This is a 4,400 word report and will take approx. 10-12 minutes reading time. Scroll down to read in full, or click on a section header to be taken directly to that section. Click [ ⬆︎ ] at the bottom of each section if you wish to return to the contents.

 

1. Introduction


Influencer relations is a hot topic in marketing and public relations but it’s an area fraught with confusion and complexity. As media has fragmented from print, to online and social media, influencers have emerged on every media, in every market.

The emerging but fast growing discipline has put marketing and public relations on a collision course between earned and paid media.

The opportunity for public relations is to work with these individuals to engage with their network, in the way we have traditionally with journalists. The challenge is that increasingly influencers charge to engage with brands to publish or co-create content.

The tension between earned and paid isn’t only a challenge for marketing and public relations practitioners. It has also led to influencers themselves breaching advertising and trading standards law.

The public relations industry has been slow to offer leadership to practitioners and influencers themselves. We’ve been here before with search engine optimisation (SEO), social media, and paid media.

In the UK influencer campaigns are governed by existing Advertising Standards Authority (ASA) and Competition and Markets Authority (CMA) laws. The goal of this #FuturePRoof project is to educate practitioners about influencer relations campaigns.

Industry experts highlight best practice for brands, agencies and influencers. That’s the first lesson of this project. Everyone involved in a campaign has a responsibility to adhere to relevant advertising and media law.

The second is the scale of the influencer market. The numbers speak for themselves. According to Market & Market the influencer market is currently estimated to £4.5 billion in 2019. There’s a growing need and opportunity for formal representation for influencers.

I hope you enjoy this latest report from #FuturePRoof. My thanks go to everyone who has contributed. Scott Guthrie and Stephen Waddington, the report’s co-authors, share valuable insight into this emerging market. Vuelio’s Jake O’Neill succinctly contextualises the opportunity for public relations, while Evershed Sutherland’s Andrew Terry provides an important legal perspective. Rupee Shah’s prompt that all practitioners should be aware of ASA and CMA rules is one everyone should adhere to.

Let us know what you think via the #FuturePRoof Facebook page or tweet us @WeArePRoofed.

 
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Sarah Waddington

Founder & Editor
#FuturePRoof 


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2. Executive Summary


The public relations industry lacks a voice around the governance for influencer marketing. It’s a challenging area of practice that sits between marketing and public relations, and earned and paid media.

The international influencer marketing market is expected to grow from £4.5 billion in 2019 to £18.4 billion by 2024, according to a report by Markets and Markets. That’s a growth rate of more than 30% a year.

Governance very much remains a work in progress. There were more than 16,000 complaints made about 14,000 online ads and social media posts last year according to the Advertising Standards Authority (ASA) and the Committees of Advertising Practice (CAP) Annual Report 2018.

This #FuturePRoof consultation paper aims to provide clear guidance for public relations practitioners and influencers.

“It’s vital that PR practitioners, alongside all other players in the influencer marketing industry, understand the scope and role of the advertising regulators and the basic laws and regulations around disclosure and this whitepaper provides an excellent starting point with its handy ASA rulings and contract advice.”

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Rupa Shah

Founder and Director of Hashtag Ad Consulting, a regulatory firm that provides guidance and training on the advertising rules to social media and influencer marketers.


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3. Media Change


Social web platforms from blogs to YouTube, and Instagram to Twitter have given rise to a new breed of influencers. Individuals have recognised the opportunity to create content and build an audience or community.

This is the story of the social web that has emerged in the last decade. The scale of these networks based on peer to peer relationships is compelling for brands.

Brands have been quick to spot the opportunity to engage with influencers and secure their endorsement and the reach of their network. Public relations has shifted from pitching journalists and traditional media to working with these individuals across all forms of media.

Influencers for their part have recognised their value in this relationship and the opportunity to partner with brands to create or share content on a paid basis as well as earned.

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4. What is an influencer?


The common perception of influencers is individuals on Instagram or YouTube flogging stuff. In fact the market is maturing and is far more nuanced.

Influence is often confused with popularity. But influence is the ability to shape or change a person’s opinion or behaviour. Similarly influence is often used interchangeably with advocacy but influence is not necessarily positive. Brands can suffer the effect of negative influencers just as much as from positive ones.

Selling is only one outcome of working with influencers. Other outcomes include brand awareness, crisis communications, employee advocacy, and social change.

