Social media agencies have been warned that the Competition & Markets Authority (CMA) will not tolerate ‘hidden’ ads after finding one company was paying social celebs to promote goods and services without clearly stating the nature of the promotion.
An investigation into 19 marketing campaigns – devised by agency Social Chain – involved posts published on the accounts of 43 ‘social media personalities’ which reached 4 million followers.
It found that all campaigns were in breach of regulations because they were not easily identifiable as advertising.
CMA senior director for consumer enforcement Nisha Arora said: “Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such.”
Social Chain, which was founded in November 2014, claims to be Europe’s largest “influencer marketing” agency with clients including Just Eat, Spotify, Microsoft, Comedy Central and 20th Century Fox.
Rather embarrassingly Social Chain and its directors have now signed agreements with the CMA that it will not “design, draft, prepare or cause to be published editorial content which promotes a product but does not make clear that a trader has paid for the promotion”, in line with the Consumer Protection from Unfair Trading Regulations 2008.
This is the fourth probe that the CMA has undertaken in as many months aimed at maintaining consumers’ trust in what they read online in connection with shopping for goods and services.
In April, Starcom Mediavest and content marketing agency Tan Media were whacked by the CMA following an investigation into undisclosed advertising in online articles and blogs.
The CMA found both companies arranged for endorsements in online articles and blogs on behalf of MyJar, a short-term loan provider, without making it clear that they were advertising. This activity was carried out as part of their search engine optimisation (SEO) activities.
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