In 2017, digital advertising’s share of global sales overtook TV’s for the very first time (Source: Magna, Awin Report, 2017). As with any new industry, with innovation comes the need for regulation. In the US, the Federal Trade Commission has already issued regulations, in the UK these fall under the Advertising Standards Authority – but risking regulatory surveillance shouldn’t be the only motivation to comply; transparency can be beneficial to a brand’s campaign and building audience trust overall.
Types of partnership
A brand can partner for a sponsored post, much in the same way that a magazine would write an advertorial. These posts or videos should be labeled as advertisement features or promotions.
On average, around 1-2% of people who click on bloggers’ links will purchase a reviewed or promoted product, with commissions paid varying between advertisers and product price points. The click to sale conversion rate will increase depending on how engaged the audience is. For example, one influencer working with Awin with a following of 14k on Instagram and 500k monthly page views on their website sold $750k worth of products for the retailers they featured over the course of a year.
Disclosing commercial relationships
In April 2017, the Competition and Markets Authority (CMA) published an open letter in which they highlighted three particular cases where companies had failed to clearly identify when they had paid bloggers or online publications for featuring products in their blog content and articles. They concluded that everyone involved in endorsing products and services online has a responsibility to ensure they are appropriately labeled as such. This extends to bloggers, vloggers and those posting via social media channels alongside traditional publishing operations like online newspapers. Consumer protection law states that paid-for editorial content has to be labeled as such.
Influencers should familiarize themselves with our policy on how to disclose to their followers when their content is monetized. Brands should also ensure that the influencers they work with are compliant with this to safeguard their reputation. The Advertising Standards’ Agency (ASA) in the UK issued guidance in conjunction with the Code of Advertising Practice (CAP) about affiliate marketing. This includes an infographic detailing how on-site disclaimers can be displayed. Awin has a one-page website - Paid for Advertising - which explains how free content can have a commercial relationship attached to it. This can be linked to by any affiliate.
The influencer builds a relationship with their followers and this relationship relies on authenticity and trust. Concerns around recommendations being made based on financial reward are minimized when the credentials of the influencer and engaged people who share interests with them are considered.
The future of disclosure
The Awin Report discusses the potential development of disclosure in the future. A self-regulatory approach has worked well for coupon code sites, enabling experts to determine what the standards within their field are and create clear guidelines.
As a global industry, despite the nuances in the maturity of the influencer business model in different markets, the future will probably be increasingly universal.
Policy/Guidelines on advertising disclosure for influencer and social media publishers
As a publisher, you are obliged to make it clear to consumers when your content contains advertising material. As an approved Awin publisher, you have agreed to follow local laws and standards as stipulated in section 9.2.4 and 9.2.5 of the publisher terms and conditions.
When working with Awin as an influencer or social media publisher you are required at the minimum to:
- Clearly define all advertising related content using clearly marked hashtags e.g. #Ad, #PaidAd #sponsorship, #sponsored post
Failure to do so could result in penalties being levied by your local advertising authority.
For more information, we strongly urge you to read up on this topic to make sure that you are following the latest laws and standards as it is your responsibility to adhere to them. Below you can find websites with more information.
Regional references on latest laws and standards
UK:
US:
- www.ftc.gov/news-events/press-releases/2017/04/ftc-staff-reminds-influencers-brands-clearly-disclose
- www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf
Germany
Australia:
Benelux:
France:
- www.arpp.org/nous-consulter/regles/regles-de-deontologie/digital-advertising-and-marketing-communications-code/#toc_1_3
- www.arpp.org/actualite/marketing-influence-marques-regles-de-transparence/
Italy:
- www.codicedelconsumo.it/english-version/
- www.iap.it/codice-e-altre-fonti/il-codice/
- http://en.agcm.it/en/media/press-releases/2018/12/ICA-closes-second-moral-suasion-on-influencers-and-brands-yet-opens-investigation-into-possible-hidden-advertising
- www.iap.it/social-network-e-content-sharing/
Poland:
Spain:
Disclaimer: Awin is not responsible for the updating of content in these links. Please ensure that you make sure that the information you are reading is up to date.
Additional tips for influencers:
- Make sure your website has a Privacy Policy and Advertising Disclosure page that explains how you work with your sponsors. You may want to ask a legal expert to assess the wording on these pages to ensure the correct wording is in place. It should be clear to people of all ages, especially young audiences
- Ensure advertising links and associated content are labeled as advertising
- Use the 'paid partnership' label on Instagram and on Twitter use #ad
- A disclosure sentence to the footer of a website will make it present on every page of the site. Also make sure each individual sponsored post is disclosed as such so that audiences can differentiate this among other non-commercial posts