The value exchange between an organisation and influencer is the driver of the relationship. It can be exclusive access to content, products and services, or financial remuneration.

Insurance provider Hiscox has created influencer and public figure protection as an insurance solution for individuals who live their lives in the public eye. It provides coverage against issues such as defamation, negligence and breach of advertising codes.

 

5. Characterising the influencer market

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Jake O’Neill
Senior marketing manager, Vuelio

The influencer marketing industry, while in its infancy, is evolving rapidly. This is largely due to the rise of social media channels, which provide new platforms for influencers to host content and reach their audience. Jake O’Neill explores the developing market.


5.1 Fast accelerating market

Since 2016, Vuelio has published the annual UK Bloggers Survey to understand how the market is changing and what’s driving these trends. In 2019, the survey was based on 787 responses from bloggers and influencers in the Vuelio network and saw another year-on-year increase in the number of professional bloggers, up from 34% to 51% in three years.

Even more striking is the fact that for 18%, blogging is now their current main source of income, up from 8% in 2016. We expect to see this trend continue as professional influencers are more established and brands and agencies are now more likely to work with them. The news that Estee Lauder is spending 75% of its not insignificant marketing budget on ‘digital social media influencers’, shows there is demand for this industry to grow.


5.2 Driving new revenue streams

Beauty and fashion businesses were quick to the market for influencers, with make-up tutorials on YouTube and get-the-look photography an easy and obvious way to collaborate with rising stars. Now though, one in five influencers cover lifestyle as their main topic, with fashion and beauty seeing a decline (-14%) as those that started in more specific niches have expanded to cover content across multiple topics such as fashion, beauty, travel, parenting and food and drink.

These are also the categories that demand the highest influencer pay; 17% of fashion and beauty influencers charge in excess of £1,000 per collaboration.

This year’s survey was the first to question payment, so while we don’t have a year-on-year trend we can safely assume that the rise in professional influencers has impacted the amount and volume of payments. This year’s survey revealed that 78% of influencers are compensated for up to half their work, with £100-£250 being the most common collaboration cost.

When it comes to agreeing compensation, PRs are, unsurprisingly, more likely to use quantifiable metrics, such as domain authority, monthly page views or followers, while the influencers are more likely to highlight the time it takes to write a post, their experience and the profile of their own brand.


5.3 Evaluation needed

There is no industry standard for setting objectives or proving ROI, but as with everything in PR, impact should be determined against audience and brand needs.

When selecting influencers to work with, it is common to rely on visible stats on social channels, such as followers or likes, but this ignores two fundamental points. Firstly, for many influencers who have a blog, social channels are not necessarily their main engagement platform. While the significance of this depends on the nature of the collaboration (if it’s a single Instagram post or a full content collaboration), it’s impossible to determine an influencer’s popularity, audience loyalty or success from its social channels alone.

Secondly, it ignores engagement rates, which for social media are far more important than follower numbers. There are various ways to measure engagement and there is some debate over industry benchmarks but typically around or under 5% per post is what’s cited. Again, this is for social channels only and is a sign of how likely someone is to engage with one person’s post against a backdrop of everyone else they follow, or are exposed to, on a given platform. On an influencer’s blog, we must assume 100% of the audience are engaged to some extent as they’re only being exposed to one influencer.

At Vuelio, we publish the renowned blog rankings, which are based on both automated data analysis and human intelligence. The data analysis is based on the same information that’s in the Vuelio platform and includes a unique Influence Score, a metric that itself is based on multiple data points to give the most holistic view of influence.

Domain Authority is probably the other most popular means of assessing the quality of influencers used by brands and agencies.

Once the right collaborators have been found, objectives and measurement metrics are set and typically agreed in contract. Again, there’s no standard for this but a certain level of engagement on social media (number of likes or RTs for example) and a minimum number of page views on blog posts is typical.


5.4 Industry of influence

The pace of growth and revenue potential in influencer marketing, an industry set to be worth over £18bn by 2024, is significant and it’s now too firmly established to be ignored. For brands and agencies to realise this potential they need to deploy the fundamentals of sound PR and communications around audience, engagement and evaluation.

PRs already know how to do this, and influencer marketing is no different to any other industry they’re already working with. It’s about understanding based on insight into reach, interaction and impact with your target audience; tailored engagement based on relevant and creative content; and measurement and evaluation to define future activity.

