On 14 September 2021, the Incorporated Society of British Advertisers (“ISBA“) launched a Code of Conduct for influencer marketing (the “Code“) aimed at raising standards, addressing negative issues surrounding the sector and making it more transparent for consumers.

In the UK there has been increasing regulatory activity around influencer marketing, both by the Competition and Markets Authority (“CMA“) and the Advertising Standards Authority (“ASA“), much of which has focused on ensuring that influencer marketing is subject to the same degree of transparency and consumer protection as is applicable to more traditional forms of advertising.

The Code responds to a growing focus on industry specific regulation. It follows recent concerns such as the ASA’s crackdown on the flouting of disclosure rules by influencers earlier this year (which we reported here), the safeguarding of influencers (including racial disparity in influencer pay) and difficulties in measuring the return on investment, amongst other issues.

In parallel, on 26 March 2021 the Department for Digital, Culture, Media and Sport (“DCMS“) Committee also launched an inquiry to examine the power of social influencers, how the influencer culture operates and the effect of the absence of regulation on promoting products or services on social media, aside from the existing policies of individual operators (the “DCMS Influencer inquiry“). The DCMS Committee will consider the need for regulation in this area and, if regulation is considered necessary, what form it should take. While the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (“CPRs”) and the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (“CAP Code“) are the primary instruments that regulate the use of influencers in marketing, there is currently a lack of targeted regulation in this area.

Designed by stakeholders in the industry (including representatives from talent agencies and a group of influencers), the Code is not a binding legal instrument but it does aim to fill this gap by being used as an industry standard of best practice.

Brands and influencers are able to append the Code to their agreements, with potential to translate it into binding legal obligations as well. Several major UK brands (including Britvic, Entain, LG, L’Oreal, Made, Paddy Power Betfair, PepsiCo, Specsavers, and Tesco), talent agencies and influencers have already agreed to adhere to the Code. The ISBA also maintains template Influencer Contracts which are due to be updated to reflect the Code in the course of next year.

The Code consists of forty points of best practice for the three key stakeholders: (i) brands and advertisers; (ii) talent agencies; and (iii) influencers, respectively. To this extent, the Code sets out the following five objectives:

  1. to ensure compliance with regulatory regimes imposed by ASA, the CMA and CAP/BCAP codes;
  2. to raise standards of conduct in influencer marketing;
  3. to improve the relationship and align values between advertisers/brands, talent agencies and influencers;
  4. to enable advertisers to employ authentic and effective influencer marketing; and
  5. to deliver the transparency that consumers expect and deserve.

We summarise the key obligations from the Code for each stakeholder below.

Summary of key obligations:

1. Brands and Advertisers
Key considerations before contracting with influencers
  • to provide clear guidance to influencers and talent agencies about the company’s values, approach to advertising, and expectations of influencers’ behaviour, ahead of contracting or being matched with marketing partners
  • to refrain from working with influencers seeking to artificially inflate their following or pay engagements
  • to be transparent about the brand’s commitment to diversity and inclusion
Working with influencers
  • to ensure influencers understand the brand, its objectives (including any key performance indicators), audience and to agree a programme of work
  • to safeguard the influencer’s independent, honest and authentic views and maintain a collaborative approach
  • to adhere with disclosure requirements including in relation to the #ad label
  • to explain how influencers’ content will be used (including where it will be posted, how often and for how long)
  • to respect the relationships influencers may have had with competing brands (including exclusivity agreements)
  • to adhere to payment deadlines and be clear on fees and payment processes
Responsibilities
  • to carry out due diligence when selecting influencers to meet regulations on protecting vulnerable groups, and to identify and address any misalignment of values or reputational difficulties related to either the influencer or the brand (including historic comments)
2. Talent Agencies
Distinct role as gatekeeper
  • to act as a “gatekeeper” of the agreement between the advertiser and influencer, with distinct obligations to the influencer (e.g. dealing with co-ordination of approvals, timing of services, receipt of payment)
  • to ensure influencers provide deliverables as set out in the brand’s brief and that they meet legal and disclosure requirements
  • to safeguard influencers’ wellbeing and strive to match brands and influencers whose values align
Promoting transparency
  • to ensure influencers meet their obligations in relation to vulnerable groups, disclosure requirements and exclusivity arrangements
3. Influencers
Trust and Integrity
  • to refrain from sharing views or engaging in behaviour (in both their professional and personal lives) which could be interpreted as racism, anti-Semitism, homophobia, misogyny, religious intolerance, violence, or extremism, bullying or aggressiveness towards other, pornography or any criminal activity
  • to immediately inform the brand of any content or behaviour involving the above, which does not align with the brand’s values or which could damage the reputation of the brand
  • to refrain from artificially inflating the number of followers or engagements
Content
  • to collaborate with brands while maintaining their unique voice and an honest and authentic point of view
  • to adhere to the brand’s pre-approval process for content
  • to obtain the necessary licences or avoid using licensable third-party content
Compliance with regulation
  • to meet disclosure requirements such as using the #ad label (as opposed to alternatives e.g. #spon) and make it immediately visible to consumers
  • to refrain from using filters or editing techniques to give misleading impressions of products (as prohibited by ASA)
  • to reasonably avoid the inclusion of bots among followers
Audience
  • to be transparent about their demographic (including the percentage of children and minors)
  • to feedback on engagement results, metrics, comments and outcomes of the deliverables to brands, enabling them to assess return on investment

Commentary

One of the key pull factors of influencer marketing is the ability of influencers to personalise the consumer’s experience and brands are increasingly relying on influencers to broaden their reach. As a means of self-regulation by the industry, the Code is an important step towards setting standards for the use of influencers for marketing. In particular, the Code bolsters existing disclosure obligations relating to consumer protection set out in the CAP Code, CPRs and CMA guidance.

As a non-binding instrument, brands still retain full control and flexibility in relation to what they agree as part of their influencer contracts. However, ensuring sufficient consumer protection through disclosure requirements for the labelling of ads and the safeguarding of the influencer’s unique and honest voice is likely to lead to a sustainable growth of influencer marketing. Not least because those stakeholders that sign up to the Code are able to demonstrate a commitment to accountability and, in turn, maintain brand credibility and consumer trust.

“Self-regulatory systems” tend to incorporate flexibility to keep pace with new technologies and advertising formats. As we await the outcome of the DCMS Influencer Inquiry, it remains to be seen whether self-regulation alone is sufficient to address the current concerns with the sector. Watch this space.

Hayley Brady
Hayley Brady
Partner
+44 20 7466 2079

James Balfour
James Balfour
Senior Associate
+44 20 7466 7582

Claire Wiseman
Claire Wiseman
Professional Support Lawyer
+44 20 7466 2267

Asmita Singhvi
Asmita Singhvi
Associate
+44 20 7466 3697

Sara Lee
Sara Lee
Trainee
+44 20 7466 2942