Foong Li Mei
Aug 17, 2017

Keeping influencers in line

Advertising authorities are out to set higher ethical standards for influencer marketing, but their success remains debatable.

It crowd: Winning internet celebrities gather at the Influence Asia 2017 awards, organised by specialist agency Gushcloud, which has come under fire for failing to disclose sponsored posts.
It crowd: Winning internet celebrities gather at the Influence Asia 2017 awards, organised by specialist agency Gushcloud, which has come under fire for failing to disclose sponsored posts.

The ‘instafamous’ are pretty infamous. Look beyond the flattering filters on their flatlays and selfies, and the influencer industry in the Asia-Pacific region begins to resemble the Wild West — lawless, ethically murky and surrounded by dirt.

Controversies stick to social media stars like wet sand, and one of the most common accusations is their nonchalance about advertising best practices. Some have masked paid content as impartial posts to comply with clients’ requests; others have failed to disclose sponsorship due to plain oversight. Probably the worst instances have occurred when misleading content is used to discredit rival brands.

But it’s hard to ignore the facts: the Wild West sells. Brands are itching to work with social media personalities as they are closely watched by tens of thousands, even millions, of followers coveting their lifestyles and convinced by their reviews. In other words, influencers offer a potent antidote to the prevailing ad-allergies of today.

According to a 2016 study by Kantar TNS, two in five online 16-to-24-year-olds in Asia-Pacific report that they trust what people online say about brands more than ‘official’ sources, such as newspapers, brands’ own websites or TV ads.

Melissa Koh: Popular fashion blogger has converted following into successful brand partnerships.

Influencers’ followings can also translate into sales. When Liang Tao, founder of Chinese fashion blog Mr Bags, launched a limited edition of 80 Givenchy bags he had co-created on WeChat earlier this year — priced Rmb14,900 (US$2,195) — he sold out within 12 minutes.

But when influencers are caught going rogue, brands take a hit too. In 2015, Singtel became embroiled in controversy when a leaked brief issued by Singaporean influencer agency Gushcloud instructed influencers to drive new subscribers to Singtel’s youth plan by complaining about the services and network of competitors M1 and Starhub. Singtel ended up issuing a public apology, firing the employee who worked on the campaign and axing its contract with Gushcloud.

Disclosure is by no means an issue confined to Asia — even in heavily regulated spaces such as the US and the UK it isn’t uncommon for bloggers and brands to flout the rules. But with no solid standards in place across much of Asia, it can be difficult to make influencers play in the light.

New rules, please

Recently, several Asia-Pacific markets have begun laying down some ground rules.

China is the keenest. Its amended Advertising Law came into effect in 2015 to clamp down hard on false advertisements. Publishers, including influencers, are now obligated to declare paid posts or risk legal action. Within a year, authorities handled 3,200 cases related to internet advertising, handing out about Rmb67 million (US$9.9 million) in fines.

A year ago, the Advertising Standards Authority of Singapore (ASAS) also issued a guideline after consulting brands, agencies and members of the public. Influencers were instructed to clearly state sponsorship for any content, which covers reviews, testimonials and endorsements. False reviews and engagement are prohibited.

Similarly, the Australian Association of National Advertisers (AANA) released a new provision in its Code of Ethics in March, requiring that any “advertising or marketing communications shall be clearly distinguishable as such to the relevant audience”. 

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The influencer viewpoint

For celebrity blogger Wendy Cheng, better known as Xiaxue, things have been business-as-usual in the Singaporean influencer market since the Advertising Standards Authority of Singapore (ASAS) introduced their new guideline. It seems to have little effect on astroturfing (orchestrated campaigns disguised as comments from the public), she says.

“If anything, astroturfing became worse. As more and more ‘influencers’ are springing up, they are getting items sponsored left, right, and centre. It is now so common that people don’t bother with declaring a sponsored post anymore,” says Cheng, adding that she declares sponsorship for her own posts.

She is also doubtful that influencers will use Instagram’s new feature to disclose paid partnerships.
Others, it seems, have not even been aware of the guideline: Singaporean YouTube personality Ridhwan Azman is among them. He claims to be practising disclosure for all his commercial content, however.

Joseph Germani, meanwhile, a YouTube personality from Malaysia, says that agencies need to be held accountable just as much as rookie influencers.  While he has partnered with firms that have great work ethics, he says, he has also lost business due to one agency’s greed.

“I would love to see [agencies] spend time to groom, to help, to advise influencers on how to reach their goal or dream. Not just milk them for the money,” says Germani.

Xiaxue: “As more influencers spring up, they’re getting sponsored left, right and centre.”