In our conversations with the influencers, we’re told that the best relationships with the best results rely on true collaboration where both parties understand and respect the other’s strengths. No industry is more suited to this required role of building and maintaining relationships than PR.


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6. Who should lead influencer marketing?


The discussion about who owns influencer marketing is futile. It should be integrated across all areas of organisation from R&D, new product development through to acquisition, and after sales.

In many ways the battle has already been lost to the marketing industry. Typically influencers are treated as media and bought as part of a marketing campaign.

In fact, public relations should have a role in influencer marketing because the bigger opportunity is to establish long term relationships.

There’s also a relationship between control and trust with an audience.

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Marketing approaches influencer marketing from the perspective of high control and low trust. PR deals in low control and high trust. Marketing is short term and tactical. Public relations is long term and strategic. The focus lies with the end customer.


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7. Governance for influencer marketing


Influencer marketing is an emerging area of marketing and public relations. Everyone involved in the publication of influencer marketing content is responsible for its governance. This includes the brand or organisations, agencies, advisors and the influencer themselves.

In the UK there is a common misperception that new media and marketing laws have been introduced to cover influencers. It’s not the case. There are however updates from the Advertising Standards Authority (ASA) and Competition and Markets Authority (CMA) describing how to abide by existing laws and regulations.

  • September 2018 - ASA and CMA jointly published a guide called An Influencer’s Guide to making clear that ads are ads to help agencies, brands and influencers, stay on the right side of the law.

  • January 2019 - CMA published a further guide called Social media endorsements: being transparent with your followers to provide information for influencers for when they’ve been paid, incentivised or rewarded to promote a product, brand or service on social media.

  • September 2019 - ASA published a report called The labelling of influencer advertising as a deep-dive document into what labels and other factors help people understand when influencers are posting advertising content.

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9. What are the rules for earned influencer marketing?


Influencers have a variety of motivations for working with an organisation. Payment is a common driver but not the only one.

If you are an organisation pitching a story and an influencer creates organic content based on that pitch but there is no exchange of payment or value, then there is no need for disclosure on either side.

However, financial reward is not the only form of payment in the eyes of the CMA. If you give an influencer products, gifts, services, trips, hotel stays etc. for free, this is all likely to qualify as a payment. As such this must be declared prominently on any content created.

 

10. What are the rules for paid influencer marketing?


Disclosure of a paid influencer marketing relationship should be obvious. It should be made upfront. It should be easy to understand, unambiguous, timely and prominent.

Prominent disclosure means that the viewer clearly understands the commercial arrangement between influencer and brand without the need to click for more information, no matter what type of device they are using to view the post.

Use hashtags such as #ad, #advertisement, or #advertising that explicitly indicate a paid relationship. Descriptions such as “Thanks to [brand] for making this possible” or tagging a brand are not sufficient.


10.1 Paid creation

An organisation pays an influencer to create and publish content to their audience. The relationship is based on payment and an expectation of some level of control on the part of the brand. The relationship between the influencer and the organisation must be clearly identifiable.


10.2 Paid endorsement

An organisation pays an influencer to endorse a brand or product. The relationship is based on payment and an expectation of some level of control on the part of the brand. The relationship between the influencer and the organisation must be clearly identifiable.


10.3 Sponsored media

An organisation pays an influencer with no expectation of an outcome. The relationship is based on payment. The nature of the relationship must between the brand and the influencer must be disclosed.


10.4 Payment in kind

An organisation gives an influencer goods or services with an expectation that they will create and publish content. The relationship is based on payment and an expectation of some level of control on the part of the brand. The relationship between the influencer and the organisation must be clearly identifiable.


10.5 Client or employee disclosure

An intermediary such as an agency or employee with a financial interest in an organisation that creates or publishes content on behalf of an organisation. The relationship is based on payment and an expectation of some level of control on the part of the brand. The relationship between the intermediary and the organisation must be clearly identifiable.

 

11. Governing authorities 


The following organisations have responsibility for consumer protection and jurisdiction over breaches of influencer marketing in the UK.


11.1 Regulated industries

Industries such as healthcare and finance have their own regulations around marketing and disclosure that must be respected.

