Written evidence submitted by the Advertising Association
Advertising Association’s Response to the DCMS Select Committee’s Influencer Culture inquiry
About the Advertising Association
- The Advertising Association promotes the role and rights of responsible advertising and its value to people, society, businesses and the economy. We bring together companies that advertise, their agencies, the media and relevant trade associations to seek consensus on the issues that affect them. We develop and communicate industry positions for politicians and opinion-formers, and publish industry research through advertising’s think-tank, Credos, including the Advertising Pays series which has quantified the advertising industry’s contribution to the economy, culture, jobs and society.
- The membership of the Advertising Association is very broad and includes the associations representing industry sectors, such as the advertisers (through ISBA), the agencies and advertising production houses (through the IPA and APA), all the media (from broadcasters and publishers, cinema, radio, outdoor and digital), advertising intermediaries and technology providers (through IAB), market research (through MRS) and marketing services such as direct marketing (through the DMA) and promotions.
- Advertising is important. It plays a crucial role in brand competition, drives product innovation and fuels economic growth. Many industries such as arts, sport and culture depend on it for their revenues and it also funds a diverse and pluralistic media enjoyed by consumers of all ages, including children and young people.
- Advertising is a driver of economic growth and competition. We have estimated that every pound spent on advertising returns £6 to GDP through direct, indirect, induced and catalytic economic effects. Advertising spend will be over £23.5 billion in 2020, which we estimate, results in £141bn to GDP, supporting 1 million jobs across the UK.
- According to Deloitte research carried out on behalf of the Advertising Association, the one million jobs supported by advertising can be broken down as follows:
- 350,000 jobs in advertising and the in-house (brands) production of advertising;
- 76,000 jobs in the media sectors supported by revenue from advertising;
- 560,000 jobs supported by the advertising industry across the wider economy.
- As reported in Advertising Pays: UK Advertising’s Digital Revolution, advertising’s contribution to the economy topped £138 billion in 2018 in the UK. Online advertising accounts for 57% of that amount and is predicted to grow to a 62% market share by 2020. The ad-tech sector, which provides digital tools and services for the advertising industry, comprises more than 300 UK-headquartered companies, with over £1bn invested in this sphere since 2013. This means the UK is now the largest online advertising market in Europe and third in the world behind the US and China.
- Please contact Konrad Shek for further information on any of the points raised in this submission.
- Influencers and influencer marketing is an increasingly important part of the marketing mix for advertisers and brands. Their appeal is due to their diversity, authenticity and ability to engage with their audiences. We argue that advertising through influencers can be used to satisfy or fulfil a specific niche for example vegan food, specific fashion tastes, mothers, and travel.
- Media depictions tend to oversimplify the role of influencers as being narcissistic reality TV stars but they are in fact a diverse community of content creators, activists, educators, experts, sports personalities, actors, and political figures.
- Influencer culture is harder to define as it is constantly evolving, however it is true to say that there are positive and negative impacts of influencers on popular culture. Some of the positive effects of influencers is the work they do on social causes and the creation of educational content. On the negative side - the pursuit of viral content can drive extreme behaviour and they may unduly affect vulnerable groups.
- There is already regulation of influencer marketing via the Advertising Standards Authority (ASA) and Competition & Markets Authority (CMA) but we agree that more work could be on raising awareness of the rules and creating better controls on social media platforms. These controls could also be better served by correctly incentivising behaviours. Trade associations are already leading the way by providing guidance and advice to members to increase transparency.
- Additionally, media literacy can help younger audiences to critically evaluate media and discern when influencers are promoting commercial messages. Media Smart, an award-winning not-for-profit organisation funded by the advertising industry, has successfully developed influencer-related educational resources for school age children and most recently published a new module in February this year.
How would you define ‘influencers’ and ‘influencer culture’? Is this a new phenomenon?
- The concept of influencers and the act of influencing has been around for some time. Pre-social media, journalists, and industry analysts were also prominent influencer categories, especially from the perspective of marketing departments. Often, significant resources were poured into these categories with the objective of securing favourable press coverage.
