The Department for Digital, Culture, Media and Sport published its report today on the benefits and challenges for the UK influencer industry. Here's what the Report says in a nutshell:
Harassment, Diversity, Pay Disparity
Despite being perceived by some as a glamorous career, the Report picks up on harassment, diversity issues, pay disparities, and a pervasive lack of employment support and protection for influencers.
It highlights the significant trolling and online abuse faced by influencers, in particular female influencers. The Report states that Ofcom must raise the standards set by platforms to tackle online harassment and specifically recommends that the Government add to clauses 17 and 18 of the Online Safety Bill a requirement that reporting and complaints mechanisms, as outlined in new codes of practice created by Ofcom, must be tailored to the specific nature of various types of harms.
In relation to diversity and pay disparity, the report recommends that the Government conducts or commissions a market review into the influencer ecosystem, covering the scope of influencing work, the composition of the community, employment challenges and revenue streams.
Despite the significant returns that influencer culture brings to the UK economy, the industry has not yet been afforded serious consideration by Government.
The Report acknowledges influencers can offer targeted and effective marketing services because they are often leaders of niche communities.
Influencer marketing is therefore offering a lucrative opportunity for brands and advertisers as well as influencers.
The Report also recommends that the Government commission an industry partner to develop a code of conduct for influencer marketing alongside relevant stakeholders. The Government should then promote this code as an example of best practice for deals between influencers and brands or talent agencies.
The Report is critical of the Competition and Markets Authority and Advertising Standards Authority's ability to effectively regulate this industry and recommends updates to their enforcement powers to prevent further damage to consumer trust. It points to various evidence showing low rates of compliance with advertising regulations.
The rapid expansion of this marketplace, both in scale and in technical innovation, has outpaced the capabilities of UK advertising regulation.
The fact that the ASA's remit extends only to posts where there is both payment and editorial control by a brand is described as a "loophole" by which e.g. gifted relationships avoid ASA regulation and both the CMA and the Report recommend that the CAP code be extended by removing the requirement for editorial ‘control’ to determine whether content constitutes an advertisement.
The Report picks out the potential for virtual influencers to mislead consumers and recommends that the Advertising Standards Authority introduce a requirement to the UK Code of Non-broadcast Advertising (CAP Code) for virtual influencers to be watermarked.
The Report supports the request of the CMA for greater powers to enforce consumer protection law. This includes the ability to make decisions directly without the need to go to court, and the stronger powers to enforce compliance, including turnover-based fines for frustrating enforcement procedures of breaking the law. 86. It also recommends that the ASA be given statutory powers to enforce the CAP Code. These powers should be considered as part of the Government’s upcoming Online Advertising Programme. Appropriate funding arrangements should also be considered to ensure that the ASA is able to act effectively on these enforcement powers.
In addition, the Report recommends that the ASA and CMA report yearly to Government outlining the scope, capabilities, and risk management protocol for their monitoring technology as it develops.
Social Media Platforms
The CMA told the DCMS Committee "that the platforms should take appropriate proactive steps to encourage and enable compliance, monitor compliance, and tackle non-compliance. However, they are failing to meet these responsibilities". In response, the Report recommends that the CMA report to the Committee on the progress, costs, and results of their 2020 Facebook Ireland Ltd. undertakings and should also provide updates on their progress securing undertakings from other social media platforms.
Children, both as influencers and consumers of influencer content, raise serious concerns.
Just as influencers can powerfully convey positive messages, they can also become conduits for harmful messages
Unrealistic beauty ideals, leading to mental health issues, such as body dysmorphia, depression and eating disorders are of particular concern and the Report places emphasis on greater media literacy and education for children.
In terms of advertising literacy, the Report strongly recommends that the ASA update the CAP Code to include mandatory enhanced disclosure standards for advertisements targeted to children or an audience composed predominantly of children.
The current advertising regulations do not appropriately consider children's developing digital literacy and child labour protections do not encompass user generated content and, as such, child influencers may be at risk of exploitation. The Report recommends that the Government urgently addresses the gap in UK child labour and performance regulation that is leaving child influencers without protection.
We recommend that this be achieved through comprehensive new legislation in order to adequately address the complexities of the influencer industry. This should include provisions on working hours and conditions, mandate the protection of the child’s earnings, ensure the child’s right to erasure, and bring the child’s labour arrangements under the oversight of local authorities.
If you want help unravelling the rules and regulations on disclosure, contact influencer marketing regulatory expert Rupa Shah at Hashtag Ad Consulting.