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Influencers in firing line

Watchdog targets celebrities over social media earnings

Kylie JennerCelebrities who promote products on social media are being investigated by the competition watchdog amid concern that they are failing to declare their earnings from such sources.

The Competition and Markets Authority (CMA) says that online endorsements from celebrities and influencers can help brands target large audiences and boost sales, but are concerned that these promotions can mislead consumers.

The CMA has contacted a number of celebrities whom it claims have the power to “sway the shopping habits of millions”. Some influencers make tens of thousands of pounds for a single post on social media sites such as Instagram as they are particularly persuasive among the young who do not engage with traditional advertising in the same way as older generations.

The watchdog has asked for information about the deals from an undisclosed list of celebrities who promote certain brands.

It says: “Where influencers are paid or rewarded to promote, review or talk about a product in their social media feeds, consumer protection law requires that this must be made clear.

“If they do not label their posts properly, fans or followers may be led to believe that an endorsement represents the star’s own view, rather than a paid-for promotion.”

Influencers using social media sites typically use the hashtag #ad to indicate when they have been paid to post about a product.

The CMA says the existence of a commercial relationship must be immediately clear to those viewing the post, indicating that the hashtag may not be enough.

Several stars have faced action from the Advertising Standards Authority over paid-for posts which were not properly labelled.

An ad for Britivic’s J20 appearing on Made in Chelsea star Millie Mackintosh’s Instagram account was banned by the ASA in 2015 while Celebrity Big Brother contestant Stephanie Davis had her post featuring a vitamin company was banned earlier this year.

With more than 108 million followers, Kylie Jenner (pictured) is regarded as the most valuable influencer on social media. Posts on Instagram, Twitter and Snapchat by the youngest member of the Kardashian clan are worth the equivalent of $1 million of traditional ad spending. There is no suggestion that she is among those being investigated by the CMA.

George Lusty, the CMA’s senior director for consumer protection, said: “Social media stars can have a big influence on what their followers do and buy.

“If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it.

“So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”

 



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