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As The Government Cracks Down, We Go Inside The Murky World Of Influencer Marketing

© Photo by William Iven on Unsplash

As I scroll through Instagram on the train home from work I am overcome by a desire to shop. It’s like flipping through the pages of a luxury magazine like Vogue or Conde Nast Traveller, except, I never run out of pages to turn.

I keep seeing the reissued 90s icon that is the Dior saddle bag popping up – I need one. Everyone seems to have a white linen Reformation ‘milk-maid’ style dress too, I swipe up and pop one in my shopping bag. Everyone seems to be on a luxury holiday right now, the Greek island resort a certain fashion influencer is currently at looks good, maybe I should go there? Oh man, that swimsuit she’s wearing is so nice, where is it from? £100? Sure, why not.

Oh, wait. I can’t afford any of this.

But, here’s the thing – none of the people showing me this stuff had to pay for it. Some of them may even have been paid to post about it. It’s all promotions, seeded gifts and paid for partnerships.

From Marks and Spencer to Dior, Natural Cycles to Panasonic, spurious weight loss aids to Innocent smoothies and boutique hotels to Thompson Travel, over the last few years, influencer marketing has become an increasingly big part of the way that corporations large and small advertise their products to us.

Influencers sway our shopping habits and inform our choices. If you are being generous you might call them tastemakers, if you’re feeling more cynical you might say they make a living by promoting stuff to their peers. But, what exactly qualifies you as an influencer? Simply, an influencer worthy of a brand’s attention is anyone with around about the 10,000 follower mark to those with over one million followers. But it’s difficult to say exactly how big the influencer marketing industry is because, for one, the data is patchy. Earlier this year, a report from the Association of National Advertisers (AN) found that 75% of marketers currently work with influencers. Around 43% of those said they were planning to increase the amount they spend with influencers over the next year and, of those who said they were not currently engaged in influencer marketing, 27% said they plan to get into it soon.

And then, there is the fact that not all influencers are declaring their commercial relationships, which is why a government watchdog has decided to step in. On the 16th of August the competition and markets authority (CMA) announced that they were launching an investigation into the whole racket because they are concerned that ‘social media stars are not properly declaring when they have been paid, or otherwise rewarded, to endorse goods or services’.

As things stand, the only guidelines when it comes to influencer marketing are from the Advertising Standards Authority. They state that any post where money has changed hands between a brand and an influencer must be clearly marked through the use of #ad or a paid partnership tag. However, there is nothing to stop an influencer showing off something they have been gifted or received for free.

Speaking exclusively to Grazia, a CMA spokesperson clarified their position. ‘As soon as someone looks at a social media post, they must be clear if it’s a genuine personal opinion or if what they’re seeing is the result of corporate promotion’ they said, ‘so, if celebrities or influencers are posting about products which they have been paid to promote – including being gifted, sponsored or thanked in some other way by a brand - they must make that clear’.

This seems to go further than ASA regulations on paid partnerships. Following a monitoring exercise, the CMA has contacted a host of influencers and celebrities and asked for them to disclose details of their relationships with brands. So, does this mean that the days of seeing your favourite influencer wearing the latest Realisation Par dress while they sip rose on their Habitat sofa before they do a story just before bed about how amazing Estee Lauder night cream is without disclosing what they were and were not gifted or offered a discount on are drawing to a close? The spokesperson told Grazia that they are currently looking into where the boundaries lie to make sure that influencers are not ‘breaking consumer protection law’.

It’s easy to understand the concern. After all, how many of the people I’ve seen wearing THAT Reformation dress or THE Dior handbag would have actually paid for it with their own cash? Posting about how amazing something you’ve been given for free is, unquestionably, an endorsement. Take Made in Chelsea’s Louise Thompson, for example, earlier this year she was hauled over the coals (by which I mean told not to do it again as opposed to fined) by the ASA for offering her followers a 15% off discount code for a Daniel Wellington watch which retails for £139. She hadn’t used the #ad, #sponsored marker or said anything to suggest that she was being paid to promote the watch.

Does Louise Thompson even wear Daniel Welington watches? Would she ever buy one with her own money? We’ll never know.

