Just over a year ago, our Media Advisor and Trainee Solicitor, Fiona Peet, wrote about the evolving regulatory landscape affecting celebrity endorsements on social media. In her latest article, she looks at social media influencers and a recent celebrity endorsement case – the first of its kind involving snapchat.

As social media and modern technology rise to never-before-seen heights, ‘influencer marketing’ has evolved to epic proportions. And it’s a powerful tool for any advertiser.

According to the ‘two-step flow form of communication model’, most people’s opinions are influenced by ‘opinion leaders’. These opinion leaders, or ‘social influencers’, are influenced by the mass media. This phenomenon is known as ‘influencer marketing’.

It’s similar to word-of-mouth, and ‘generates more than twice the sales of paid advertising’. In other words, if a celebrity, known for their glowing skin, advertises a brand of skincare, people are much more likely to buy it than if they saw an advert for the same brand on a poster. It’s been endorsed by someone of influence.

But, regulators face a problem. Social media influencers don’t fit neatly into standard marketing or advertising categories – and the regulation isn’t developing quickly enough to keep up with technology.

The Advertising Standards Authority (ASA) maintains that ‘consumers should always be aware when they’re being advertised to. If the commercial intent isn't clear from the overall context of the communication, it should be labelled as an ad – so as not to break the ASA’s rules and mislead the influencer's audience.’

But, when is a post a genuine opinion, and when is it an ad?

According to the ASA, if a brand has ‘exercised effective control’ over an endorsement, and rewards an influencer with a payment or reward, their post count as an advert.

Brands do this in different ways. Some retain complete control over social media posts, while others take a more hands-off approach and leave the content, timings and format completely up to the influencer. But in both instances, the ASA will treat the post as an advert.

The Geordie Shore star, Marnie Simpson, was recently deemed to have broken the ASA’s rules with two posts on Snapchat, in the first case of its kind involving the App.

A few years ago, Snapchat marketing was fairly low-scale. But, in 2015, it introduced ‘Discover’ – a designated area for ad-supported short-form content from major publishers. Now, Snapchat’s paid-for campaigns are seen by between 500,000 to 1,000,000 people every day.

Snapchat stories self-delete 24 hours after being shared, which makes it harder to monitor unlawful advertising practices. But, the ASA chief Guy Parker insists that ASA rules ‘apply equally to Snapchat’.

In cases like this, the ASA will try to get certainty that no future adverts will be ‘hidden’ beneath a seemingly authentic endorsement. ASA holds both the brand owner, and the influencer, to public account. In Simpson’s case, she hasn’t been ordered to take any action but the two advertising companies involved will have to make sure that #add appears alongside future adverts they produce.

The ASA can’t impose fines. But, it can refer repeat offenders – both brands, and the celebrities endorsing them – to Trading Standards to take further action. As Guy Parker said, ‘it’s just not fair to expect people to play detective, and work out the status of a tweet, post, or story.’

Until there’s a requirement for a Code of Compliance to be integrated into advertising contracts, the ASA will likely continue to be flooded with complaints of ‘hidden’ advertising – and will continue the game of whack-a-mole.