- Modern day influencers are a diverse community of content creators, activists, educators, experts, sports personalities, actors, and political figures. With each technology iteration, we have seen the emergence of new generations of bloggers, vloggers, instagrammers and podcasters.
- Fundamentally, an influencer can be defined a key individual with an extensive network of contacts, who plays an active role in shaping the opinions of others within some topic area, typically through their expertise, popularity, or reputation.
- An influencer can also be described as an opinion leader. Politicians such as ex-US President Donald Trump clearly has power to influence political debate, and climate activist Greta Thunberg was named on the 2019 Time 100 list of most influential people.
- Some argue that the term influencer is unfair to their audiences as it implies that they are unable to exercise individual choice. There is some logic to this argument. Although influencers can be recommended, choosing to follow an influencer does require an active choice and often the motivations for following an influencer are usually driven by shared interests, entertainment value, a desire to seek authenticity or inspiration. But once this connection is made there is evidence of a halo effect, a form of cognitive bias, which can explain to some extent the influencing power of influencers. In other words, if an influencer is viewed positively, this can positively affect the evaluation of that influencer’s actions, qualities or characteristics.
- Internet influencers emerged during the formative years of Web 2.0, an evolution of the internet which emphasised user-generated content. The impact and influence of a growing group of independent creators was having on their audiences and their ability to drive internet traffic was being noticed by those who understood its commercial potential.
- In 2001, Bickart & Schindler published research documenting how consumers who gathered information from online discussion, which were typically web forums and online bulletin boards, showed greater interest in the product topic than those who obtained information from marketing generated sources. It was not long after that early marketing pioneers reached out to message board moderators and internet celebrities to share brand content in exchange for gifts. In 2006, PayPerPost was launched. This was the first platform to pay bloggers for content for brands and hence modern influencer marketing was born.
- Influencer marketing can be defined as the strategy of promoting brands, products, or services with selected individuals who are judged most likely to exercise a significant influence on purchase decisions within a particular target market. Such influencers can help amplify brands online. By some estimates the global influencer marketing industry could reach USD15 billion by 2022 and it is seen as an important consideration in any marketing strategy.
- Influencer marketing has often been compared to word-of-mouth marketing. This is significant because according to Nielsen research, the most credible advertising comes straight from the people we know and trust. 83% of global respondents said they completely or somewhat trusted the recommendations of friends and family. However, where influencer marketing differs from traditional word of mouth is that it does not always involve explicit recommendations. By this we mean, influencers do not always post content that is paid for. Often, they focus more of their time building their own brand and create familiarity with followers.
- Despite, some people casting derision over the idea of influencing as being a legitimate form of employment, surveys suggest that approximately a half are professional influencers and approximately a fifth regard it as their main source of income. Influencers are no different from self-employed workers, in that revenue can be uneven and does not come with the protections of permanent employment. Invoices can be unpaid for months, influencers can sometimes feel coerced into onerous contracts, and there is evidence of influencer pay gaps.
- The quantity of influencers mean that it is a competitive landscape and to develop relevant and inspiring content requires hours of dedication and many are not successful. The reality is that the distribution of influencers resembles a Pareto power-law distribution, the 80-20 effect, whereby a small minority command the highest fees and have an outsized impact on the rest of the influencer population.
- Influencer culture is somewhat harder to define as it is complex and constantly evolving. There does not appear to be an agreed definition of influencer culture and definitions that do exist are skewed by perceptions of what an influencer means to them (this is another example of the halo effect: if influencers are generally viewed negatively then then so will influencer culture, and vice versa).
- We would argue that influencer culture, as a process, is not that much different from other types of mass media influencing culture. It is widely accepted that media can affect society in positive and negative ways. In trying to understand and describe influencer culture we observe the following:
Positive effects of influencer culture
- Diverse content creation and co-collaboration.
- More inclusive aesthetics in advertising.
- The building of communities.
- The creation of new conversations around societal change such as the environment, body positivity, veganism, and sexual assault.
- The creation of functional, physical, and emotional-based education, for example DIY, fitness, or mental well-being.
