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Mandatory Regulations In Influencer Campaigns: A Battle between Credibility and the Rules.

November 12, 2019

Influencer Marketing is an industry still in its youth, because of this, there are many questions which are yet to be answered – specifically in relation to the law. ‘Should Influencer’s disclose sponsorship? Will disclosing lower the strength of the influencer over the audience? Are influencers aware of the relevant regulations? Will brands be liable if an influencer does not comply?”. In this article, we will be answering all these need-to-know-asap questions.

R-Squared is a leading expert in
the Influencer Marketing Industry, and as such we have encountered the above
concerns from brands and influencers over the past years. It is necessary to
note that the requirements are mandatory and failure to comply might result in
sanctions, costs and legal implications. Similarly, audiences will also demand
transparency and have repeatedly stated that they detest hidden marketing
objectives. It is therefore beneficial overall to disclose disclose disclose.

The Reality

In today’s world, audiences/followers have become experts in identifying unauthentic content. They can identify sponsored content and are also able to identify when paid content is made to appear otherwise. The credibility of both the brand and the influencer is jeopardized if this occurs. Why then mislead audiences in the first place when they are merely looking for sincere recommendations and full transparency. We have noted at R-Squared that content complying with regulations and disclosed as a sponsored post gathers high engagement and leading-sales. A clear indicator that: People love transparency!

Influencer Marketing is more effective when Influencers are not paid to lie about their fondness for the brand/product. An influencer must truly love the product/brand and then be paid for content creation and the use of their feed – this should be a primary consideration during the selection on an influencer. Therefore, when the audience sees the influencer’s post, they will understand that even though the influencer is being paid to endorse the product, they truly love the product nonetheless. The audience will note the authenticity and their credibility and personal brand will only increase.

Unfortunately (and not unsurprisingly),
the growth of influencer marketing has led to unprincipled endorsements in
order to increase earnings. This in turns, leads to an alienation of the
influencer’s followers, the influencer’s actual ‘influence’ being watered down
and have a negative impact on the brand’s equity.

Last year, the Federal Trade
Commission (USA) filed a complaint against Warner Bros studio for failing to properly disclose
it had paid the YouTube celebrity PewDiePie to promote a video game on YouTube,
Twitter, and Facebook. Before that, the FTC has also targeted garment maker
Lord & Taylor and an ad agency for similar offences. Failure to comply with
regulations can lead to not only legal action but a loss of credibility in the
eyes of the audience/consumers.

Recently, FTC publicised it’s Social Media Influencers’ Disclosure 101, where it states that ‘If you endorse a product through social media, your endorsement message should make it obvious when you have a relationship (“material connection”) with the brand. A “material connection” to the brand includes a personal, family, or employment relationship or a financial relationship – such as the brand paying you or giving you free or discounted products or services.’

At R-Squared, we believe that
transparency is the key to a successful influencer marketing campaign. We have
created a framework which conforms to the various industry standards and regulations.
As you may have noticed (because we keep bragging), our CEO and Founder
Stephane Rogovsky, contributed to establishing a social media code of conduct and
is the chair of the Digital Influencer Marketing Committee at the IAB (SA).

In our standard vetting framework, psychology is key. We first identify, analyse and assess the brand’s true alignment, if we find that the proposed influencer does not believe nor align with the brand’s product or service, we simply do not select them. Want a free tip? If an influencer loves a product or brand, the influencer is automatically more passionate and authentic in his/her content. In turn, the audience will feel the authenticity and transparency in the content, even when the influencer is paid for the content.     

The Regulations

South Africa created the Advertising Code of Practice on Social Media (in standard with the International Code of Advertising Practice) and the Influencer Marketing Code. For instance, one of the stipulations of the code is that sponsored advertising is required to have #sponsored at the beginning of the post. At R-Squared, we believe in revealing the full thing – #sponsored. 

Specific industries of the economy also have additional codes of practice that complements the general code. For instance, the Marketing Code Authority’s Code regulates the medical and health industry. R-squared is also a member of the MCA and understands the rule and implication for all of our health-related campaigns to ensure full compliance with our Client’s medical/health product campaign and strict risk reduction.  We would also highly recommend anyone working on influencer marketing projects pertaining to industries which additional rules apply, to join the relevant body.

In most industries code, the brand
is considered as the content creator and the social media as the publisher. This
leaves influencer marketing in a grey area, even though we know in reality that
the content creator is the influencer, not the brand, and the publishing
platform is the influencer’s personal social media feed. There is, therefore, a
critical need for the influencer marketer to understand each code of conduct,
to know the meaning and consequences of every rule, rather than to work on
self-assumption. This is critical for protecting the brand’s equity because
ultimately, the responsibility is carried by the brand.

Also, regulations of various
industries refer to the Consumer Protection Act and Unlawful Competition laws
of South Africa. Thus brands, have a lot to know and to comply to when managing

Conclusion: The Way Forward

Not every influencer is aware of
the regulations and how to comply with them. The rules are somewhat cumbersome and
are constantly evolving. However, disclosure is mandatory. Is it is therefore
essential that ANYONE managing an influencer campaign has a sound understanding
of each applicable rule and clarifies it whenever necessary with the relevant
body rather than working on self-interpretation. Complying with the rules makes
for increased trust and credibility with the target audience. To control the
possible negative outcomes of non-compliance, it becomes important for a
professional influencer marketing expert to manage influencer marketing campaigns

October 2019. *Emmanuel Okonkwo,
External Communications and Jordan Pieters, Social Media Manager at R-Squared,
a leading influencer marketing creative agency in South Africa that works with
most of the best brands and agencies in the country and internationally.
R-Squared Digital is known for its masterful management and its specific
industry expertise in designing, executing and managing influencer marketing
projects that are extremely engaging, authentic, and protecting the brand
equity –

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