Influencer Marketing

Navigating the Advertising Legal Framework

In recent years, the advertising sector has faced greater scrutiny and legal challenges across an array of areas.

One area that can be particularly tricky to navigate is non-traditional advertising, driven by various factors, not least disruptive technology and changing audience behaviours. This has seen an increase in marketing across social media platforms by influencers, which poses a number of challenges.

Challenges in the sector

Over the past few years, there have been a multitude of adverse ASA decisions against influencer marketing. Not only does this indicate that it’s a complex area, but also that marketing teams (both internal and external) may not have been seeking the advice they require from external legal professionals before instructing influencers and/or going to market with campaigns.

Certain practices in the influencer marketing world are also catching the eye of various authorities, with HMRC paying closer attention to the taxable status of items provided to influencers.

As a result, doing business is increasingly complex. And failing to get this right can have potentially serious ramifications. For example, reputational damage and the erosion of stakeholder trust are just some of the possible outcomes resulting from an adverse decision from the ASA.

Robust risk management (via legal and non-legal support) will help to reduce a number of key risk-factors, including:

  • Financial liability
  • Decreased sales
  • Inefficient marketing spend
  • Reputational harm
  • Erosion of client and customer trust

Scrutiny from authorities

HMRC has begun to take more of an interest in influencer marketing, in some instances looking to substantiate a position that VAT applied to items provided to influencers may not have been properly accounted for.

Ultimately, whether or not VAT is or is not applicable is a question of fact. It requires (1) a detailed legal analysis of the contractual position and (2) expert tax input from VAT specialists, as well as an in-depth client-centred understanding of the business practices around providing items to influencers.

PwC’s multidisciplinary (legal and non-legal) offering is invaluable in resolving questions of this nature.

Finding the solution

Given the complexity of influencer marketing, legal support is crucial for risk management:

  • Contracting
    • Ensuring compliance with ASA (and other relevant advertising authority) rules and applicable laws sits in the correct place, and that contractual protections and the liability position adequately safeguard you if anything goes wrong;
    • Ensuring that contracts are in place with influencers that facilitate requisite control and protection, and that such contracting is appropriately structured between advertiser, agency and influencer;
  • Clearances - we can review your proposed campaigns before they go live, thereby helping you to comply with relevant laws and advertising rules (e.g. ASA rules), and reducing the risk that your campaign infringes the IP rights of third parties;
  • Advisory - legal guidance on specific topics relevant for you and your clients and/or certain sectors;
  • Claims - advising on any disputes or claims (including ASA claims) related to influencer marketing;
  • Training - ensuring that those involved in the marketing (and even the influencers being engaged) know what they can and cannot do.
  • Policies and procedures - helping to ensure that you have in place robust internal policies and procedures, e.g. brand and marketing guidelines, internal policies for the use of influencers, gifts policies and registers, etc.

Holistic approaches

As well as our considerable legal advertising experience, by working alongside a vast array of award-winning, non-legal advertising experts, our team benefits from collaborative, top-tier input and market insights only accessible because of PwC’s multi-disciplinary line of services, including:

  • Customer, Marketing and Media Insight;
  • Consulting;
  • Operational Restructuring;
  • Tax.

Coupled with our expansive international reach, we benefit from being able to provide global, seamless, ‘one-stop-shop’ legal and non-legal support across all advertising focus areas.

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