CMA launches probe into social media endorsements

stephanie davisThe social media celebrity endorsement gravy train could soon hit the buffers after the Competition & Markets Authority revealed it is investigating whether celebrities are making it clear enough when they are being paid to big up brands on the likes of Twitter, YouTube and Instagram.
The UK’s competition watchdog has written to a number of influencers, including household names, to question how they operate. These people, often with millions of social media followers, should make any commissioned posts immediately clear.
The regulator said it would name anyone found to be flouting the rules.
The CMA has not released the names of celebrities who have been contacted as yet, but a string of “endorsers” have been battered by the UK’s advertising watchdog, including former reality TV star Stephanie Davis (pictured), make-up blogger Sheikhbeauty, TV presenter AJ Odudu and Made In Chelsea TV star Millie.
The CMA said that celebrities could sway the shopping habits of millions of people. Consumer protection regulations state that anyone should make it clear in editorial content at first sight if they have been paid or rewarded in some way.
CMA senior director George Lust said: “It is really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand.”
However, according to a study by influencer marketing platform, ZINE, brands are squandering $2.02bn annually by paying top flight celebrities to promote their products with limited results.
Influencer marketing is currently valued at $5bn globally with 54% being spent on A-list celebrities. But the new study found that only 25% of consumers would consider buying a product that had been recommended by a celebrity with over 1 million followers, whilst half would be likely or very likely to buy something if it was promoted by someone with a smaller following who was perceived as being a specialist in that area.

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