuable relationships with the
people they work with, they are seen as more honest. It’s critical for brands to maintain authenticity with their customers, and one of the key points to achieve this is disclosing partnerships or promotions with influencers.
Why is it important to regulate influencer advertising?
More and more people around the world are using social media as the years go by and technology advances. According to
the Social Media Benchmark Report, in 2021, it is estimated that 53% of the world’s population uses social
media, and two million users do so daily. This trend is only growing considering that the new generations are growing up in an environment where the Internet is more than present in their daily lives.
Influencer marketing is more accurate than traditional advertising. In fact, 91% of 16-24 year-olds say influencers motivate them to buy.
With the emergence of younger audiences on social media, brands have also changed their focus and goals. There are a large number of social media influencers with large communities called “macro influencers”. Their posts are viewed and shared by a large audience, which means that these influencers have an established and reliable social network to promote brands’ content. Digital marketers are aware of this reach and what they can achieve through influencers.
1. Show transparency to the user
As the industry grows, so does the conversation around transparency in advertising, whether legal or ethical in nature. According to the Federal Trade Commission’s (FTC) Supporting Guidelines, any “material” involvement between sponsors and advertisers must be clearly disclosed. By material involvement we mean an exchange of a monetary or other nature (such as gifts).
Influencers are completely free to advertise products and services if they make it clear to their audience that it is an advertisement. They should not present it as if it were a personal recommendation. All advertising content or mentions they make must be perfectly identifiable as such for their audience.
The FTC also published “Outreach 101 for social media influencers” in 2019 to reiterate consumer protection . This document guides influencers on how to disclose their ads in posts, stories, and other types of content. A simple “#ad” signage in the caption should suffice. It is in a brand’s best interest to ensure that its influencers are 100% committed to these guidelines.
Below we show some examples of posts by influencers in different countries where they appear indicating that it is advertising and mentioning the brand they work with:
On the contrary, below are a couple of examples of poorly labeled or unlabeled posts that promote a product:
This post published by ainfluencer from MexicoThis is a post without advertising transparency since we do not see anywhere any mention of the brand or any advertising signs such as #publi or #gifted.
This other post that belongs to aBritish profilementions the brand but does not label the post as an advertisement.
2. Tax and labor implications
When an influencer labels a post clearly, making it clear that what gambling data usa they post on their social media is advertising, it reveals that they are being paid and this payment is subject to taxes. Clearly labeled posts make it easier to identify which deals are closed through money and which deals are closed through other types of benefits such as gifts. All of this income should be part of your tax returns.
Depending on the type of contract an influencer has with a brand, the influencer may even be considered an employee of
the brand, for example this happens in annual campaigns or in campaigns where the influencer is considered an
ambassador of the brand. This also has consequences for the tax return. For example, in the United Kingdom, when an
influencer receives a gift from a brand in exchange for their employment relationship,This will be taxed under the
Income Tax (Gains and Pensions) Act 2003.However, if the gift is simply in exchange for an approval, the tax implications may be different.
The era of transparency in digital advertising
Tagging or tagging their content with a hashtag like #publi and adding the brand name is one way influencers are being upfront about their paid collaborations. The 4 key trends in the world of business in 2024disclosure they make about advertising on their social media should be as clear as possible for their followers and hard to miss.
In countries such as the United States, the United Kingdom and LATAM, transparency in advertising is heavily
regulated. Failure to comply with the law is considered a violation of consumer protection.
In the United KingdomThere are laws that regulate influencer marketingThe Competition and Markets
Authority (CMA) has set out strict guidelines that influencers in the country must follow if they receive payments from
brands. They must include hashtags such as “ad”, “advert”, “advertisement”, etc. in advance and avoid terms that are unclear to their audience.
The advertising regulatory body
Spainhas recently published a “Code of Conduct”for influencer advertising, which came into effect as of
January 2021. Influencers in Spain are required to clearly label content that is identified as advertising. When we refer
to “payment” from an influencer, we are referring to any payment, whether direct or indirect, such as gifts, trips, etc.
In the US , the FTC has set guidelines for influencer endorsements. Influencers are required to strictly comply
with the law, and if they fail to do so, they must include an transparency in influencers advertising indication in all their paid posts.
When brands reach out to influencers to share their products or b2b phone list services on their social media channels, it is important to ensure that the influencer is accountable for being transparent in their collaborations with brands.
Even so, the responsibility of reflecting that it is a collaboration with a brand always falls in the hands of the influencer.
According to FTC guidelines, influencers are responsible for properly labeling their content, making it clear to their
audience whether it is advertising or not. This also helps their followers to identify between their own and
commissioned recommendations. Even knowing all this, there is always the possibility that influencers who engage
in covert advertising, especially those with large followings, will be subject to criticism for breaking the law. For the
sake of the influencer’s protection and the image of the brand they work with, it is highly advisable to review both their social media and the content they share on it before starting work.