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How to do influencer marketing right!

Influencer marketing is subject to deep scrutiny which requires a higher level of compliance to avoid potential fines. 

What is influencer marketing and how big it is?

Influencer marketing is a type of marketing focused on individuals that are able to drive sales often showing the advertised product as part of social media and/or blog posts.

As showed in the chart below, this market has already reached around $ 6 billions of value and is expected to reach $ 10 billions in two years time.

Also, during the first half of 2018, the average monthly Google search for “influencer marketing” has increased nearly five-fold which shows once again the interest for the topic.

What are the regulatory requirements applicable to influencer marketing?

The main issue that is challenged to influencer marketers is the lack of transparency as to the fact that they are advertising a specific product. Indeed, their advertising activity is often not clearly recognizable by the public which can confuse the advertising activitiy with the personal taste of the relavant influencers.

In order to sort this issue, the Italian Self-Regulatory Advertising Authority issued the so called “Digital Chart” which provides its recommendations on how to ensure transparency of influencer marketing prescribing, when the marketing activity consists in publishing social media post, the obligation to add, as part of the initial section of posts, the following:

Pubblicità /Advertising”, or “Promosso da … brand/Promoted by…brand” or “Sponsorizzato da…brand/Sponsored by…brand” or “in collaborazione con  …brand” or “in partnership with …brand”;

and/or within the first 3 hashtags (#) one of the following statements:

“#Pubblicità/#Advertising”, or

“#Sponsorizzato da … brand/#Sponsored by… brand ” o

“#ad” together with “#brand”

while – if the marketing activity consists in publishing pictures showing products given by the advertised company – the post shall show a disclaimer such as “prodotto inviato da…brand” (product sent by…. brand).

Influencer marketing in the spotlight of authorities

The breach of the principles set forth by the Italian Self-Regulatory Advertising Authority cannot lead to fines, even if the Advertising Self-Regulatory Code has been entered by all the media and Internet companies. Therefore, it is indirectly binding for all brands.

But, apart from the recent decision of the Advertising Self-Regulatory Jury on influencer marketing covered in this blog post, the Italian Competition Authority followed the approach adopted by the US Federal Trade Commission and issued continous warnings during the last two years against influencers. Indeed, it sent in 2017 and in 2018moral suasion” letters to large and minor influencers and bloggers, recommending to include in their posts hashtags such as #pubblicità (advertising), #sponsorizzato (sponsored), #advertising, #inserzioneapagamento (paid post), or, in case of supply of a product even if free of charge, #prodottofornitoda (product supplied by) followed always by the name of the relevant brand.

This is a more relevant warning since the Italian Competition Authority has jurisdiction also on mislaeding advertising and unfair commercial practices that provides for fines up to € 5 millions.

What is the future of influencer marketing?

There is no doubt that social media marketing is quite different to control. An Instagram story lasts for just 24 hours which makes any potential court order useless and the detection of such conducts a sort of “mission impossible“.

In any case, given the potential fines as well as the risk of reputational damages that brands as well as influencers themselves can suffer, it is necessary to identify some sort of “compromize“. This could be for instance by means of unique hashtags (or even emoji) that might identify paid advertising of specific influencers, but at the same time become part of their own brand, so that the invasive nature of such disclaimers might be balanced by a further amplified marketing return.

It is not an easy solution to pursue, but it might contribute to the reputation of brands and influencers.

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Giulio Coraggio

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world leading law firm DLA Piper. Top global IoT influencer and FinTech lover, finding solutions to what's next for our clients' success.

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