Written evidence submitted by Rupa Shah of Hashtag Ad Consulting Ltd

Introduction

Hashtag Ad Consulting is a London-based advertising consultancy that provides guidance and training on the advertising rules to social media and influencer marketers. Founded by Rupa Shah in 2017, Hashtag Ad Consulting takes a unique approach to demystifying advertising regulations across the globe and Rupa has worked closely with influencers, ad agencies and top brands to embed compliance throughout the marketing process and, ultimately, to help brands and influencer marketers protect their reputation.

Prior to founding Hashtag Ad, Rupa trained in law and worked at the Advertising Standards Authority for 13 years, where she developed a keen understanding of the regulatory regime for advertising through her investigative, advisory and compliance roles. Now a member of the Committee of Advertising Practice’s Promotional Marketing & Direct Response Panel, Rupa maintains a close relationship with global advertising regulatory bodies and has spoken at numerous international conferences on the subject of influencer marketing ethics and compliance.

Executive Summary

• Many reputable brands and digital agencies are keen to understand and work within the current regulations for influencer marketing (CAP Code and Guidance), as evidenced by the regular training and workshops conducted by Hashtag Ad Consulting.
• Negative publicity from TV documentaries, BBC exposes and sting operations etc has led to the term “influencer” being associated with unscrupulous celebrities and fake followers so many prefer to use “content creator” instead.
• Tech companies provide user-friendly tools for content creators and brands to create branded content but do not necessarily ensure that they are used consistently or take swift action when their own platform rules are broken.
• Awareness amongst consumers of influencer marketing is growing but certain techniques such as affiliate marketing are less well understood and educational initiatives are required to address the consumer knowledge-gap.

Our Response

We have focused our response on the final 3 questions posed by the Committee.

Is it right that influencers are predominantly associated with advertising and consumerism, and if not, what other roles do influencers fulfil online?

1. We would agree that the term “influencer” is now heavily associated with advertising and consumerism and is one of the reasons many prefer to use the more descriptive term “content creator”.
2. Before the commercialisation of social media content, the primary purpose of posting was varied but would have included to communicate information, ideas, build communities, educate and learn from like-minded peers etc. Most successful content creators will still focus on these aims and will have engaged followings that enjoy and respond to that content.
3. The commercial aspect of partnering with brands is certainly a benefit, but not necessarily the primary aim for all content creators. Many digital-first content creators i.e. those that created a following on social media rather than becoming popular or famous through alternative means, do treat their channel/s as a business but are as conscientious about following rules and regulations and not misleading their audience as any other traditional business.
4. Most news stories and TV documentaries that focus on content creators focus on the problems with the industry: fake followers, ASA rulings, unethical products etc. There is very little positive coverage in the mainstream media.
5. There are countless closed groups on the various social media platforms where content creators share tips for best practice, discuss ASA rulings and encourage compliance with industry rules. These rarely get discussed as the media focus is generally on the small number of reality TV and celebrity influencers that consistently break the rules.
6. Hashtag Ad Consulting has judged entries at an influencer awards and we were impressed at the focus on compliance and transparency. It was imperative to the awards organisers that all winners should have an outstanding compliance record with the ASA.[1]
7. Influencers in the business world who promote B2B content are less likely to be associated with advertising and consumerism and provide excellent examples of how social media “influence” can be used to promote thought-leadership and specialist insights.

How are tech companies encouraging or disrupting the activities of influencing?

1. Tech companies have adapted to the increasing monetisation of content by facilitating the connections between brands and content creators and providing both with additional resources to monitor and analyse the success of an influencer campaign. These “paid promotion” or “branded content” tools are available on most of the established tech platforms such as Instagram and YouTube.
2. Paid promotion tools are relatively simple to use but e.g. Instagram requires the content creator to tag the brand and the brand to accept the tag before the post is published, which can cause delays. The benefit to consumers if a brand and content creator use this tool is that a “Paid Promotion” label appears at the top of the ad, thereby identifying it as a commercial communication and not an organic post.
3. An issue that some content creators have raised with Hashtag Ad is that not all brands are willing to use the tool on Instagram, despite that being in breach of Facebook/Instagram’s branded content policy.  And as stated above, often they will delay authorising a tag meaning the content creator cannot post according to the agreed schedule.
4. In October 2020, Facebook Ireland Ltd, which operates Instagram in the UK, committed to a package of changes to tackle hidden advertising on Instagram. The aim of the CMA’s action was to make it much harder for people to post an advert on Instagram without labelling it as such. Clear labelling of incentivised posts is required under consumer protection law so that people are not misled.
5. Following these commitments, Hashtag Ad Consulting worked with Media Smart and Instagram to update their branded content guidelines and produce a range of resources aimed at helping children understand the commercial link between social influencers and the brands they may be promoting.

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?

1. The ASA conducted research into consumer’s understanding of the labels used to identify branded content in 2019 and it was reported that people struggle to identify when social media posts by influencers are ads.
2. That report is two years old which, in terms of social media progress, is a long time and it is our view, informed by our experiences with brands, agencies, influencers and tech platforms, that awareness and knowledge of branded content has increased considerably amongst consumers of all ages.
3. Labels such as #AD, AD, ADVERTISEMENT, PAID PROMOTION etc are becoming standardised across the industry. Content creators across multiple niches use these labels and, provided they are clear and prominent, are effective at communicating the commercial relationship between brand and content creator.
4. Affiliate marketing techniques seem to be less well-understood by consumers and the ASA research mentioned above suggested that the term “affiliate” was not well known or understood. The term relates to discount codes, hyperlinks, swipe-up features etc that enable content creators to be paid a fee by a brand when a consumer engages with a brand via their post.
5. Unfortunately, we do not believe there is a succinct label that captures this type of relationship accurately and can alert a consumer to the commercial relationship with a brand. “Affiliate” is still commonly used by content creators because of the lack of a viable alternative and in violation of CAP’s guidance.
6. One solution would be to educate consumers on the meaning of the term “affiliate” and, although the ASA/CAP would argue that educating consumers is not their role, this would be the most obvious route for improving consumer understanding and industry compliance with current regulations.
7. Targeting young people, not just because they are particularly vulnerable but because they also engage with a large amount of social media content, would also be beneficial. As we have noted above, there are organisations such as Media Smart which provide resources to enable young people to confidently navigate the media they consume including being able to identify, interpret and critically evaluate all forms of advertising.
8. Although there is not one single unified trade-body type voice for brands and agencies in the influencer marketing space, there are initiatives such as Klarna Bank’s Influencer Council[2], which was formed to create a best-in-class approach for advertising financial services and is currently developing a Whitepaper and guidelines for influencers and brands promoting financial services.