Playing by the rules in an era of internet advertising
Advertising body to sanction companies and their influencers if they fail to declare their relationship upfront in social media posts
Celebrities including Ellen DeGeneres, Nicki Minaj and Lindsay Lohan have faced the wrath of authorities in the past for failing to be transparent about their relationships with brands.
"Influencer marketing" is well established in the US and if influencers fail to label their social media posts appropriately, they can be fined. The Federal Trade Commission, an agency of the government, sends out warning letters for disclosure violations on social media.
In SA, influencer marketing is still in its infancy. A code of conduct for the industry was finally released at the end of May. It forms part of the Advertising Regulatory Board’s (ARB) Advertising Code of Practice, and falls under appendix K — the social media code.
The code came under the spotlight recently when the ARB received a complaint about make-up influencer Kandy Kane (real name Marlize Liebenberg) for not marking a photo and video on social media as advertising for Volvo, which signed her on as a brand ambassador.
The ARB ruling against Kandy Kane established that "influencers are expected to disclose their relationship [with brands] whether it is money or goods that have been exchanged".
It states that consumers need to understand if a social media post is paid advertising, as opposed to an organic social media endorsement, and should be marked as an #ad, #advertisement or #sponsored.
In a YouTube video addressing the situation, Kandy Kane said: "I’ve been pretty open about the fact that I am a Volvo ambassador, but I don’t get paid for this hence why these posts aren’t [labelled as] sponsored. I don’t get to keep the car, it’s not my car even though it’s my car." Subsequent to the ruling, Kandy Kane and Volvo decided to amend the post title and add hashtags and disclaimers in the description box. "Going forward, I’m going to add it to every single post now; that it’s not a paid sponsorship but I’m an ambassador. Just to be safe, safe, safe," Kandy Kane said.
But what happens when an influencer does not follow the rules? ARB CEO Gail Schimmel says the code makes the brand liable.
"If influencer marketing works, it is the brand that benefits — as is the case with any advertising — and therefore when it goes wrong, the brand must account to us and pull the material if necessary," says Schimmel.
The repercussions on the influencer are "softer". She believes brands won’t want to work with influencers who refuse to comply, and consumers are likely to stop engaging with them if there is a lack of transparency.
In the United Arab Emirates, if influencers commercialise their online activities, they require a licence, which costs AED15,000 (R58,200) a year.
"I would hate to see mandatory licensing in place as I’m of the opinion that it is unconstitutional," says Schimmel. "However, the idea of some sort of accreditation is something that is being discussed."
The decision to enforce the ARB’s social media code is welcomed by the influencer marketing industry and influencers, says Anne Dolinschek, founder and chief strategist at Nfluential.
"The power of this marketing channel has finally earned an official seat at the marketing mix table, and because it is a legitimate channel, it needs to be regulated just like traditional advertising," says Dolinschek.
The new code of conduct, she says, boils down to preventing brands (through influencers) from misleading consumers — that is, followers or audiences.
"Transparency is key to achieving this, and also for influencers to maintain their credibility and authenticity."
Influencers with integrity and credibility are also happy about the ruling as they get frustrated seeing unethical and misleading behaviour from self-proclaimed influencers who are tainting the industry for all, she says. "The ruling will start weeding out the charlatans from the real influencers and it will be easier to identify the right influencers to work with."
Maps Maponyane, a social media influencer with a combined 2-million followers on Twitter and Instagram, says the ruling has been a long time coming. "It has become the standard across prominent regions in the world, and with influencer marketing growing rapidly in SA over the past couple of years, it was bound to happen.
"If you’re in some sort of position of public influence, it’s important that you’re authentic in your portrayal," says Maponyane.
But he says influencers may still be reluctant to stick to the requirements of the ARB by including #ad or #sponsored to posts, because it "can negatively [affect] the traction and engagement of a post".
"It will be in the interests of brands to ensure that influencers do so. However, until the consequences of not upholding this are actively exemplified, the change will be merely unnoticeable and barely adopted — at least for a while," he says.
Local gamer Grant Hinds, who has a large following across YouTube, Instagram and Twitter, says the gaming industry is different to a lot of other industries.
"Having a brand support you is like a badge of honour. People really dig it but at the same time I think my audience knows the reason I’m around is because of these brands, which is very exciting.
"The more we learn that transparency is important when it comes to sponsorships, the better communicators we’re going to be," says Hinds.
If people want influencer marketing to be taken seriously, it needs to be regulated, he says.