Traditionally, businesses seeking to market a product would pay for an advert to go in a magazine or on TV. Others may have splashed out on a billboard to try and catch the eye of new customers. But like all areas of business, marketing has changed dramatically over the years. An increasingly popular way for companies of all sizes to publicise their products, is by using influencers on social media.
According to one report, tennis players competing at this week’s Wimbledon are set to earn more from social media than they will on court. Some players with multimillion-strong followings on Instagram are estimated to make up to £128,000 for a single sponsored post.
Stars are expected to cash in because while there are strict rules about players displaying sponsorship on court there are no rules about social media. For businesses, getting a tennis player, TV star or TikTok personality with millions of followers to plug your product on their social media channels can be a surefire way to catch the attention of younger customers.
But it is quickly becoming clear that influencer marketing can also present a risk: both for brand reputation and for the influencer themselves. Earlier this year, one group of social media influencers landed themselves in hot water with the advertising watchdog after failing to disclose that a video they had shared was content they’d been paid to promote.
The Wave House, a group of six TikTok stars in their early 20s who live in a £5 million mansion in Essex, had posted a clip on the video-sharing app to publicise the clothing retailer PrettyLittleThing. A viewer later referred the video, which went out to the Wave House's four million followers, to the Advertising Standards Authority (ASA), saying it was not clear that it was an advert.
Investigators from the ASA said the post should have contained the hashtag '#ad'. 'We considered that there was nothing in the content of the TikTok post...that made clear to consumers that it was an ad,' the ASA judgment concluded. PrettyLittleThing said that their contract with the Wave House stated that all social media posts should be 'obviously identifiable as an ad by using the #ad disclosure.'
The marketing agency Yoke, which manages the Wave House, said the post had been uploaded without the ad label 'due to human error' and they would have rectified it if they had noticed it themselves first. Nevertheless, the ASA still banned the post, imposed a fine and warned the influencers that all its future adverts must be clearly identifiable as 'marketing communications'.
For Wave House, who attracted unwanted media attention, the damage was done. But the new good news for businesses is that help is at hand. Our team of expert solicitors are here to help and advise you on how best to navigate the area of influencer marketing.
Commenting, Sarah Gunton, a commercial partner at Harper James, believes this is unlikely to be an isolated case and underlines the importance of getting legal advice in this area. She stated: 'The ASA objected to the fact that the clip was not labelled as an advertisement,' she said. 'This is unlikely to be a one-off occurrence. Extensive legislation designed to protect consumers is already in existence. This means regulatory authorities are likely to make increasing use of it to ensure that consumers are adequately and appropriately protected in relation to at least the most influential influencers. If your business is promoting its products out in the ‘Wild West’ then you may need sound legal advice to ensure that you do not suffer the consequences of failing to play by the rules.'
Matt Shakesheff, a corporate partner at Harper James, agreed adding: 'My advice to influencers or retailers seeking to have products promoted on social media, is to make sure not only that the contracts between them include a requirement to identify content as advertising but to specifically require this to be made clear to a viewer. This could be placed in the title or the opening part of the content but may potentially require something more than the use of a hashtag. Anyone entering into an agreement of this type would be wise to get expert legal advice first to ensure they don’t fall foul of regulators. Never delve into the world of influencer marketing without a standard influencer agreement, and seek legal advice to completely cover yourself.'
Businesses who perform best in this area use legally binding influencer marketing agreements created with the support of a solicitor. If you have a specific enquiry, or want to know more about influencer marketing agreements, contact one of our commercial solicitors.