In the age of the macro-influencer, picture sharing sites such Instagram are flooded with images from celebrities giving us a secret glimpse into their luxury lifestyles. However, a recent report by Competition & Markets Authority (CMA) has claimed that many of these social media stars are being disingenuous about their motivations for sharing these photos as they are being generously compensated for their shares.
Now, don't get me wrong, I think we are all aware that celebs regularly get paid for endorsing products and are quite brazen about it (cue the Kardashians who charge a small fortune for a single tweet). However, is transpires that there are a growing number of the celebrity circle who are choosing to endorse products or services as a personal recommendation but not admitting that they have been rewarded for it (either monetarily or via 'gifts').
The law on such matters is very clear - the 'Consumer Protection from Unfair Trading' regulations state that if a person is being specifically remunerated to plug a product / service they have to make it clear to the consumer that this is the case. That said, how the guidelines on how they ensure that the consumer is made aware (e.g. some note indicating that the picture is an advert or is sponsored) are incredibly vague and as such are difficult to enforce.
Given this loophole, brands and celebrities alike have been keen to cash in on this very lucrative market. Having a follower base of over a million on Instagram gets advertisers fired up as they can easily see how they can exert a lot of status association for their brand by signing up these stars as ambassadors for their wares. And given the high cost of traditional forms of advertising and the potentially high wastage, the highly targeted appeal of 'influencer marketing' is becoming more appealing. As an indicator, Kylie Jenner was reported as being the highest paid celebrity influencer last year - just one post to her 124 million Followers on Instagram will cost a brand about $1 million USD.
Some of the highlighted Instagram ad transgressors included the likes of the singer / presenter Rita Ora who has endorsed anything from holiday resorts to private jets without it being made clear if these plugs have been paid for. Model Alexa Chung recently posted a selfie with her waxing lyrical about a pair of glittery Prada trousers, without making it obvious if she had been compensated for the picture and her comments (N.B. it may well be that these stars have not been rewarded for their posts, the point is that they haven't made it obvious whether that is the case).
According to the CEO of the CMA, Andrea Coscelli:
"People could, quite rightly, feel misled if what they thought was a recommendation from someone they admired turns out to be a marketing ploy. You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on."
So what do you think? Do you think it's fine for these celebs to make a fast buck as an influencer by flogging goods that they probably have little affiliation to apart from the money that they have been given to endorse them? Or do you think that we need better legislation to protect consumers from unscrupulous stars taking the money via advertisers and duping their followers into believing that they genuinely use these products? As ever I am keen to hear your thoughts...
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Steve is Global Media Lead - Nestlé at Mindshare. Prior to this role, he was the Managing Director - Global Accounts for OMD based in London / Paris leading Groupe Renault and CEO for OMD in Asia for 4 years based in Singapore. At OMD, he increased billings by +60% to over US$ 5bn and won 1000+ industry awards including agency network wins at the Cannes Lions (2013) and Festival of Media Asia (2013). He was named by LinkedIn as a 'Top 10 Writer' for 3 consecutive years (15/16/17). His first book 'How to be a Top 10 Writer on LinkedIn' is a Best Seller on Amazon. Steve holds a Bachelor in Psychology from Liverpool University.