- Drives extreme behaviour in search of viral content.
- Strongly associated with consumerism.
- Promotes narcissism and unachievable beauty standards.
- Can lower self-esteem or increase anxiety.
- Can unduly affect vulnerable groups.
- Ultimately, the intimate relationship between the influencer and their followers is a fickle and fragile one. Influencers must stay relevant, as a loss of authenticity and trust would spell the death knell of that influencer.
Has ‘influencing’ impacted popular culture? If so, how has society and/or culture changed because of this side of social media?
- Whilst the phenomenon of seeking fame and celebrity status is not new, with social media it gave ordinary people the opportunity to reach audiences that would have only been previously possible with the blessing of gatekeepers of other media such as producers or editors.
- Social media has however changed what it means to be a “celebrity”. Celebrity status is no longer confined to a limited number of media channels, neither does celebrity status need to meet certain audience thresholds. For example, nano-influencers may only have 1,000-10,000 followers and micro-influencers have followers numbering the range of 10K-50K. Moreover, appearing on TV is no longer a means to an end, it can be in fact a platform to launch a successful influencer career as many Love Island contestants have experienced.
- Whether it is fair to say that “influencing” is the sole factor in shaping popular culture is debatable. Firstly, we currently live in a politically liberal society intertwined with individualism and self-branding is encouraged with the promise of reward. Secondly, social media strengthens this narrative by tacitly promising fame and reward for those who can create popular content. Justin Bieber, who owes his music career to YouTube, is a great example of the potential reward.
- Surveys have demonstrated that millennials trust influencers more than traditional celebrities because they are more relatable and authentic. With younger generations, influencers arguably have an advantage over we would call traditional celebrities – in that influencers can cater to niche audiences and speak to the concept of individualism, whereas traditional celebrities try to appeal to many people. And it is that influencer diversity that has helped charitable causes, for example, to have higher profiles than what they would have ordinarily received. Who could forget the viral ALS Ice Bucket Challenge in 2014, where participants were challenged to pour a bucket of ice water over their heads? To complete the challenge a donation was made to the Amyotrophic Lateral Sclerosis (ALS) Association or the UK equivalent - Motor Neurone Disease (MND) Association.
- Whilst we come to terms over the effects of influencers on popular culture, longer term there is merit in understanding the development and impact of virtual influencers which are increasing in popularity. Virtual influencers are computer generated image (CGI) influencers and often use hyper realistic graphics. One of the more well-known virtual influencers Lil Miquela (@lilmiquela) has 3 million followers and has appeared in Calvin Klein and Samsung adverts. What is not known is to what extent that her followers are aware that she is a fictious entity. Whilst the use of animation is advertising is not new, there appears be little consideration of the ethical boundaries of these hyper realistic characters intersecting with AI and micro-personalisation.
Is it right that influencers are predominantly associated with advertising and consumerism, and if not, what other roles to influencers fulfil online?
- We argue that advertising through influencers is not inherently negative and can be used to satisfy or fulfil a specific niche for example vegan food, specific fashion tastes, mothers, and travel.
- Just as people would reject pushy salespeople, it can be damaging for influencers to overcommercialise as this will lower perceptions of authenticity. Influencers cannot take support for granted – at the end of the day users can curate their own feed by choosing who they follow and what they see online. From this perspective, the boundary of influencing and being influenced is not entirely clear. But what successful influencers are clearly good at is engaging strongly with their audience.
- It is somewhat unfortunate that modern-day influencers have become synonymous with social media and consumerism because this diminishes the diverse community that influencers represent. This negative perception is perhaps not helped by media depictions of influencers as being mostly attention-seeking reality TV stars. As such, the term “influencer” can carry negative connotations or be used in a derogatory way to mean someone who is narcissistic. The irony is that according to a UK top 100 influencer list compiled by The Sunday Times/CORQ , reality TV stars did not even make the list.