The Medicines and Healthcare Products Regulatory Agency (MHRA) provides guidance on marketing for the healthcare industry. The Financial Conduct Authority (FCA) is its counterpart for the finance industry.


11.2 Advertising Standards Authority (ASA)

The Advertising Standards Authority (ASA) is the UK’s advertising regulator. The ASA makes sure ads across UK media stick to the advertising rules set out in the Ad Codes.


10.3 Committee of Advertising Practice (CAP)

The Committee of Advertising Practice (CAP), whose members represent advertisers, media owners and agencies, is responsible for writing the Ad Codes.


11.4 Competition and Markets Authority (CMA)

The CMA exists to protect consumers. It upholds consumer protection law and can investigate posts that fall outside the ASA’s remit.


11.5 Chartered Institute of Public Relations (CIPR)

The CIPR regulates practice for members, typically agencies and organisations. It has the sanction to bar members that breach its Code of Conduct.


11.6 Public Relations Consultants Association (PRCA)

The PRCA regulates practice for members, typically individual practitioners. It has the sanction to bar members that breach its Code of Conduct.

 

12. Work in progress

In this final section we explore areas of influencer relations that remain a work in progress. Practitioners should be mindful of these issues when planning campaigns.


12.1 Ownership of content: influencers vs. platforms

Ordinarily, intellectual property (IP) ownership rights of influencer-generated content lie with the influencer. The onus rests with the sponsoring brand to negotiate content rights. However, often marketplace influencer marketing platforms build IP rights into their overall service. Here the content rights belong to the brand in perpetuity - but generally only for social media publication.

Increasingly influencers call on the services of photographers for their brand shoots. IP content rights belong to the photographer unless otherwise negotiated.


12.2 Ethics within influencer marketing

Social media users should not feel deceived or manipulated by influencer-generated content. Influencers have a moral obligation – and often a legal requirement – to do the right thing both by their followers and by the brands who pay for the content’s creation and publication.

Ethical issues reinforce the importance of effectively vetting prospective influencers to ensure brands have identified the most appropriate brand-fit in terms of tone-of-voice, values and brand affinity.


12.3 Influencer fraud

An influencer has committed influencer fraud if he has bought social media followers and /or engagement or has colluded with others in an attempt to appear more popular than he really is or to give the illusion of greater influence online. Communicators were culpable in the spread of the practice. They lionised audience size over all other metrics for both influencer selection and campaign success measurement. As such some bad actors purchased followers to swell their social media accounts. Attention then shifted to include engagement rates. Again some bad actors bought or colluded in engagement. As measurement shifts from vanity metrics towards intent and impact metrics influencer fraud should diminish as an industry-wide issue.


12.4 Governance: self-governed vs vigilantism

Influencer fraud hurts brands. Influencer fraud hurts honest Influencers, too. Many creators who have grown their communities organically complain they are missing out on brand collaborations. They argue work goes instead to those with faked/ bought/ or gamed reach and engagement metrics. A few influencers have taken to publicly calling-out influencers whom they suspect to have committed influencer fraud. In doing so they have become influencer fraud vigilantes - members of a self-appointed group of citizens who have undertaken enforcement within their communications’ discipline without authority because they deem the legal agencies to be inadequate. They deny a right to reply and they run the risk (regardless of how small) of calling out honest influencers in error.

 

15. Contributors


Our thanks to the following individuals for their contributions and comments to this paper: Natalie Orringe, head of marketing, Vuelio; Jake O’Neill, senior marketing manager, Vuelio; Rupa Shah, Founder and Director of Hashtag Ad Consulting; and Andrew Terry, Partner and Head of Intellectual Property & Media, Eversheds Sutherland.

The original draft of this document was created by Stephen Waddington and Scott Guthrie.

 
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Scott Guthrie

Scott Guthrie is an independent consultant that works with brands, agencies and platforms to generate meaningful results from smarter influencer marketing decisions. He is an event speaker, university guest lecturer, active blogger, media commentator and a former management consultant.

You can connect with Scott via Twitter @sabguthrie and he blogs at sabguthrie.info.

 
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Stephen Waddington

Stephen Waddington is the UK managing director at Metia Group, a digital marketing agency. He is Visiting Professor in Practice at the Newcastle University supporting the university and students through teaching and mentoring.

You can connect with Stephen via Twitter @wadds and he blogs at wadds.co.uk

 

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