CMA warns companies against hidden social media ads

August 11, 2016 // 11:54 a.m.

Tags: #advertising #adverts #cma #competition-and-markets-a #competition-and-markets-authority #nisha-arora #social-chain #social-media

The Competition and Markets Authority (CMA) has warned a social networking advertising company against 'hidden' adverts, after finding the company was paying social 'celebs' to promote goods and services without clearly stating the nature of the promotion.

Social networking is big business, both for the companies providing the platforms like Twitter and Facebook and for the celebrities - both traditional and non-traditional - who find themselves with an army of fans and followers. Social Chain, a marketing company specialising in social media promotion, is one of the companies exploiting the medium: accounts with a large number of followers are paid to post positive messages about films, games, and smartphone apps for everything from dating to takeaways, pushing brands to around four million users.

Trouble is, Social Chain has been lax in getting its human billboards to properly mark their promotional posts as paid-for advertising. 'Adverts which were posted on Twitter, YouTube and Instagram, may have been difficult for readers to distinguish from other posts, conversations and jokes they appeared alongside,' the CMA noted in a statement regarding the findings (PDF warning) of its investigation into the company, noting also that Social Chain had both agreed with this conclusion and had been cooperative throughout. 'After the issue was raised with Social Chain, it agreed undertakings that will ensure that all advertising that Social Chain posts or arranges will be clearly labelled or identified so that it is distinguishable from other content found on social media.'

The investigation found that 19 marketing campaigns involving posts published on the accounts of 43 'social media personalities' reaching four million followers were in breach of regulations. 'Social media personalities can have an important influence on people’s views, especially young people. It is therefore crucial that when people decide what to buy, they should not be misled by adverts on social media that read like independent opinions,' explained Nisha Arora, CMA's senior director for consumer enforcement. 'Businesses, marketing companies and authors of online content all need to play their role in ensuring that advertising is clearly labelled as such.'

The CMA has also written to a further 25 social media marketing companies to alert them to the findings.
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