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The compliance challenges to do influencer marketing right!

Recent investigations on influencer marketing require more cautious actions by companies

Influencer marketing is subject to in-depth scrutiny, which requires a higher level of compliance to avoid potential fines and reputational damages.

What is influencer marketing, and how big it is?

Influencer marketing is a type of marketing focused on individuals that can 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 billion in two years.

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 in the topic.

What are the compliance requirements applicable to influencer marketing?

The main issue 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 recognizable by the public, which can confuse the advertising activities with the personal taste of the relevant 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 and compliance 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 social media 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 three 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 of 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 all the media and Internet companies have entered the Advertising Self-Regulatory Code. 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 article “Online influencer marketing on the spotlight of Italian courts“, the Italian Competition Authority followed the approach adopted by the US Federal Trade Commission and issued continuous warnings during the last two years against influencers. Indeed, it sent in 2017 and in 2018moral suasion” letters to significant and minor influencers and bloggers, recommending them 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) always followed by the name of the relevant brand.

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

What is the future of influencer marketing?

There is no doubt that social media marketing is quite difficult 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 “compromise“. The solution could be for instance in unique hashtags (or even emoji) that might identify paid advertising of specific influencers, but at the same time become part of their brand, so that a further amplified marketing return might balance the invasive nature of such disclaimers.

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. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our clients' success.

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