CMA and CAP issue stronger joint guidance on influencer marketing

What can we learn from the new edition of the joint CAP and CMA “Influencers guide to making clear that ads are ads”?

The question

What can we learn from the new edition of the joint CAP and CMA “Influencers guide to making clear that ads are ads”?

The key takeaway

It is clear that influencer marketing remains firmly on the regulators’ radars for 2023 and beyond. In this new iteration of the joint guidance, brands and agencies, as well as influencers, are reminded of the advertising disclosure obligations. Whilst the updated guidance is not substantively ground-breaking, it represents a concerted effort by the Committee of Advertising Practice (CAP) and the Competition Markets Authority (CMA) to make it absolutely crystal clear both when the requirement to disclose arises (including clarification as to who/what constitutes an “influencer”) and how to make such a disclosure when the requirement is triggered.

The background

CAP and the CMA first published joint guidance in 2018 to help social media influencers understand their obligations when posting content online which advertises a brand, product or service. Since then, CAP and the CMA each have produced further guidance to keep up with changes in industry practice and to better engage with influencers. However, influencers are still consistently falling foul of the advertising rules and despite the existing body of guidance and the steady stream of upheld rulings handed down by the Advertising Standards Authority (ASA), it feels like influencers are either not aware of, or simply not following, the rules.

In previous Snapshots we have commented on recent key influencer ASA rulings against the likes of MailOnline, Laura Whitmore and Binky Felstead, as well as the three-part set of guidance published in November 2022 to support influencers, advertisers and social media platforms with complying with consumer protection law and protecting consumers from hidden ads. In this Snapshot we look at the new joint CAP and CMA guidance, which landed at the end of March 2023.

The development

The updated guidance has a marked change in tone and language, which makes it more reader-friendly compared to its predecessor. It is clear that CAP and the CMA are aiming to ensure that all influencers, including those perhaps without agency representation or ready-access to legal advice, understand what they need to do to comply with the advertising disclosure rules.

In case there was any doubt previously, the guidance now confirms that all of the following fall within the definition of “influencer”: “any human, animal or virtually produced persona that is active on any online social media platform”, regardless of any label that they or any platforms use to describe them (eg “content creator”, “celebrity” etc). Pets on Instagram, be warned – the rules apply to you too.

The guidance explicitly confirms some specific situations where a disclosure requirement arises:

• where an influencer is not receiving money directly from a post, but the post includes a discount code or affiliate link allowing the influencer to receive commission
• (following in the footsteps of the CMA’s November 2022 guidance) where an influencer has received a gift with no obligation to post about it, but the influencer does opt to feature it in their content, and
• where an influencer is promoting their own business/product or that of a friend or family member.

CAP and the CMA have also updated their list of acceptable and unacceptable disclosure labels. In the previous edition, the guidance stated that the usual “ad” label could be used with or without a hashtag. Now it is clear that omitting the hashtag will only be acceptable if the “ad” label is clearly prominent from the rest of the text in the caption or post.

The new guidance also removes the list of labels marked as “usually recommend staying away from” and strengthens the position by stating examples of labels they explicitly “advise against using”. This stronger approach is also seen in the decision tree towards the end of the guidance. This has been updated to be more direct as to when a post needs to be disclosed as (eg “your content is advertising and needs to disclose that upfront” has become “you need to label it”).

Why is this important?

The ASA, CAP and the CMA are doubling-down on their approach to influencer marketing. The string of upheld influencer marketing ASA rulings in the last few years have seen brands and influencers attempting to run a couple of typical defences (lack of awareness of the requirement and/or that it was obvious that the post was an ad even without a disclosure). The regulators are clearly fed up with this line of argument, and this new guidance feels like a last-ditch attempt to make the rules so clear and simple that there is no place left for influencers to hide when it comes to disclosures.

What this means for the future of enforcement activity in relation to influencer marketing, given the CMA is on the verge of receiving harsher direct enforcement powers for breaches of consumer protection laws under the forthcoming Digital Markets, Competition and Consumers Bill, remains to be seen.

Any practical tips?

As always, influencers should take a maximum-transparency approach to creating and publishing marketing or promotional content. However, now more than ever, advertisers using influencers should also be taking a proactive approach to disclosure compliance, and include strict requirements on its influencers to ensure they make the necessary disclosures. For now, it is clear, the safest approach for disclosing ads within influencer marketing content is to clearly include #ad and to avoid any other labels that have not been endorsed by the ASA, CAP or the CMA.

Summer 2023