Instagram stars who advertise outside the rules

Instagram can be a valuable tool for companies to market their products. Getting a celebrity to endorse a product on Instagram is much cheaper than organising an expensive photo shoot and it can reach significantly more people than traditional advertising.

However, those businesses proposing to do this need to be careful not to fall foul of the Competition and Marketing Authority (CMA) rules.  These rules state that Instagram stars must make it clear in the captions to their photos that they contain advertising. This can be done by using hashtags such as ‘#ad’ or ‘#spon’. However, not all marketers are complying with these rules.

On 11 August 2016 the CMA published an open letter to businesses who market their products through online endorsements using Instagram stars. They were asked to make it clear when a post contains paid-for advertising, as opposed to a genuine opinion of an Instagram star. If they do not do this then marketers could face both civil and criminal action.

The CMA has sinced stated that they will continue to carry out investigations and have not ruled out further action against the businesses that have already done this.

The CMA’s new, tough, approach to influencer marketing is likely to make social media influencers and brands more cautious when it comes to social campaigns.

If you would like more information on this topic or a related topic, please contact the Corporate and Commercial team.