- That said, for influencers wanting to make this a full-time occupation (and in some cases this may be a necessity given the level of dedication for one person to manage all aspects of content production such videography, photography, image and sound editing, makeup etc) we think it is reasonable to generate an income to sustain this effort. Moreover, we believe it is not our place to comment on people’s career choices, because fundamentally we should all have the freedom to pursue the type of career we want.
- Although revenue can be an important consideration for influencers this is not the only motivation to become an influencer. Below we list examples of influencers promoting social causes:
- Manchester United footballer, Marcus Rashford (@marcusrashford 9.9m followers), used his social media platform to campaign against food poverty and lobby Government and MPs to provide free school meals to children during lockdown and summer holidays.
- Sarah Turner (@unmumsymum, 422k followers) started her blog in 2013 after becoming disillusioned with the parenting literature that she had found online.
- Joe Wicks (@thebodycoach 4.1m followers, The Body Coach TV 2.75m subscribers), During the lockdown in 2020, Joe started "PE With Joe" on YouTube to try to help children stay active whilst schools were closed. For this, he was awarded his MBE.
- Megan Jayne Crabbe (@bodyposipanda, 1.3m followers) blogs about body positivity - from intuitive eating, to bikini body confidence, to fatphobia and size prejudice, and is critical of the diet industry.
- Luke Ambler (@andymansclubuk, 20.6k followers). Luke started his blog after his brother-in-law Andy committed suicide. The group tries to remove the stigma of male mental health to reduce the rate of male suicides.
How aware are users of the arrangements between influencers and advertisers? Should policymakers, tech companies and influencers and advertisers themselves do more to ensure these arrangements are transparent?
- There has been social media disclosure guidance available to practitioners since around 2011, and the Advertising Standards Authority (ASA) has been adjudicating on social influencers' use of disclosure terms since 2012. There is extensive guidance for influencers from Committee of Advertising Practice Code (CAP) that exists on the ASA website.
- The CAP Code, enforced by the ASA, applies to most forms of influencer marketing. Section 2 of the code contains rules about how ads should be recognisable as ads, and Section 3 sets out rules that advertisers must follow to avoid misleading people. Both of which are relevant to influencer marketing. Additionally, consumer protection legislation, enforced by the Competition & Markets Authority (CMA), applies to influencer marketing. Under the Consumer Rights Act it is illegal for brands or individuals to post sponsored content without disclosing it.
- Both the ASA and the CMA advise using labels such as Ad, Advert, Advertising, Advertisement or Advertisement Feature, as these are easy for the consumer to understand. Labels like this can be used with or without a hashtag preceding it. A platform’s own disclosure tools, such as Instagram’s Paid Partnership tool, can also help to distinguish advertising from other content.
- However, it will be an enduring challenge to ensure that influencers are aware of the need to disclose when they are being paid (or paid in kind) to promote a good or service. Given the low barriers to entry into the influencer market, this will not be easy. The ASA have also reached out to influencers and influencer agencies repeatedly to get the word across – it has not always been taken on board, even by those who have been engaged or, worse, adjudicated against. In September 2020, the ASA undertook a three-week monitoring exercise to review the Instagram accounts of 122 UK-based influencers to assess whether advertising content was being properly disclosed. Out of 5,732 ads, they found that two-thirds were insufficiently labelled as ads which meant that compliance was disappointingly low.
- We note that the CMA has also been investigating the disclosure of paid-for endorsement on social media platforms and that as a result Instagram has committed implementing technology to detect non-compliant paid-for posts. Instagram will report users posting suspected unlabelled content to the businesses whose products they are endorsing allowing those businesses to take appropriate action swiftly.
- A major limitation of the UK regulatory approach is the discrepancy of how these rules are applied country to country. For UK-based influencers, this may seem unfair that they are required to abide by rules that their foreign counterparts may not be subject to, even though their content could be accessed by someone in the UK. This will, of course, require greater cooperation between national governments and regulators to ensure greater consistency across borders. Such channels of cooperation already exist between self-regulatory bodies. For example, the European Advertising Standards Alliance (EASA), the single authoritative voice on advertising self-regulation in Europe, works with many European national self-regulatory bodies including the ASA. EASA has published its own Best Practice Recommendation on Influencer Marketing to assist self-regulatory organisations in creating their own national guidance. The International Chamber of Commerce’s (ICC) Advertising and Marketing Communications Code, which forms the cornerstone of many national self-regulatory codes, was revised in 2018 to improve applicability to influencer marketing.
