It's hard to put an exact figure on just how much money there is in the influencer economy, but it’s probably fair to say it’s quite a lot.
Influencer marketing was estimated to be worth €20 billion globally in 2023, for example, and that figure is sure to be much higher today.
It is worth saying that 'influencer’ is a broad church – it can include people who are best known for other things - like sports stars or actors or models - who use their profile to make money through their social media presence too.
But there are plenty of people who have developed audiences, along with good – or even great – incomes purely from their online activity..
Often times they started out posting about their profession or hobby – like a personal trainer or an avid gamer – and gradually built that into something they start to make money from.
How?
Depending on the platform they use they may be able to benefit from revenue sharing programmes – which means they get a small cut of the money made from the ads that are sold around their content.
They might also be selling their own products and services directly to their followers.
But really a huge segment of influencer income comes from endorsements and advertisements.
Because we’re all now much more savvy about traditional ads. It takes a lot more for us to be swayed by them – especially online, where we’re more inclined to swipe passed ads, or steer clear for fear of scams.
And so many brands see influencers as a really useful way of getting their products and services in front of their audiences. Because those influencers often have a very clear audience, and they can share the brand’s message with them directly.
They can often do that in an engaging way – and their word carries a lot of weight with it.
As a result, companies are often willing to pay a lot of money to big influencers to get a mention.
Apparently someone with 100,000 to 200,000 followers on Instagram would be classed as a major influencer – and would be capable of charging thousands of euro for one post promoting a brand.
Of course the vast majority of influencers or wannabe influencers have smaller followings than that – but many may still be earning hundreds per promotional post.
Others, meanwhile, might get sent freebies - like products or hotel stays - in return for a mention in their feed.
But the problem is, they’re not always up-front about this...
No.
Audiences may be more inclined to pay attention to influencers, and take their opinions seriously, but if they know that they’re being paid to plug a product it still takes the shine off nonetheless.
And so, sometimes, some influencers neglect to mention that their post is, in fact, an ad. Others, meanwhile, might try to obscure this fact – for example by making their ‘ad’ disclaimer harder to see in a picture or video.
But the problem is that this is against the rules.
The platforms themselves tend to require posters to declare when something is ‘branded content’, and they might restrict or shut down an account that fails to do that. Though we know platforms are quite poor at shutting down accounts that are doing far worse than not declaring ads, so that doesn’t happen very often.
But here in Ireland, influencers are also obliged to comply with the Advertising Standards Authority’s Code of Conduct.
First and foremost that requires them to clearly mark a post as an ad – by using an in-app tag that marks the post, or putting hashtag-ad or hashtag-gifted at the start of the text of the post. And having it at the start is crucial – it can’t be buried in between 20 other hashtags following a wall of text.
Influencers also have to comply with the general advertising rules – for example the provisions around advertising to children, promoting alcohol, and the need to be honest about what is being offered.
Members of the public can make complaints to the ASA and, if you’re found to have breached the code, you could get publicly called out in their complaints bulletin.
More seriously, though, you could also get referred to the Competition and Consumer Protection Commission – and the consequences here can be far more onerous. Because the CCPC has the power to take cases against people under consumer protection law - which bans unfair and misleading practices.
That, in theory, could result in thousands of euro of fines and even prison time for those found to be in breach.
Has that happened yet?
Not with any influencers – not yet anyway.
But there have been a number of compliance notices issued to some by the CCPC.
A compliance notice is essentially a warning that highlights what is believed to be a breach of consumer law – and it will direct the individual to correct what they’re doing so that they fall back into line.
We’ve seen this tool used a lot in the past year or so, with some high-profile Irish influencers.
Last month the CCPC revealed it had sent a compliance notice to celebrity cook Donal Skeehan. This notice was issued in July and related to a post he had made about a shop in Howth in North Dublin, which he had failed to properly label as being paid-for.
In March we found out that retired rugby player and current pundict Brian O’Driscoll had also gotten a compliance notice for failing to disclose the commercial nature of a post he had made about a clothing brand.
Fitness coach Caroline O’Mahony, who has more than 810,000 followers on Instagram, also got issued a compliance notice for failing to use appropriate labels on content which also related to a – different – clothing brand.
Both of these notices were issued at the end of last year.
And the CCPC said these compliance notices came after it had contacted 26 different influencers to remind them of their obligations under consumer law.
What about breaches found by the ASA?
We’ve had a number of them in recent times too.
Back in December there was a wave of high-profile Irish influencers getting called out by the ASA, including Pippa O’Connor.
She was found to be in breach of the advertising code for failing to make clear that posts about her own beauty range were ads. Some were labelled ‘own brand’ but that wasn’t deemed to be a clear enough marker.
Rosanna Davison was also named in that bulletin – relating to posts she made about a leisurewear brand.
Fitness influencer Siobhan O’Hagan, who has 160,000 followers on Instagram, was found in breach over what the ASA said were ‘misleading’ stories relating to her own fitness company, which were not clearly marked as ads.
And, more recently, the ASA has held up multiple complaints about influencer Julie Haynes, who has around 222,000 followers on Instagram.
Part of those complaints was the allegation that Haynes had obscured ad tags by making them the same colour as the background the text was placed over.
Another complaint about a post she made relating to a line of cosmetics claimed she had used a filter to manipulate the results, though this was denied by Haynes’ agent.
Is the ASA and CCPC the worst that influencers might face?
No.
While falling foul of either of those is not advisable, there is another agency that is now paying close attention to influencers.
And while the ASA and CCPC have so fare tended to give people a chance to fix their mistake, this State body has a far more stringent reputation.
In the past two years Revenue has signalled that it is taking a much closer look at influencers – and earlier this year revealed it had written to hundreds of them to "remind" them of their tax obligations.
Because the money made as an influencer is liable to tax and USC and so on, just the same as any other kind of income. And it’s not just about cash – bear in mind that freebies like a free trip away or some free goods can be treated as Benefit In Kind and taxable too.
And revenue has unmatched access to information – which makes it easier for them to see when a payment has been made but not declared.
So when Revenue comes knocking, it usually does so with good reason to believe that something is amiss. And they’re not inclined to be easily fobbed off when they know money is owed.
Those that fail to declare – or engage with Revenue in time – also face being named and shamed on the Tax Defaulters’ List. But, not only that, cases that reach that stage tend to have hefty interest charges and penalties attached – which generally double the amount of money owed.
So getting our house in order before that happens is the best approach.