Author and columnist, Laura Jane Williams (@superlativelylj) jokingly refers to herself an ‘accidental influencer’. A writer by trade, she has found herself with 21.7k followers on Instagram. This has led to paid promotion partnerships with Marks and Spencer, a Tea Pigs ambassadorship and gifting from a whole host of brands including, recently, a £650 coffee table from West Elm. You might be surprised to find that she actively embraces the CMA’s crackdown. ‘I welcome the investigation’ she says ‘I’ve long thought that calling influencers “influencers” is dangerous. This is where things get confused. I think we need to rename them “peer-to-peer marketeers” because that’s what they are.’

Laura accepts that she occupies ‘a blurred space now’, brands approach her regularly and she also receives unsolicited stuff regularly. However, she is clear that she is first and foremost an author – ‘you could send me a chapstick and I would tell you I was gifted it’ she says. I ask her why she went to such lengths on her Instagram stories to let her followers know that the coffee table was gifted despite the brand asking nothing of her? ‘The question, for me, is this’ she says ‘are we looking at a writer in her living room who happened to get a free table, and has told you about it – or – are we looking at a career influencer who has been paid a sum of money to tell you about said table, knowing that they’ll probably sell it on Ebay in three months anyway. If you know that you’re following a marketeer, you will consume the information differently.’

Gifting and paid product placement are just some of the tools in an Instagram influencer’s social media kit. Affiliate links are increasingly big business for those with the “swipe up” function. Laura doesn’t use them but admits she has been ‘tempted’. She recently bought herself a spray mop – anyone who, like me, has ever sloped dirty water all over a clean floor will know what a revelation these are. ‘The story I posted about the mop was meant to be funny’ she explains ‘I linked out to it because it really is an amazing mop but then over 1,000 people swiped up to buy it. If I had done an affiliate link I would have made a couple of hundred quid – of course it’s very tempting but right now I’m not going to do it.’

It’s easy to be cynical, judgemental even about the work that influencers take on. But, is it really any different to what magazines and newspapers have been doing for decades? Laura points out that product placement and gifting in the magazine industry is ‘a tale as old as time’ and, indeed, isn’t this exactly what former Vogue fashion director, Lucinda Chambers spoke about in her now-deleted vestoj.com interview? In it, she complained about having to do a ‘crap’ cover with Alex Chung wearing ‘a stupid Michael Kors T-shirt’ because ‘he’s a big advertiser’.

Emma Hoareau (@emmahoareau) is a former beauty journalist turned blogger and photographer who now runs a very successful Instagram account, focussing on skincare and beauty. She has 38.5k followers and counting. She too is meticulous about tagging her brand partnerships, and regularly works with the likes of Esthederm, Clarins and Nuxe to name a few. ‘I don’t have the option yet to put “paid partnership” yet’ she explains ‘but I will always hashtag ad. I always let people know when something is paid for, I think that’s really important. I’ve had my blog for 9 years and I’ve always done that.’

Like Laura, Emma too welcomes the CMA’s investigation, crackdown and the potential of further regulation with open arms. ‘I only work with brands that I like so it’s not an issue, but I think people who work with brands that they don’t actually like do want to hide it. I recommend loads of products that I am not paid to promote as well, in fact that’s how most of my partnerships come about. So, I’m more than happy to declare when I’ve been paid – people know we make money from the placements – it’s not a secret’ she says, before joking ‘I have to pay my rent and I can’t pay it in lipstick, sadly’.

As I speak with Emma, the parallel with the magazine industry comes up again – ‘people know that magazines contain adverts and they buy them anyway – what happens on social media is not different or, at least, it shouldn’t be.’ Emma, like Laura, is not a fan of the term ‘influencer’. It seems like there is a tier of ‘influencer’ that those who create what they call ‘organic’ content don’t want to be associated with. I ask Emma to clarify the difference. ‘It’s about having a balance between creating authentic content and working with brands that you love already’ she explains ‘the term influencer is very broad, I don’t love it. I used to be a blogger and I’m fine with being referred to like that. Instagram influencers are now also people who are famous because they want on reality TV shows and, to me, that’s a very separate thing. I would never put myself in the same bracket as Louise Thompson, for example.’

The beauty industry is perhaps, even more so than fashion, a revolving door of gifting, advertising and product placement. Has Emma ever been asked to do anything under the radar by a brand? ‘I have been approached by brands who say to me “we don’t want it to be marked as an #ad because we don’t want to be seen to be paying people so can we pay you and put it down on paper as something else?”’ she says. Has she ever accepted? ‘I’m absolutely not comfortable with that and I would always decline it. The brand I’m referring to wasn’t one I was already talking about or using - the brands I work with are ones I already talk about, use and would recommend anyway.’

