On Thursday, our co-founder and MD of Influencer Marketing Agency, PMYB (Rohan Midha) appeared on Sky News to discuss the issues surrounding influencer ad disclosure.

If you aren’t currently declaring whether your influencer or celebrity paid posts are ads, we recommend you to begin doing so. The Competition and Markets Authority (CMA) is currently investigating the labelling of social media endorsements and are likely to penalise celebrities and influencers who aren’t disclosing. In addition, they are looking into the companies that are actually paying these social media stars.

 

The Power of Influencers

Social media influencers and celebrities promoting products and services across Instagram, Snapchat, YouTube and other social media platforms are being probed by the competition regulator because of concerns that paid advertisements are not being clearly declared.

Hundreds of thousands of social media stars have a vast amount of commercial power due to the millions of followers that watch their everyday lives online.

 

Rohan Midha Sky News ad disclosure talk

 

The Views of PMYB’s Managing Director, Rohan Midha

Here’s more of what he had to say on the topic:

“Are you disclosing your influencer and celebrity paid partnerships to audiences?

If you aren’t yet, I’d advise you to begin. The CMA is currently investigating and is looking to legally penalise both companies and influencers who aren’t disclosing their sponsored ads.

Disclosing #ad is actually a positive step for everyone, however.

As I said on Sky News last night, brands are actually benefiting from the disclosure of influencer ads. Audiences appreciate it when influencers are upfront about what they are being paid to promote.

Influencers build their followings based on trust. And if they act as if they aren’t being paid, audiences react negatively, and this can result in a loss of respect for the influencer, as well as the brand they’re being paid to promote.

More and more consumers are learning about influencer marketing. And most people can tell if an endorsement has been paid for nowadays.

Also, disclosing won’t damage your endorsement. You shouldn’t think of it as something that will harm your potential revenue. You should think of it as something that will strengthen the trust between the influencer and their audience. And this is what will lead to more positive associations between your brand and the influencer.

The whole influencer marketing industry is built upon trust and authenticity. But if this trust is broken, we have nothing.

 

What are the Penalties for not Disclosing Ads?

George Lusty, the CMA’s Senior director for consumer protection, mentioned: “Social media stars can have a big influence on what their followers do and buy.”

“If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it.”

“So, it’s really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”

The CMA has already written to a number of social media influencers and celebrities, in order to gather more information about the partnerships they have with brands.

During the show, George Lusty mentioned that if people do not cooperate with the laws regarding disclosure that they will begin handing out fines and in the worst case scenario, imprisonment.

 

For more information on the role of regulation in influencer marketing review the articles below:

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The FTC saga continues. Questions still remain on how the FTC Guidelines will impact on influencer marketing. Recent publicity has sent shudders through the industry, with concerns that the recent…

 

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