Incompetent #ad Disclosure – the ASA Issues Warning to Influencers

Incompetent #ad Disclosure – the ASA Issues Warning to Influencers

The ASA has issued a strong warning to advertisers: Failure to comply with ASA’s rules on advertising disclosure is widespread and unacceptable. The regulator is now planning to deal tough with the violations.

We blog regularly about the review of advertising rules in the social media landscape by the Advertising Standards Authority (ASA). The ASA has now released a social media compliance report after analyzing over 24,000 social media posts from over 100 UK-based influencers. The ASA specifically dealt with compliance with the rules for disclosing ads on social media.

The ASA’s CAP code and UK and EU consumer law require that promotional messages intended for promotional purposes be clearly labeled as advertisements. Disclosure is required so that consumers know what advertising is and what is a genuine unbiased opinion. The ASA recommends influencers use #ad on social media posts to get that message across to consumers. However, the ASA analysis showed a low level of compliance: only 35% of the posts were correctly labeled and obviously identifiable as advertising.

Key issues identified in the ASA report:

  1. Inconsistent disclosure on social media posts – If ad content spans multiple consecutive social media posts, each individual post must be displayed separately as an ad, unless it is absolutely clear that it is part of the same post.
  2. Ad label visibility – Often times, when social media posts were flagged as ads, the captions were in a small font obscured by platform architecture, a color similar to the background, or otherwise difficult to see.
  3. Private label ads – Influencers should not rely on BIOS or previous posts to make it clear to consumers that they are connected to a product.

In private label advertisements, the influencer advertises their own brands and not a paid collaboration with third parties. What is interesting is the fact that the ASA sees this as a central issue. Indeed, this is one area where the ASA recently took enforcement action against Molly Mae Hague when they ran a non-compliant raffle that we commented on.

Key takeaway:

Consumers are spending more time online and we expect influencer advertising to grow in popularity year on year. The competition and market supervisory authority also conducts its own investigations in this area, which increases regulatory pressure. The CMA’s vigilance also increases the risk of fines for those who fail to abide by the law.

ASA CEO Guy Parker has made it clear that regulators are ready to use their powers to punish brands, agencies and influencers who do not use the ads mandated by the ASA.

Squire Patton Boggs has a team focused on advising on advertising and media issues. For advice on compliance with the GAP Code or UK and EU law on disclosures required, please contact Carlton Daniel, Partner.