Background
This case forms part of a wider piece of work on ads for affiliate marketing using intermediaries, identified for investigation following intelligence gathered by the ASA.
Ad description
Two Instagram stories on Jess Sheppard’s account @jessmsheppard, posted on 31 March 2024:
a. The first Instagram story featured a photo of Ms Sheppard. An Instagram Q&A box was superimposed onto the photo, with the text “Love the hair claw [flower emoji] and the Gilet… please share [chain link emoji]”. A clickable Rstyle.me link labelled “GILET” appeared below the text, which directed to a TALA product page.
b. The second Instagram story featured a similar photo of Ms Sheppard. An Instagram Q&A box was superimposed onto the photo, with a clickable Rstyle.me link labelled “MULTIPACK HAIR CLAWS” which directed to a MENGCOOL product listing on Amazon.
Issue
The ASA challenged whether the stories were obviously identifiable as marketing communications.
Response
Guang Zhou Shi Chen Ming Ke Ji You Xian Gong Si t/a MENGCOOL did not respond to the ASA’s enquiries in relation to ad (b).
We Are TALA Ltd t/a TALA said in relation to ad (a) that they had never had a direct affiliate relationship with Ms Sheppard. The relationship was with the intermediary, LTK, who operated the Rstyle.me affiliate links. They stated that they (and any other brand using LTK) had no control or visibility over the influencers which signed up with LTK and published affiliate links into TALA via this platform. They had never directly provided Ms Sheppard with an affiliate link or paid her through those links. They had not asked Ms Sheppard to post this story, and had no knowledge or visibility of it, as they were not tagged in the content.
Regarding their relationship with LTK, they said that they worked with many affiliate partners, one of which was LTK. They paid commission to LTK on a monthly basis, which was directly correlated with revenue generated through the platform. They had no control or insight into who posted affiliate links. They highlighted that LTK was the party that had a direct relationship with the affiliates and influencers, and that included managing adherence to platform rules and compliance with ASA regulations. They said that platforms like LTK did not notify brands when their products were used in affiliate links, and did not allow brands to control these links directly. Because of this, they considered that it was not possible for them to ensure compliance with the CAP Code, for ads that were not known to them.
They reiterated that they took their ASA obligations seriously and took proactive measures to ensure compliance when working with influencers directly. However, they considered that because they had no awareness of the relevant story, it was not possible for them to exercise their reactive controls on the content.
Ms Sheppard stated that she always disclosed her ads, and that the stories were not ads. She highlighted that she bought the items and attached evidence of the purchase of the hair claws. She confirmed that the stories did contain affiliate links, and stated that she would be willing to remove the stories from her highlights.rewardStyle Inc t/a LTK said that they were a tech-enabled partner for creator guided shopping. They provided the technology that allowed influencers (“creators”) to create shoppable posts that drove trackable sales for brands. They noted that they were not the advertiser, nor the creator, and instead they provided the platform for which brands and creators could connect their products. The core service they offered was to allow creators to host “shops” on the platform. Through their shoppable LTK links, creators could be compensated for their posts, and brands could track and grow engagement and sales. They said that they took compliance with advertising regulations seriously and had policies in place that required the creators to adhere to all relevant legal and ethical standards. They required creators to include disclosures in their social media posts. In relation to the stories, they agreed that the creators should have included disclosure in compliance with their guidelines and contractual requirements.
Amazon Europe Core Sàrl said they had policies that applied to all creators in their affiliate marketing programme, Amazon Associates, to ensure that they made the appropriate disclosures in relation to affiliate links. Where they became aware of creators failing to meet their policies, they reminded them of their obligation to appropriately disclose affiliate links, asked them to update their posts, and monitored their accounts in future.
Assessment
Upheld
The ASA was concerned by Guang Zhou Shi Chen Ming Ke Ji You Xian Gong Si t/a MENGCOOL’s lack of response and apparent disregard for the Code, which was a breach of CAP Code (Edition 12) rule 1.7 (Unreasonable delay).
We reminded them of their responsibility to respond promptly to our enquiries and told them to do so in future. The CAP Code stated that marketing communications must be obviously identifiable as such, and they must make clear their commercial intent if that was not obvious from the context. Paragraph I(h) of the Scope of the Code stated that it applied to “advertisements and other marketing communications by or from companies, organisations or sole traders on their own websites, or in other non-paid-for space online under their control, that [were] directly connected with the supply or transfer of goods, services, opportunities and gifts […]”. In cases of affiliate marketing, both the brand business and the affiliate marketer were responsible under the Code, notwithstanding the fact that the ads may have been created solely by the affiliate without any input from the business themselves.
The ASA first assessed whether the Instagram stories were ads. We understood that Ms Sheppard had stated that she had purchased the products herself and had not received payment or any other incentive from other parties. We also acknowledged that Ms Sheppard had no commercial relationship with TALA, and that the brand did not have any input in the content before it was posted. We had also seen no evidence that she had such a relationship with MENGCOOL. However, the stories included affiliate links that directed to a product page on TALA’s website and MENGCOOL’s product listing on Amazon. We understood that the affiliate links included in the stories would earn Ms Sheppard commission when products were purchased through the link. We therefore considered that the stories were directly connected with the supply of goods and were therefore marketing communications for the purposes of the Code. We understood that TALA had not had direct control of the way in which the affiliate links and related content were presented in ad (a). However, because they were the brand which benefitted monetarily from the affiliate marketing, we considered they were jointly responsible for the ad and its compliance with the Code.
We then assessed whether ads (a) and (b) were obviously identifiable as such. The ads were Instagram stories from a Q&A by Ms Sheppard, where she had invited her followers to ask her questions. The stories were posted in response to the question “Love the hair claw [flower emoji] and the Gilet… please share [chain link emoji]”. We considered that consumers would interpret the stories to be an exchange of information between Ms Sheppard and her follower(s), in response to the question she had received. The context of the conversational nature of a Q&A was unlikely to make clear to consumers the commercial intent of the stories. Therefore, ads (a) and (b) needed to be clearly labelled as marketing communications. In the absence of a clear and prominent identifier, such as “Ad” we considered that ads (a) and (b) did not make their commercial intent clear from the outset and were not obviously identifiable as marketing communications.
On these points, ads (a) and (b) breached CAP Code (Edition 12) rules 2.1, 2.3 and 2.4 (Recognition of marketing communications).
Action
The ad must not appear again in the form investigated. We told Guang Zhou Shi Chen Ming Ke Ji You Xian Gong Si t/a MENGCOOL, We Are TALA Ltd t/a TALA, and Ms Sheppard to ensure that their future ads were obviously identifiable as marketing communications, and the commercial intent was made clear, and that identifiers such as “ad” were clearly and prominently displayed. We referred MENGCOOL to CAP’s Compliance team.
