Authorities crack down on misleading influencer marketing

Last week marked a major new milestone in the evolution of influencer marketing and the way in which content is presented and labelled for consumption by the mass audience.

A number of celebrities, including Alexa Chung and Ellie Goulding, agreed to a new code of conduct for how they label social media posts. Essentially, they will no longer be allowed to be paid to endorse products without disclosing in the post that they are being compensated.

It is a move that has been long resisted by both marketers and celebrities alike but pressure has been brought to bear by the UK competition authority which has argued that the practice of stars being paid for endorsing products without disclosing they were being rewarded by the company is fundamentally dishonest. Moreover, the authority held that such practices risked inducing consumers to make purchases based on false and misleading information, namely that the star “organically” cared for the product.

It is still early days for this backlash against many of the practices of influencer marketing. But already the move will have put many involved in it on notice that change is coming.

Over the longer term, of course, it is likely to make the payment of both stars and non-stars less effective for companies and therefore there is a possibility that it will eventually greatly reduce the revenue earned by “influencers”. Time will tell.