In Germany, a court recently ruled that influencers must tag all posts where they are in a commercial relationship.

This extends to gifting and product placement in return for a free holiday or meal, it doesn’t matter whether money has actually changed hands. In Britain, are we just a bit behind with the times?

Anna Hart thinks we are way behind and worries that the CMA probe is just ‘ink in the water’. Anna founded influencer media management agency One Roof Social in 2015 because she realised that nobody really knew what they were doing when it came to influencer-led marketing campaigns. Her aim is simple – ‘to run responsible campaigns and deliver results for our clients’.

‘I don’t think the current regulation works’ Anna says, ‘The ASA are really clear – if you are paid or gifted you need to make it clear. If a brand contacts an influencer and says “hey would you like to receive this candle and can you put it on your Instagram” it is treated in exactly the same way as a brand paying someone to promote the candle. This isn’t always understood. I think the big problem is that anyone can be an influencer, irrespective of professionalism - we need a dedicated regulatory body to oversee influencer-led campaigns’.

Anna receives between 50 to 80 emails every single week from people who want to be influencers. Everybody, it seems, wants a slice of the brand money pie. It’s not hard to understand why – look at Zoella’s Superdrug make up range – the potential for perks and financial return appears great.

None of it surprises Anna. ‘It looks like the dream, doesn’t it?’ she says ‘why wouldn’t anyone want to join the party? But, right now, this is the least understood industry in the media world’. What does she think has driven the industry? ‘It’s come from the fact that influencers are so easily accessible, available and easy for consumers to engage with’ she explains ‘coupled with the fact that influencers haven’t cost much to brands – if an influencer gets paid £10k to talk about a handbag, that’s a lot cheaper than a double page spread in a magazine.’

It’s both lucrative and in demand so why does Anna think so many influencers are reluctant to be called influencers? She laughs. ‘It’s just ridiculous – it’s silly’ she says ‘if you’re on Instagram and you’re making money out of it, you’re an influencer. End of’. That said, Anna does think there is ‘a certain shame to it’ because ‘it takes no qualification or professionalism – the talent and the contextual stuff about a person’s background is becoming less and less relevant to brands’ she explains ‘they want to know about a person’s numbers and how much money they can make for them. That’s the bottom line’.

That said, Anna thinks some of the snobbery is misplaced. ‘I don’t think people realise what goes on everywhere else in the media market’ she says ‘put it this way: And and Dec would never be seen wearing Omega watches on TV if Rolex was on the ad break. A lot more goes on than is made clear.’ She adds that ‘the celebrity space is a lot worse than the pure influencer space’ because ‘talent managers and agents are not equipped to do commercial deals’ and reveals that she, on behalf of her company, actually pulled out of a campaign for that reason last year. The problems, Anna says, are endless – it’s not only consumers who risk being misled but brands too. There was an incident, she says ‘when a prominent UK-based influencer was asked to promote a wellie brand -yes, it’s the one you’re thinking of.’ Said influencers posts flopped – ‘when we looked into her numbers, the majority of her followers were in Dubai…where it doesn’t rain’.

Of course, there are straight up influencers like Zoella and Louise Thompson but, the lines for everyone else are now so blurred on Instagram - can a novelist ever also be an influencer? At what point does a fashion editor become a salesperson? Can a make-up expert ever be an independent reviewer if they take brand cash? What’s clear is that the government’s watchdog has decided the world of influencing is now worthy of their attention because consumer law may be being breached, knowingly or not.

If you asked me for a restaurant recommendation and I recommend somewhere but if you found out later that I was on commission for the restaurant that changes things a bit doesn’t it? What about if a food Instagrammer was on commission? That changes things a lot doesn’t it? It matters that influencers are honest about whether they paid for the 5 luxury holidays they went on between April and June in the same way that airbrushing people to make them look thinner matters – it’s about expectation and reality. But, I’m not convinced that an influencer promoting something they didn’t pay for themselves is any different to me seeing a picture of a £4,000 borrowed Gucci jacket in a glossy magazine shoot.

Perhaps it’s not always the influencers themselves that are at fault – surely there needs to be a uniform agreement between the ASA, the CMA and the social media platforms? Anna thinks this is the only way forward. The future of ‘peer-to-peer’ marketing looks bright, if a lot more heavily regulated.