Consequences of Not Disclosing Promotions on Social Media

Kim Kardashian was making headlines earlier this month due to not disclosing promotions on social media. After receiving $250,000 for advertising cryptocurrency EthereumMax on Instagram without disclosure, she has been fined $1.26m.

The US Securities & Exchange Commission (SEC) has ordered her not to promote crypto asset securities for 3 years too. This is not the first time the SEC has brought action again Kim. Kim is not the first celebrity or influencer to be caught out.

The UK is not exempt from this either. A couple of years ago, social media stars vowed to clean up their act as a result of Competition and Markets Authority (CMA) action. Let’s take a look at the UK guidelines, the consequences and authentic examples we have seen of not disclosing promotions on social media.

What Are the UK Governing Bodies for Social Media?

First of all, who are the ones in charge of making and enforcing the rules for disclosing promotions on social media?

• Advertising Standards Authority (ASA) – This is the UK’s advertising regulator. They ensure adverts across the UK media comply with the Ad Codes.
• Committee of Advertising Practice (CAP) – This is who is responsible for writing the Ad Codes. CAP includes members who represent advertisers, media owners and agencies. They take action against misleading, harmful or offensive advertising as well as provide advice and training for businesses.
• Competition & Markets Authority (CMA) – This is the UK’s primary competition and consumer authority. They are an independent non-ministerial government department and take action against practices that may be harming consumers.

What Are the Rules for Disclosing Promotions on Social Media in the UK?

The main rules you need to follow are part of the CAP Code which is enforced by the ASA. Like most guidelines, the CAP code is split up into different sections. However, overall, it applies to most forms of influencer marketing. Consumer protection legislation, enforced by the CMA, also applies to influencer marketing.

In particular, Section 11 in the Consumer Protection from Unfair Trading Regulations 2008 states, “Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).” This is not just considered as unfair, but against the law.

More specifically, other rules you need to follow include:

• Don’t falsely claim or give the impression that you are acting outside your business purposes
• Don’t falsely represent yourself as a consumer
• Don’t fail to identify a commercial intent behind a social media post
• Don’t hide information such as being a brand ambassador for a product you post about

When Do You Need to Disclose Promotions on Social Media?

As an influencer, when a brand gives you payment to promote their products or services or endorse their brand, you need to disclose this. Payment includes money, commission, free loan of the product or service, a free product or service (“gifted”), or any other incentive. In any post where you feature or refer to the brand, product or service, where the content was controlled by the brand or when you post ‘affiliate marketing’, you always need to disclose this.

Affiliate marketing refers to when you promote particular products or services in a social media post using a link or a discount code, so every time someone clicks or uses the code, you get paid. These disclosure rules also apply to when you’re posting about your own products or services, events or competitions or giveaways you’re running.

How Do You Make the Disclosure Clear?

The CAP Code states that promotions should be “obviously identifiable”; consumers shouldn’t have to work to figure out the difference between ads and organic and editorial content. Although sometimes there is no simple way of explaining your relationship with a brand, there are techniques you can use for clear disclosure. At the end of the day, it is your responsibility.

As an absolute minimum, you should include a prominent label such as #Ad, #Advert, #Sponsored or using the ‘Paid Partnership’ tool. These should be upfront, appropriate for the channel and suitable for all devices. Make sure they are clear to see, so people notice before they click or engage.

What Are the Risks of Not Following the Rules?

For brands, their reputation could be significantly damaged if ASA applies sanctions or the media spreads the word of misconduct. If they continually collaborate with influencers who breach the rules, the brand itself comes under fire as well.

For influencers, it is a similar consequence, however a bad reputation also increases their “risk profile”. This means brands are less likely to use them for promotions in the future. The sanctions ASA can apply to both brands and influencers include:

Examples of Influencers Given Warnings

Reality TV stars seem to be the worst offenders of not disclosing promotions on social media. Molly-Mae Hague and Luke Mabbott from Love Island have both made the headlines for going against ASA regulations. One of them was in regard to giveaway rules and one for mislabelling advertorial content.

Some other examples of influencers who have been warned include:

• Louise Thompson, Made in Chelsea: Not making her Daniel Wellington advert obviously identifiable in an Instagram static post.
• Marnie Simpson, Georgie Shore: Not making the advert of her own brand of contact lenses obviously identifiable in a Snapchat snap.
• Millie Mackintosh, Made in Chelsea: Not making her Britvic Soft Drinks advert obviously identifiable in an Instagram video post.

In the latest Influencer Monitoring Report from ASA, it reveals that the proportion of influencers sticking to the rules is far below what is expected. As the rules get stricter, the consequences could get firmer, so may sure you are aware.

At Logic Design, we always keep up to date with social media algorithms and guidelines. Get in touch with us today to find out how we can help you. Visit our contact page, give us a call on 01473 934050 or email us at hello@logicdesign.co.uk.