Influencer mistrust can be avoided with transparency

Peer to peer selling may be the next big move for fashion and tech entrepreneurs, but any new platform will have to have full transparency when it comes to influencers marketing products.

New research conducted by BBC Radio 4, shows 82 percent of people who took part said it was not always clear when an influencer had been paid to promote a product.

The survey of more than 1,000 shoppers was carried out for Radio 4's You and Yours by consumer analysts Savvy Marketing. It found that 54 percent of 18-to-34-year-old beauty buyers were influenced by their suggestions.

Alastair Lockhart from Savvy Marketing said: "The shoppers of the UK are a knowledgeable lot and tend to be pretty wise when deciding how much to trust an influencer's recommendations. However, we can see from the research that it's not always clear and a lot of younger people in particular are influenced by their suggestions."

The growth of social media over the past decade has changed marketing and advertising in many ways. A major part of that has been the rise of "social influencers".

Cosmetic brands are spending millions of pounds promoting their brands through influencers. They've moved away from traditional TV and magazine ad campaigns to Instagram and YouTube.

L'Oreal group, the world's largest cosmetics company, whose annual global sales amount to 26 billion euros, spends half of its marketing budget on social media.

The group's director of innovation, Lubomira Rochet told the BBC L'Oreal was embracing influencers: "Sometimes we consider influencers as our extended marketing teams. They are so creative. The return on investment is obviously a bigger concern, especially when you spend 42 percent of your marketing budget in digital, so we are monitoring the whole area of all our initiatives and influencers are pretty positive."

In September the Advertising Standards Authority launched a new guide to help social influencers stick to the rules by making clear when their posts are ads. The guide has been developed in collaboration with the Competition and Markets Authority (CMA).

When influencers accept payments or gifts their posts are subject to consumer protection laws

When a brand rewards an influencer with a payment, free gift, or other perk, any resulting posts become subject to consumer protection law. When a brand also has control over the content, they become subject to the UK Advertising Code as well.

Consumers must always be aware when they are being advertised to, and both brands and influencers have a responsibility to ensure the content makes that reality clear upfront. Failure to disclose a commercial relationship leaves both parties at risk of action from the ASA.

Shahriar Coupal, Director of the Committee of Advertising Practice (CAP) said: “Responsible influencer marketing involves being upfront and clear with the audience, so people are not confused or misled and know when they’re being advertised to. The relationship between influencers and their followers relies on trust and authenticity, so transparency is in the interests of all parties. This guide on the standards will help influencers and brands stick to the rules by being upfront with their followers.”

Photo credit:L'Oreal Nyx campaign, source L'Oreal; Article sources, BBC "Most shoppers mistrust influencers, says survey"; ASA "New guidance launched for social media influencers"