Is influencer marketing ethical or legal?

A quick guide to working with the Insta-famous

Guest article by Joe Sinkwitz of Intellifluence, originally posted on October 12, 2016

A hot topic in the online marketing world in the latter half of 2015, influencer marketing has since exploded in popularity — it is virtually possible to attend a conference or sit on a marketer’s Twitter feed without seeing at least one pitch on how to attract or use influencers or why you could be left behind for failing to employ influencer marketing.

What are not discussed frequently are the ethical and legal considerations that are inherent to influencer marketing’s existence. In this article, I endeavour to rectify that issue by exploring how influencer marketing works and looking at the guidelines that shape it.

“We aspire to be like our heroes…”

Why write about influencer marketing?

Source: Google Trends

First, a definition. As I am wont to say, influencer marketing can be defined simply as having someone else tell your story for you — it is the digital version of word-of-mouth marketing. For our purposes, there are three types of influencers: aspirational, authoritative, and peer.

59% of marketers plan to increase their influencer marketing budget in the next 12 months.

1. Aspirational influencers

Celebrities are the largest grouping — do you aspire to be like David Beckham? I’m a Yank, so I don’t know if this example is still relevant, but at least I wasn’t about to mention the Spice Girls. Engaging Mr Beckham as an influencer would be to play on a prospective customer’s desires — we aspire to be like our heroes and own what they have.

2. Authoritative influencers

“Authorities” in this definition are topical experts with a trusting audience. Inexplicably, there’s a population in the US that hangs on the words of Dr Oz, despite his claims being repeatedly censured by governing medical bodies. The studio television audience, however, views Dr Oz as an expert — if he says that licking a pavement during a full moon will result in weight loss, they will trust his advice to a surprising degree. Authoritative influencers exert an air of competence — on a psychological level, we feel compelled to seek approval through mimicry.

3. Peer influencers

The type of influence we’re going to refer back to most for this article is that of everyday, normal people: peers. The difference between peer influence and the previous two types is that we self-identify the most with our friends and neighbors: it isn’t so much of a desire to have what they have — it is a need, a compulsion.

“Get started today, because your competitors might already be ahead of you.”

Is influencer marketing ethical?

One of the earlier writers on the subject of ethics in influence is Kristin Matthews of Convince and Convert. She contends that while the end influencer has the ultimate responsibility to their audience in terms of disclosure of monetary or product compensation, since it is the brand or agency that stands to face legal ramifications of marketing action, the ethical decision of forcing disclosure of influencers is that of marketing transparency — one should not hide or shirk away from the duties of disclosure.

Naturally, as owner of Intellifluence, I frequently think about the ethics of influence — it is my recommendation to everyone using the system to be clear in disclosure. If anything, I think audiences appreciate honesty and will be more likely to reward said honesty with purchasing at a higher rate long term than those audiences who come to believe they’ve been misled.

“If you are uncertain as to the legalities of any concept or tactic, consult a licensed, local legal expert.”

And is influencer marketing legal?

Legality is largely dependent upon geography, so for the purposes of this piece, I wanted to look at three large English-speaking countries to see how influence laws differ. Keep in mind that I am not a lawyer or solicitor and this should not be taken as legal advice — these are just guidelines to reference. If you are uncertain as to the legalities of any concept or tactic, consult a licensed, local legal expert.

1. Australia

Referencing the Australian Competition and Consumer Commission guide of online reviews, using influencers for marketing purposes is acceptable so long as:

a) The commercial relationship is transparent. Most of the transactions in my network are in the way of product in exchange for an honest review, so for the transparency an influencer in Australia should state that product exchanged hands for the purposes of the review.

b) The review must be impartial (i.e. not written by the brand/agency). I find this somewhat humorous as the best influencer campaigns take place using the influencer’s voice; brand written reviews often come off feeling flat and inauthentic. According to Aussie law, the review needs to be truly generated by the influencer.

c) The review cannot be edited to the point of changing meaning. This seems valid; in most cases one would not have the opportunity to edit an influencers’ tweets, LinkedIn posts, or self-hosted blog posts, but this appears to be appropriate protection to ensure that impartiality is upheld.

53% found the opinion of the blogger or vlogger ‘much more important’ or ‘little more important’ than other sources of information” — Competition and Markets Authority report

2. United Kingdom

Reviewing the Competition and Markets Authority’s report on a call for information regarding online reviews and endorsements, the law is still unclear. The CMA is aware that bloggers, online publications, and social media mavens generate revenue by publishing paid advertorials, sponsorships, and the like. However, they have not gone so far as to indicate what should occur in terms of appropriate disclosure (to the best of my knowledge).

If anything, this report should be required reading for anyone uncertain on the prospects of efficacy of influencer marketing — by CMA research, “53% found the opinion of the blogger or vlogger ‘much more important’ or ‘little more important’ than other sources of information” — to me this points to something I now take for granted: in a world becoming blind to traditional advertising, influencer reviews are the future.

3. United States

The geography I’m most familiar with, given my native status, is also the one with the most confusing disclosure guidelines:

a) Influencers, brands, and agencies are all potentially culpable for lack of transparency. If a celebrity influencer is found to be violating trust by not disclosing, fines can exist.

b) All endorsements fall under the realm of commercial speech — such speech violates FTC Act only if it is deceptive. As with Aussie law, this means that all parties involved should ensure that the review is impartial as possible (not written by brand/agency) and is factual: devoid of false claims.

c) No one really knows the preferred method of disclosure on social as FTC has not clearly indicated whether #spon #ad styled tags will be sufficient. In their posted opinions, sometimes this is appropriate, and sometimes it is not. The litmus test for this appears to be on whether the end user is recognising and can say with certainty that the post is an ad versus organic posting. When in doubt, over-disclose rather than under-disclose.

Data source: Tomoson

Suggestion for brands

Seeing as influencer marketing is legal in the major English-speaking countries provided above, and poses no ethical dilemma so long as disclosure is clear and consistent, the efficacy of this flavour of marketing alone points to a somewhat obvious decision: get started today, because your competitors might already be ahead of you.

Caliber provides Digital PR and outreach services for top brands — visit our site.

The information contained within this article was accurate in October 2016.