Social media influencers fail to label half of advertisements, watchdog finds

Almost half of advertising by social media influencers is untagged or poorly tagged, while consumers overestimate their ability to recognise such ads, research by the Competition and Consumer Protection Commission (CCPC) has found.

The CCPC said just 10 per cent of Irish consumers trusted the information provided by influencers on platforms such as TikTok, Instagram, Facebook, Twitter and Snapchat, and it wants social media companies to do more to facilitate the reporting of hidden or misleading ads.

Some 77 per cent of those surveyed said they found influencer ads “easy” to identify. However, several examples of influencer marketing caused “confusion” among focus groups held by the State regulator, suggesting people may be “more vulnerable to misleading marketing than they think”.

Failure to label advertisements on social media was “widespread”, the CCPC said, with some 48.4 per cent of the commercial content reviewed by the CCPC not labelled as advertising in any way.

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The CCPC said it would work to make the Digital Services Act “an effective tool” by ensuring systematic processes for monitoring and reporting such ads on social media platforms were in place.

As part of its work with the Consumer Protection Co-operation Network in Europe, it is also studying the effectiveness of a new TikTok reporting function for misleading ad content.

Although consumers don’t trust influencers generally, they do appear to trust the influencers they follow, according to the CCPC, with its research finding consumers were reluctant to use the word “influencers” to describe the personalities they themselves followed on social platforms.

However, two-thirds of consumers who follow influencers on social media reported purchasing a product as a result of an influencer mentioning it and 24 per cent of this group stated they had subsequently felt misled about the product. This equates to 4.6 per cent of the adult population.

Rather than reporting such issues to an authority like the CCPC, consumers tend to simply unfollow the influencer.

Consumers also raised concerns about the rise of “finfluencers”, or financial influencers, promoting crypto currencies and other financial products, especially when they have no experience of these areas.

Kevin O’Brien, a member of the commission, said the CCPC, which has a financial education mandate, planned to produce educational materials around certain financial products.

“The influence of finfluencers will be captured in our work in that,” Mr O’Brien said.

Some 51 per cent of consumers say most of the influencers they follow are based outside of Ireland.

“This suggests that even if the finfluencing phenomenon is not yet a big factor among Irish influencers, it may still be affecting Irish consumers,” the CCPC’s report warns.

Another “area of particular concern” is poor levels of ad labelling relating to influencers’ marketing of their own brands.

To date, influencers have been subject to the self-regulatory regime operated by the Advertising Standards Authority for Ireland (ASAI), which requires commercial content to feature hashtags such as “#ad” and “#spon” and has named and shamed some individuals who have failed to do so.

The CCPC said its research pointed to a need to “reduce inconsistencies” in labelling methods among influencers and indicated it would work with the ASAI to develop guidance that provides “greater clarity” for all.

“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,” Mr O’Brien said.

ASAI chief executive Orla Twomey said it was “concerning” to learn from the survey that only 10 per cent of Irish consumers trusted information they received from influencers.

“We look forward to working with the CCPC to develop further guidance.”