The CAP Code requires that all marketing communications within the categories of communication outlined in the scope of the Code – which includes online and social media – are obviously identifiable as advertisements, and must not falsely imply or claim that the marketer is acting as a consumer. It also provides that any commercial intent must be clear, if that is not obvious from the context.

Editorial Content or Advertisement Feature?

An influencer or vlogger is deemed to publish an advertisement feature if the content:

  • is controlled by the marketer/brand and not the influencer; and
  • is written or posted in exchange for payment (either monetary or free items).

If the content falls under the definition of an advertisement feature then it must be labelled as such with the appropriate hashtag (#ad, #advertorial or #advertisement).

Generally, when influencers create editorial content in whatever type of media, the assumption of CAP is that any mention of a brand is an independent decision of the influencer as the publisher. Therefore, if there is a commercial relationship in place between the influencer and the brand featured, and the test above is satisfied, this needs to be made clear so that consumers are not confused or misled about whether the post is advertising (i.e. a marketing communication promoting the brand) or editorial (i.e. the influencer’s independent opinion). In addition, CAP requires that advertisement features are immediately recognisable as such, prior to the consumer engaging with the content.

The Guidance

CAP describes “affiliate marketing” as a type of performance-based marketing, where an affiliate (the influencer) is rewarded by a business (the brand) for each new customer attracted by their marketing efforts, usually with a pre-agreed percentage of sale(s). Influencers with hundreds of thousands (or even millions) of followers are desirable targets for brands wanting to promote their products to large, diverse audiences.

Some forms of affiliate marketing are obviously identifiable because of the nature of the medium (e.g. banner ads, branded emails etc.). Others, such as social media posts, vlogs and blogs, are not always so clear. Whilst it is possible that the wider context and overall presentation make clear that the influencer has a commercial relationship with respect to the promoted products, it may not be clear in all cases, particularly where the individual concerned generally creates non-commercial content, or where the overall impression is of editorial independence. CAP requires some form of additional disclosure in such instances to ensure that the affiliate content is obviously identifiable as a marketing communication.

Both the brand and the influencer are responsible for compliance with the CAP Code, even if the advertisement has been created solely by the affiliate influencer rather than the brand.

Similarly, as primary responsibility for observing the CAP Code falls on marketers, promotions run by influencers which do not comply with the Code will be problematic.

CAP guidance provides various recommendations for ensuring that affiliate marketing is obviously identifiable in different scenarios. For example:

Vlogs:

Where the content of a vlog wholly concerns affiliated products and is entirely directly connected to the supply of those products, the commercial nature of the content must be made clear prior to consumer engagement.

If only some of the links to products are affiliate links and/or not all of the content is directly connected to the supply of those products, it is unlikely that a general identifier, such as “Ad” would be required in the title, but content which relates to affiliated products (and the links) should be obviously identifiable as advertising.

Vloggers are free to highlight their advertising content however they wish, provided that it is obvious (prior to engagement) which specific links and associated content are advertising; they may include on-screen text when talking about affiliated products, or could explain to viewers which parts of the content are advertising. Vloggers must also make clear in the description of the video which products or links are advertising. For example, a beauty vlogger who posts a makeup tutorial using a variety of products, some of which they have been paid to feature, should ensure that it is clear in the description box of the video which products they have been paid to advertise and/or for which they will receive commission based on consumer traffic to that brand’s website through the linked description.

Social Media Posts:

Social media posts which include affiliate links should be obviously identifiable as advertising. If all of the links in a post are affiliate links, the social media post should include an identifier at the beginning of it.

If only some of the links in a post are affiliate links, it needs to be obvious which links and associated content are advertising. The relevant links may be marked “Ad” or, depending on the length of the post, asterisks may be used adjacent to the advertised products with a clear statement at the beginning of the post that those asterisks relate to advertising or advertised products.

CAP guidance urges affiliates and brands to consider the idiosyncrasies of different platforms when labelling advertised products. On platforms such as Instagram, where only an image is initially visible, an identifier should be included on the image itself, or at least predominantly on the image’s description, without requiring consumers to expand and scroll down a large number of hashtags. As the number of characters is currently limited to 140 per tweet on Twitter, labelling the content with ‘Ad’ or similar is likely to be the clearest and shortest way of identifying it as advertising.

The CAP note also provides guidance for blogs, news sites and voucher sites.

Exploiting the Loophole

Influencers are set to drive advertising and the promotion of brands’ products for the foreseeable future.

Whilst the CAP guidance seeks to clarify brands’ and influencers’ obligations in relation to affiliate marketing and genuine advertising arrangements, there remains a grey area in relation to non-paid for product placement and product placement with no express editorial control.

Influencers are often gifted products by brands. Whilst this fulfils the ‘written or posted in exchange for payment’ criterion for classifying content as an advertisement, if brands do not stipulate the content which the influencers are to post, or even expressly ask influencers to post about the products, then CAP does not have remit over such posts. In such circumstances, influencers are not subject to the labelling requirements imposed by the CAP Code. Indeed, our clients tell us that they are noticing less consumer engagement with content which is labelled as an advertisement feature. They therefore often choose to rely on influencers’ inclination to feature gifted products of their own accord, without editorial input from the brand. Influencers are inevitably incentivised to feature and positively review products in the hope that they will receive more products from that brand if they feature it in their media.

CAP understands that the Competitions and Market Authority would expect influencers and affiliates to give a nod to any commercial relationship they have with a brand, whether or not the content constitutes an advertisement (as categorised by the CAP Code). However, there is currently no statutory requirement to do so, and so many influencers choose not to in order to give the content greater authenticity.

This is an area in which we expect to see tighter regulation in the next few years, but, in the meantime, businesses can continue to exploit what appears to be a significant loophole in order to engage as many consumers as possible with their brand and products.