LONDON (REUTERS) - Celebrities and influencers who endorse products without labelling their social media posts as paid-for by brands were warned on Thursday (Aug 16) that they were breaking the rules as Britain's regulator launched an investigation into the trend.
Recommendation from celebrities and social media influencers who have millions of followers is a growing marketing strategy for brands, but the UK Competition and Markets Authority (CMA) said that such endorsements could mislead customers.
It said it had seen posts that appeared to promote items or offer a celebrity's personal endorsement of a product, without it being clear whether the post had been paid for by the brand in question.
"If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it," said George Lusty, the CMA's Senior Director for Consumer Protection.
"So it's really important they are clearly told whether a celebrity is promoting a product because they have bought it themselves, or because they have been paid or thanked in some way by the brand."
The CMA said it had written to a range of famous people to gather more information about their business agreements with brands, and also wanted the public to share their experiences as part of the investigation.
Consumer giants such as Pernod Ricard, Unilever , Nestle and Mars have all spent money on so-called influencers to promote products.
Brands will pay anywhere from US$10,000 (S$13,760) to more than $100,000 for a single social media post, depending on the size, engagement and loyalty of the person's followers, and Unilever said it accounted for "tens of millions" of its 7.7 billion euro marketing last year.
The most famous can earn even more. Reality TV stars Kylie Jenner and Kim Kardashian, singer Selena Gomez and Portuguese footballer Cristiano Ronaldo are the top-paid celebrities per post on Instagram, earning up to US$1 million a post, according to social media analytics firm HopperHQ.
Their posts are often tagged "paid partnership with","#sponsored" or "#ad" to indicate that the stars have been paid by the brands in question.