- Of course, advertisers have an important role in ensuring that they set out the expectation with influencers that they will uphold the CAP rules, just as influencers need to be aware of the rules themselves. One way to address this is to ensure that the correct incentives are built in, perhaps by contractual obligations, to achieve greater compliance. This effort will need to be matched with improved detection methods and effective enforcement of rules.
- It is worth noting that there are several influencer agencies working to professionalise the sector to ensure that issues such as transparency of audience, fraud, and disclosure are addressed. Additionally, there are intermediary technology companies that have emerged to address these issues too, and they often work with agencies and brands on campaigns.
- Trade associations have also played a leading role in providing guidance for members and have set up working group to discuss the latest trends. ISBA, for example, has published a series of guidance and advice for advertisers and brands. Late 2019 it formed an Influencers Working Group in response to the uptick in ASA caseloads concerning influencer ads and in addition to consistent feedback from their members that they were facing challenges around disclosure, reputational issues, and the way in which potential partnerships were being floated with them. The ISBA working group has also been developing a Code of Conduct for influencer marketing which the group envisages as a potential industry standard.
- Other examples of trade associations taking a proactive stance on influencer marketing include the DMA, which has published its top tips for working with influencers. IAB UK has also been working to encourage collaboration between companies operating at all stages of the influencer marketing supply chain through its Social Media Group, ensuring best practice for industry standards is shared.
- In addition to transparency, people could be better supported by initiatives that improve the understanding of influencer marketing. To that end, we are firm believers that media or digital literacy can play a role in helping people critically evaluate the media that they consume, and this can equally apply to influencers and influencer marketing.
- Media Smart is an award-winning not-for-profit organisation, funded by the advertising industry, that creates free media and digital literacy educational materials for schools and youth organisations as well as teachers, parents and carers. The rising number of influencers in young people’s lives prompted Media Smart to create a PSHE teaching resource for 11-14 year olds, the first of its kind to tackle this area of marketing. It helps young people to understand the commercial link between influencers and the brands they may be promoting and delivers this training through a series of informal and informative films made by real influencers. It also addresses the use of filters and the potential impact on body image.
- To date the educational resource have been downloaded 1,720 times, which increases month on month. For each download, the assumption is that it reaches between 60-120 students depending on the size of the school.
- Media Smart launched its most recent Influencer module on 7 February of this year. This module focussed on branded content on Instagram. Recent research conducted with young people indicated a strong interest in learning more about this form of marketing.
- Since the launch Facebook ads have reached 236,924 people, generating just over 9,700 webpage views.
- In September 2021, Media Smart will be adding further to its resources in this area with educational materials on TikTok co-created with young people themselves. Media Smart has also been supporting PSHE Association accredited body image and mental well-being resources for all age groups. These have been downloaded 9,500 times to date and has also received funding/support from the Government Equalities Office. These have seen a high demand during COVID-19 and will be promoted in cinemas when they reopen on 17 May.
- The concept of influencers and the act of influencing has been around for some time, but modern-day influencers are a diverse community of content creators, activists, educators, experts, sports personalities, actors, and political figures. Although influencers have become synonymous with social media and consumerism, they do fulfil a number of social roles.
- Self-regulation is very much evolving in this area and is a significant focus for EASA and the ASA. Some of the key challenges is to keep on top of the evolving influencer trends and how to reach the influencers effectively as there are low barriers to entry and many are typically self-employed individuals who sit outside the main system.
- Going forward it will be important to publicise CAP and promote education about the rules. Social media platforms, of course, play an important role and they have responsibilities to help detect non-compliance, enforcing their community standards and provide routes to recourse. Advertisers, as the provider of the financial incentives, have a key role in ensuring that they set out the expectation with influencers that they will uphold the CAP rules.
6 May 2021
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