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
An Instagram highlight on Erim Kaur’s account @erim labelled “Fragrance” featured a story, posted on 5 November 2023. The story included a reel with the text “4 long-lasting perfumes for Broke Girlies *all under £50”. A clickable link labelled “CHEAP & LONG LASTING PERFUMES” appeared below the reel, which directed to Ms Kaur’s LTK shop page.
Issue
The ASA challenged whether the story was obviously identifiable as a marketing communication.
Response
THG Beauty Ltd t/a Lookfantastic (THG), who sold three of the perfumes referenced in the ad, said they did not have a direct commercial relationship with Ms Kaur as she was not directly engaged as an influencer nor had she been gifted any products. However, they did have in place a sponsored campaign agreement with rewardStyle Inc t/a LTK. They explained that LTK operated a brand influencer platform through which influencers approved by LTK, and who contracted directly with LTK, were able to access affiliate links for brands which were also on the platform. In those circumstances the brands had no direct relationship with the influencers and did not necessarily know which influencers were posting content to promote their brands.
THG did take steps nonetheless to ensure compliance with the CAP Code when working with LTK. Their agreement with them included that LTK ensure compliance with all applicable laws, rules and regulations. All creators who sign up to the LTK platform were required to read and agree to LTK terms. Those terms included the requirement that all creators comply specifically with ASA guidelines and included a link to the CAP Influencers’ Guide to Making Clear that Ads are Ads. They said they would request that LTK re-issues prescriptive guidance to creators so that it is made clear that all iterations of an advert shared across social media outlets require compliance with the CAP Code and therefore must be made identifiable as a paid ad.
Whilst they understood that the LTK landing page (both on mobile and desktop) was obviously identifiable as an advert and contained a prominent disclaimer that it contained paid links, they recognised it may not have been made sufficiently clear in Ms Kaur’s Story. Notwithstanding the fact that they had no direct commercial relationship with Ms Kaur, and therefore no direct editorial control over her posts, they recognised that the inclusion of an affiliate link for their brand being included in the story may be tantamount to a marketing communication under the CAP Code. In that scenario they acknowledged that it was their responsibility to take all necessary steps to ensure compliance.
TFS Buying Ltd t/a The Fragrance Shop (TFS), who sold one of the perfumes referenced in the ad, said they did not have a direct commercial relationship with Ms Kaur, but that it did appear there is a commercial relationship between Ms Kaur and LTK.
LTK were part of their affiliate network and there were contractual provisions between the parties to ensure compliance with the rules and regulatory guidance. LTK’s creator terms of business, to which creators are obliged to agree, included that ASA disclosure requirements must be adhered to. The affiliate link redirected to Ms Kaur’s LTK shop page rather than their website and the LTK page specified that the link to their website was a paid one. They also observed that the footage appears to have been recorded in a competitor’s shop and that it was therefore possible that Ms Kaur had inadvertently provided a link to their website on the TFS shop LTK page in error.
Erim Kaur said she took the ASA guidelines seriously and was diligent at disclosing any paid collaboration, gifted product, or when mentioning her own brand. She apologised for the oversight in not disclosing the affiliate links and said they had been removed immediately.
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. They also included marketing disclosures next to the affiliate links on their platform. They highlighted that they had thousands of creators, and it was not possible for them to read every post. However, they did monitor their platform, and in cases of non-compliance, they would take action. In relation to the story, they agreed that it should have included disclosure in compliance with their guidelines and contractual requirements.
Assessment
Upheld
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.
The ASA first assessed whether the Instagram story was an ad. The story included an affiliate link that directed to Ms Kaur’s LTK shop page, which would earn Ms Kaur commission when products were purchased through the links on the platform. The story was therefore a marketing communication for the purposes of the Code.
We then assessed whether the ad was obviously identifiable as such.The ad was an Instagram story which included a reel with the text “4 long-lasting perfumes for Broke Girlies *all under £50”. A clickable link labelled “CHEAP & LONG LASTING PERFUMES” appeared below the reel, which directed to Ms Kaur’s LTK shop page. We acknowledged that once consumers landed on the LTK shop page, built-in text on the platform stated “Paid links”. However, this was only visible to consumers after they had engaged with the link.
Because consumers therefore had to engage with the ad before it was made clear that Ms Kaur would receive commission on purchases made via the links featured, we considered that this was insufficient to ensure that the story was obviously identifiable as an ad. We concluded that, in the absence of a clear and prominent identifier such as “ad”, the ad did not make its commercial intent clear from the outset and was not obviously identifiable as a marketing communication.
The ad 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 THG Beauty Ltd, TFS Buying Ltd and Ms Kaur to ensure that their future ads were obviously identifiable as marketing communications, that the commercial intent was made clear, and that identifiers such as “ad” were clearly and prominently displayed.
