A new industry standard for influencer marketing: ISBA launches new Code of Conduct

On 14 September 2021, the Incorporated Society of British Advertisers ("ISBA") launched a Code of Conduct for influencer marketing (the "Code") aimed at raising standards, addressing negative issues surrounding the sector and making it more transparent for consumers.

In the UK there has been increasing regulatory activity around influencer marketing, both by the Competition and Markets Authority ("CMA") and the Advertising Standards Authority ("ASA"), much of which has focused on ensuring that influencer marketing is subject to the same degree of transparency and consumer protection as is applicable to more traditional forms of advertising.

The Code responds to a growing focus on industry specific regulation. It follows recent concerns such as the ASA's crackdown on the flouting of disclosure rules by influencers earlier this year (which we reported here), the safeguarding of influencers (including racial disparity in influencer pay) and difficulties in measuring the return on investment, amongst other issues.

In parallel, on 26 March 2021 the Department for Digital, Culture, Media and Sport ("DCMS") Committee also launched an inquiry to examine the power of social influencers, how the influencer culture operates and the effect of the absence of regulation on promoting products or services on social media, aside from the existing policies of individual operators (the "DCMS Influencer inquiry"). The DCMS Committee will consider the need for regulation in this area and, if regulation is considered necessary, what form it should take. While the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) ("CPRs") and the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing ("CAP Code") are the primary instruments that regulate the use of influencers in marketing, there is currently a lack of targeted regulation in this area.

Designed by stakeholders in the industry (including representatives from talent agencies and a group of influencers), the Code is not a binding legal instrument but it does aim to fill this gap by being used as an industry standard of best practice.

Brands and influencers are able to append the Code to their agreements, with potential to translate it into binding legal obligations as well. Several major UK brands (including Britvic, Entain, LG, L'Oreal, Made, Paddy Power Betfair, PepsiCo, Specsavers, and Tesco), talent agencies and influencers have already agreed to adhere to the Code. The ISBA also maintains template Influencer Contracts which are due to be updated to reflect the Code in the course of next year.

The Code consists of forty points of best practice for the three key stakeholders: (i) brands and advertisers; (ii) talent agencies; and (iii) influencers, respectively. To this extent, the Code sets out the following five objectives:

1. to ensure compliance with regulatory regimes imposed by ASA, the CMA and CAP/BCAP codes;
2. to raise standards of conduct in influencer marketing;
3. to improve the relationship and align values between advertisers/brands, talent agencies and influencers;
4. to enable advertisers to employ authentic and effective influencer marketing; and
5. to deliver the transparency that consumers expect and deserve.

We summarise the key obligations from the Code for each stakeholder below.

Summary of key obligations:

Commentary

One of the key pull factors of influencer marketing is the ability of influencers to personalise the consumer's experience and brands are increasingly relying on influencers to broaden their reach. As a means of self-regulation by the industry, the Code is an important step towards setting standards for the use of influencers for marketing. In particular, the Code bolsters existing disclosure obligations relating to consumer protection set out in the CAP Code, CPRs and CMA guidance.

As a non-binding instrument, brands still retain full control and flexibility in relation to what they agree as part of their influencer contracts. However, ensuring sufficient consumer protection through disclosure requirements for the labelling of ads and the safeguarding of the influencer's unique and honest voice is likely to lead to a sustainable growth of influencer marketing. Not least because those stakeholders that sign up to the Code are able to demonstrate a commitment to accountability and, in turn, maintain brand credibility and consumer trust.

"Self-regulatory systems" tend to incorporate flexibility to keep pace with new technologies and advertising formats. As we await the outcome of the DCMS Influencer Inquiry, it remains to be seen whether self-regulation alone is sufficient to address the current concerns with the sector. Watch this space.