Brands reluctant to be transparent about influencers as many fail to apply ad industry code

According to current CAP guidelines, if influencers are being paid to showcase a product or service, they have to clearly signpost this, with non-disclosure of paid commercial content considered illegal under Consumer Protection law. Earlier this week, the Competition and Markets Authority announced it would be stepping up its enforcement action in this area.

However, the survey – conducted by Takumi, an app that connects Instagram influencers with brands, which surveyed 500 PR and marketing professionals – showed that 12% had no idea what the CAP code of conduct towards influencer marketing is. Of those that were familiar with the recommendations, over a third (34.7%) actively choose not to adhere to it due to a lack of understanding or a reluctance to be transparent about paid-for content.

Smaller brands, meanwhile, are more inclined to ditch signposting in their influencer marketing campaigns, with 50% of those working in businesses of 50-100 employees openly admitting that they don’t fully comply with the CAP guidelines when working with influencers. For large brands with over 500 employees, this drops to one in five (20%).

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The study also found that just 37% of PR and marketing professionals fully adhere to the overall CAP guidelines, which advise on how to advertise and promote products to consumers.

Mats Stigzelius, co-founder of Takumi, says the survey highlights a knowledge gap, showing that the industry is failing to get to grips with the relatively new practice of brands utilising bloggers or popular social media influencers such as Zoella within their marketing.

He says: “Influencer marketing is a relatively new practice, and brands and marketers are still adjusting to it like they did with social media not too long ago. The industry has only scratched the surface of the potential that influencer marketing holds but for brands to develop campaigns and make them more effective there needs to be more clarity around the rules of engagement.”

Besides it being illegal to not disclose paid commercial content, brands also run the risk of damaging their reputation.

“Whether it’s a vlog, blog or Instagram post, it needs to be clearly signposted,” explains Sarah Mawson, head of celebrity at Celebrity Intelligence. “Consumers are generally understanding of these types of posts – they know bloggers are just doing their job and it builds trust as they know exactly what’s going on.”

In response to the survey, the ASA says it working hard to increase awareness and has a word of warning for brands thinking of not applying the rules.

An ASA spokesperson told Marketing Week: “ASA and CAP have undertaken lots of work over the last two years to engage with, raise awareness amongst and provide advice and training to marketers, PRs, brands, agencies and those ‘influencers’, including vloggers, bloggers and other content creators who they’re entering into commercial relationships with, on how to stick to the advertising rules. Our work in this area is ongoing and we encourage anyone who is unsure of how and when the rules apply to get in touch.

“We take a dim view of marketers who admit to ignoring the ad rules. Not only do they risk having their ad banned and the resulting negative publicity and damage to their brand, they could land in hot water with the Competition and Markets Authority for potentially breaking the law.”