The Competition and Consumer Protection Commission (CCPC) is warning of a widespread failure by social media influencers to label commercial content as advertising.
New research from the CCPC shows that a significant portion of online posts from Irish influencers were either not labelled at all or not sufficiently labelled as required under consumer protection law.
According to the CCPC's Social Media Influencers report, almost 50% of the commercial content it reviewed was not labelled as advertising in any way.
Poor levels of labelling relating to influencers' marketing of their own brands was an area of particular concern, according to the CCPC.
The research shows that just 10% of consumers said they trusted the information provided by influencers.
It found that 66% of consumers who follow influencers reported purchasing a product as a result of an influencer mentioning it, but nearly 24% of them stated that they subsequently felt misled about the product that they had purchased.
Consumers surveyed as part of the study raised specific concerns regarding influencers promoting crypto and other financial products, particularly when the influencer had no experience in these areas.
While many consumers said they distrusted influencers in general, they did appear to trust the influencers that they follow.
The research found that consumers were reluctant to use the word "influencers" in reference to personalities they follow on social media platforms, preferring instead to use terms such as "interactive celebrities", "people of interest".
The CCPC said that some consumers may be overconfident in their ability to recognise influencer advertising and may be vulnerable to misleading practices.
The commission is calling for stronger guidance and greater education for both influencers and consumers as well as increased responsibility among social media platforms.
It said there is a need for a simple reporting mechanism for hidden advertising on platforms to allow users to report misleading content.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
The CCPC said that it will work with the Advertising Standards Authority for Ireland (ASAI) next year to deliver clear joint guidance on areas such as labelling, own-brand products and reposts.
The commission also intends to launch a series of educational videos aimed at consumers to explain crypto and outline factors to consider before investing in them.
The CCPC said that it was granted new powers in 2022 but if it is found that they are ineffective at tackling breaches of consumer protection law, including by influencers, it will advocate for the strengthening of its enforcement powers.
"Platforms and brands must take greater responsibility for educating and informing their users and consumers, and must support influencers in clearly and consistently labelling paid content," said Kevin O'Brien, Member of the Competition and Consumer Protection Commission.
"We will monitor social media platforms for progress in this area. It’s crucial that platforms, brands, influencers and the agents understand their responsibilities and abide by the law."
"We will also work with the ASAI to develop guidance which will provide greater clarity in relation to responsibilities and requirements."
Orla Twomey, Chief Executive of the Advertising Standards Authority for Ireland, said that influencer marketing had accelerated exponentially in recent years.
"The need for transparency and clarity from influencers regarding social media advertisements is greater than ever and plays an essential part in increasing consumers’ trust in advertising they are seeing and hearing," Ms Twomey said.
