The SRO’s approach to regulating influencer marketing.
Since 2016 the Italian Industry Self-Regulation Organization (IAP) has acknowledged both, the increasing relevance as well as the risks of practices relying on the use of influencers in commercial communication. At the time I reported – in post uploaded in July – about the ‘Digital Chart’ released by the local SRO, i.e. a document meant to pursue two goals: (a) to individuate the most common forms of commercial communication in use on the Internet, and (b) to assess how the problem of transparency and recognizability of promotional messages was dealt with in the digital context. The background idea behind the initiative was to come up with a set of guidelines/best practices, which the Advertising Industry should apply when using ‘influencers’ in their commercial communication.
To follow up with its plan, the SRO initially choose a ‘soft approach’ by contacting the most popular and effective local influencers with a sort of ‘moral suasion’ and by drawing their attention – through letters sent in 2017 - on several transparency issues linked to their businesses. As a result of such initiative, some of the most prominent local influencers became members of the SRO (as such held to comply with the provisions of the Self-Regulation Code for Commercial Communication [CAP], inclusive those on transparency of all promotional messages).
The effectiveness of the SRO system.
Due to the fact that now almost all relevant players active in the sector of commercial communication (i.e. advertisers, agencies, practitioners, influencers, publishers, media companies, their branch associations and, finally, all major online platforms and providers and their associations) adhere to the local SRO, the system is capable of covering almost the entire span of digital advertising performed. There is also a ‘cross-borders’ effect, as advertisers located abroad or outside the EU (potentially willing to ignore - or not aware of - local regulations) need to rely on platforms/providers with a local presence to convey their promotional messages to the public. Such local online platforms will result in a natural choke point where temporary injunction or a cease and desist order issued may succeed in blocking an infringing foreign campaign.
To offer the local advertising industry making use of ‘influencers’ a suitable standard, the SRO has now integrated the provisions of its Code (specifically those on ‘transparency’) and has by adopted a specific Regulation to govern influencer marketing.
As to the first aspect, the Code maintains the principle on immediate ‘identification’ of all promotional messages (article 7/1 claims – as a rule of behavior - that “Marketing communication must be clearly distinguishable as such. In the media and in marketing communication where news and other editorial matter are presented to the public, the marketing communication must be clearly distinguishable through the adoption of appropriate measures”). It now also sets, specifically, (article 7/2) that “With reference to certain forms of marketing communication on the Internet, the most important and suitable measures are indicated in the Digital Chart Regulations” (a provision clearly intended to address the practice of ‘influencer marketing’).
The new Regulation.
The new Regulation applies to all commercial communication performed via the Internet and requires such marketing when “..distributed over the Internet, in whatever form it may be”, to “..clearly state its promotional nature through the adoption of suitable measures”.
It then sets that such requirement is deemed to have seen duly satisfied, when several specific criteria are met.
In detail, the Regulation considers and affirms:
- for product or brand endorsement:
- “When a celebrity, influencer, blogger, or similar user of the Internet, whose actions might potentially influence the commercial choices of the public .. accredits a product or a brand within their own content, as a form of marketing communication ..“ such involvement must be revealed -right at the beginning of the message – through adequate labelling, such as: “Advertising”, or “Promoted by ” XYZ or “Sponsored by brand” XYZ or “in partnership with” XYZ (for tweets within the first three hashtags one of the following labels must be present: “#Advertising”, or #Sponsored by brand” XYZ, or “#ad” together with “#brand”).
- “.. should the relationship between the influencer and advertiser not be underpinned by an existing agreement, but consist merely in the advertiser occasionally sending the influencer its products free of charge or for a modest consideration, rather than the notifications stated above, posts or other messages distributed online in which the influencer mentions or represents these products must feature a disclaimer of the following type:‘product sent by… brand’, or equivalent”. In addition, to avoid direct liability, in such case “.. the advertiser must clearly and unequivocally inform the influencer when sending the product of the obligation to insert this disclaimer”.
- for videos diffused for promotional purposes similar labelling and disclosure requirements are set to allow an immediate perception of such (marketing) intent.
- invitations of bloggers or influencers to events are dealt with in the Regulation through the following provisions:
- “Should the relationship between the influencer and advertiser not be underpinned by an existing agreement, but consist merely in the advertiser sending an invitation to take part in an event, posts and other messages produced by the influencer online that convey information about a product or brand in relation to the event must inform the audience that they are attending at the advertiser’s invitation”. Again, there is specific obligation on the advertiser to inform bloggers and influencers about their disclosure requirements.
- identical information/disclosure requirements apply (when pursuing a promotional intent with respect to a product service or a brand) to practices such as: user-generated content, in-feed units, paid search units, recommendation widgets, in-app advertising, advergaming.
Through the new Regulation the Italian SRO has recognized both, the relevance of online marketing performed in a digital world as well as the rapidly increasing amount of investment allocated to new practices (and among them, influencer marketing), peculiar to or popular in such context. It has also picked up on an internal call for sector specific standards and regulations to avoid the risks unavoidably linked to the new practices and has followed the initiatives undertaken to such purpose by other Regulatory Authorities (reference is to the specific guidelines of the ASA in the UK, of the FTC in the US, of the ICAS in Canada and of many others).