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U.K. Consumer Protection Agency Warns Social Media Celebs On Sponsorship Disclosure

The U.K.’s consumer protection agency "is warning celebrities that it will take further action if they continue to promote brands and products on social media without disclosing they are being paid," according to David Bond of the FINANCIAL TIMES. The concerns expressed by the Competition & Markets Authority mirror those of the Federal Trade Commission in the U.S., "which has called for clear disclosure of any sponsorship by social media’s stars." In the U.K., the CMA "has also rebuked the Manchester-based digital marketing agency Social Chain for misleading the public with unlabelled advertising through online platforms such as Twitter, Instagram and YouTube." Forty-three individuals and 15 businesses "received warning letters from the CMA." So far, the identities of the companies and celebrities "have not been disclosed." The Social Chain case has "highlighted the challenge" for U.K. and U.S. regulators "as they attempt to police the rapidly growing industry of social media marketing involving celebrities and popular bloggers." Brands and advertising agencies "are increasingly turning to well-known digital influencers as ad blocking reduces the impact and reach of digital advertising and TV and print audiences decline." For sports stars, actors and musicians, it "is a lucrative business." For example, Real Madrid footballer Cristiano Ronaldo has 215 million followers on social media across platforms such as Facebook, Instagram and Twitter and "can use the numbers to enhance the value of his sponsorship deals with brands like Nike." Hookit, a data analytics business that measures sponsorship value in social and digital media, says Ronaldo’s sponsors "are getting value for money." It estimates Ronaldo generated $176M in value for his sponsors "through promotional work on his social media accounts," with Nike benefiting to the tune of $36M last year. London-based digital video and advertising agency Brave Bison Chief Strategy Officer Simon Pont said, "No one can afford for social influencers to be falsely influenced by the marketing dollar. But it can be murky and the regulators are playing catch-up on this" (FT, 8/31).

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