#Ads and the ASA – The Who, What, How and Why to disclosing paid for content

by Alexandra Marchant and Amelia Darbro

In the past year, UK lockdowns have led consumers to spend more time on social media than ever before. As brands have struggled to organise traditional advertising, they have increasingly turned to social media influencers to promote their products and services online. However, as influencer marketing continues to dominate the advertising ecosystem, regulatory bodies are taking a more proactive role in monitoring paid-for content to ensure it abides by the UK advertising rules.

Most recently, the Advertising Standards Authority (ASA) published a list of non-compliant social media influencers who consistently fall foul of the advertising rules. This list of offenders reinforces the need for influencers and brands to understand the rules that apply to them, to ensure they avoid the risk of being named and shamed (and subject to further sanctions!).

Who regulates adverts?

The ASA is the independent advertising regulator in the UK. It’s the ASA’s job to ensure adverts across the UK’s media adhere to the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code). Amongst other things, the CAP Code ensures that marketing communications:

• are obviously identifiable as ads; and
• do not falsely imply or claim that the marketer is acting as a consumer.

Consumer protection laws also apply to influencer marketing, and such legislation is enforced by the Competition and Markets Authority (CMA) to prevent unfair commercial practices (which, for example, include the non-disclosure of paid-for content).

What is an ad?

Under the CAP Code, an ad involves the promotion or endorsement of a brand, or its products or services, in exchange for some form of payment (or other reciprocal arrangement), but only where the brand has a form of editorial control over the content. ‘Payment’ may include:

• money;
• commission on ‘click-through’ and/ or the sale of a product or service through an affiliate link;
• free products or services (whether this has been pre-arranged with the brand or sent as an unexpected gift); and
• any other incentive (i.e. being paid to be an ambassador for the brand, or being invited to events or trips by the brand).

If an influencer has received some form of payment, and the brand has an element of control over the content produced, it is likely that the influencer will need to declare in their posts about the product or service that it is an ad. Where an influencer promotes their own brand’s products or services, they too will be caught, and must ensure the post is obviously identifiable as an ad.

‘Control’ is most commonly seen through a brand telling the influencer what to say about a product or service in the content; possibly through the use of key words, phrases, messages or a particular hashtag. Any other instructions (i.e. a brand requesting that the influencer takes a photo with a product, or videos the unboxing of a PR package) also demonstrate ‘control’, meaning the content should be labelled as an ad.

Where ‘payment’ is received, but the brand has no ‘control’ over the content, this may not be considered an ad by the CAP Code, but consumer protection laws will still apply to this sponsored content. Here, the CMA will still expect the influencer to ensure the content is easily identifiable as paid-for content. This can be done through labelling posts as an ‘advertisement feature’ or ‘advertisement promotion’, with any commercial relationships being disclosed upfront.

So, how do I comply?

ASA guidance confirms that ad content should be obvious for consumers to recognise as an advertisement. Consumers may find it difficult to distinguish ads, as paid-for content typically appears alongside non-paid content on an influencer’s channel; so ads must be clearly identifiable to all viewers of the content, not just an influencer’s followers who may have prior knowledge of their work.  

To stay on the right side of the regulator, an influencer should:

• Use the right labels

Ad content should be so obvious that if a consumer clicked on an influencer’s post for the first time, they would be able to recognise that the content is an ad. The ASA recommend using unambiguous labels such as ‘#ad’ or ‘#advert’, and consider labels such as ‘#spon’, ‘#aff’ or ‘#gifted’ to be riskier, as they may not be understood by the average consumer.

• Consider label positioning

A consumer needs to be aware that the post is an ad as soon as they click on to, or read, it. Content labelling must therefore be prominent (easily noticed) and suitable for all potential devices (clear on a mobile, too). The ‘ad’ disclosure should feature at the beginning of the caption or title, or should be in a legible font size and in a colour that easily stands out in any pictures or videos used.

Labelling that does not comply with the CAP Code includes:

• where the disclosure, for example ‘#advert’, is hidden among other hashtags and therefore is not prominent;
• disclosing any commercial relationship with a brand on an influencer’s profile page, but not in a specific paid-content post; and
• simply tagging the brand without disclosing the nature of the content or existence of a commercial relationship.

Don’t mislead

Marketing communications must not materially mislead or be likely to do so, based upon the overall impression they are likely to give consumers. It’s also important not to omit relevant information about the product or service being promoted, which could prevent a consumer from making informed buying decisions. The CAP Code also states that advertisers should take care not to exaggerate the effectiveness of a product or service (i.e. through applying filters or using Photoshop) such that it would give an overriding impression that the product or service is more capable than it is.

The recent ruling by the ASA against Ashteck Media Ltd (who offer debt management services) has highlighted the importance of paid-for content being obviously identifiable as an advert through the use of appropriate labelling. Following a number of complaints about the content shared by three social media influencers on their Instagram stories, the ASA found that the content failed to make clear that it was an ad, and constituted misleading advertising for: (i) over-simplifying the debt reduction process; (ii) failing to reference the risks or fees associated with the service; and (iii) for the overall lack of transparency; resulting in multiple breaches of the CAP Code.

Why does it matter?

Whilst it is important to comply with the UK advertising rules to avoid an adverse ruling by the ASA, there is also value in being transparent with consumers through disclosing when content is paid-for and ensuring it is not misleading. By doing so, this can lead to an increase in consumer trust, as well as a more positive perception of both parties in the social media marketing world; which, in turn, can result in a more loyal, invested following (that will hopefully engage with the content and make purchasing decisions accordingly!). Such compliance also helps to ensure that the commercial relationship between the influencer and the brand is a successful, long-lasting one.

On the reverse, if the influencer is found to have concealed a paid-for post, this may jeopardise future brand deals and generally cause reputational damage. It is therefore key to understand the rules and to closely monitor developments in ASA guidance as influencer marketing practices continue to evolve.

Irwin Mitchell provides legal support to some of the best known influencers, podcasters, agents and brands in the influencer marketing space. For further information about our services, please contact our influencer specialists.