Regulations aside, Instagram has also begun addressing the problem in a softer way by offering brands the incentive of access to data analytics if they use new subheaders on posts to declare sponsorship. Previously, the only way posters had to flag paid content was via easily missed hashtags, such as #sponsored, #spon, #sp or #ad.

Meanwhile, new companies such as SushiVid — established by former content star, Foong Yuh Wen — are starting to pull back the veil on unregulated influencer pricing, another common complaint among brands, since many content producers do not even have rate cards.

“I have seen influencers in Malaysia with 100,000 subscribers charging 100,000 ringgit [US$23,200] per campaign,” says Foong. “In contrast, influencers in Indonesia that have 100,000 subscribers charge 15,000 ringgit per campaign.” SushiVid recommends charges for its influencers based on the average performance of their content, and also ensuring that each transaction between brand and influencer adheres to a clear invoicing format.

So how much is this shifting landscape affecting the influencer game?

Line in the sand

Industry players Campaign Asia-Pacific has interviewed are largely in favour of the new requirements for disclosure, as they help define best practices in this increasingly lucrative space.

Caroline Hsu, managing director, Asia-Pacific, of The Hoffman Agency, points out that coming clean about paid messages adds credibility to influencer marketing. “Followers have the right to understand the real nature of the post,” she says. “We have seen how [required disclosure] in the US and Europe has allowed influencers to engage with their followers in a more genuine and relatable way.”

An internal survey by Visual Amplifiers, an influencer marketing firm that operates in Singapore and Australia, also found its social media stars were happy to declare brand sponsorship. 

Not everyone thinks that such measures are by any means enough to keep the industry on the straight and narrow, however. Digital strategy consultant Ryan Lim, founder of QED Consulting — one of the companies that reviewed the Singaporean guidelines — observes that they have raised awareness on sponsorship disclosure ethics in the last year, but only slightly. 

Ridhwan Azman: YouTube star declares sponsorships.

“The ‘actors’ of the industry can’t plead ignorance anymore, but more can be done,” he says. “So far, this is a first guideline. I expect to see adjustment as it gets tested to see if it has true practical value.”

ASAS’s spokesman says it has plans to review the guidelines later this year in line with industry developments. “The industry’s understanding of the guidelines remains an issue,” admits chairman Tan Sze Wee: “while the emergence of new social media platforms and updates to existing ones may facilitate or hinder disclosure to viewers.”

In Australia, AANA has a slightly different challenge. “Ensuring that marketing communication is identifiable as such is the major issue in this space,” says Simone Brandon, the watchdog’s director of policy and regulatory affairs.

Part of the problem is that the definition of what constitutes declaration of paid partnership remains fuzzy, no matter what any ethics code may demand. Hashtags or disclaimers can easily be slipped undetected into the middle of a vlog or the bottom of a chunk of other hashtags — and whispered disclosures defeat the purpose of transparency.

On the side of the law

This raises the question of whether guidelines by watchdogs have any bite. Both ASAS and AANA can refer to consumer laws in their respective countries for misleading promotional materials. Generally though, noncompliance of its guidelines will not result in criminal or civil penalisations.

Their presence may well be having an impact anyway. Gushcloud, having lost its contract with Singtel in 2015, is one agency that seems to be cleaning up its act. Several months prior to the controversy, founder Vincent Ha said in an official statement that if clients requested that a sponsored post not be mentioned as an ad, the firm would give the green light as long influencers were comfortable with it. “What we do is lawful. The law does not require disclosures right now,” he stated at the time. However, in a recent interview with Campaign, the company suggested it had adopted a different tone.

“We have several service standards that we adhere to,” says Azrul Abas, corporate  communications executive for Gushcloud International. “We also vet the briefs we receive from clients for negative or onerous directions to protect both the influencers’ and clients’ brand reputation.” Every paid post is now required to have relevant sponsorship disclosures, he claims.

Just how apparent that disclosure is, however, is left up to the influencer — and this rule is only enforced in the agency’s Singaporean office. Gushcloud also operates in Malaysia, Indonesia, Thailand, Philippines, Vietnam, South Korea and the US. “We encourage all seven other country offices to adopt the same best practices,” says Abas.

Joseph Germani: “Agencies should advise influencers.”

Good self-regulatory intentions are a step forward in a fast-changing industry but, as QED’s Ryan Lim points out, they require everyone to play by the same rules. “Self-regulation only works if the majority of the group involved has an aligned moral compass,” Lim says. “If some companies decide to flout the rules because their brand can take the controversy, the whole thing falls apart.”

Clearing the fog

Given that standards and best practices in influencer marketing remain fuzzy, Lim detects caution among brands. In his view, most brands in Asia are still merely experimenting with the space, and as a result investment is “still miniscule” compared with other marketing channels. 

Brands are “hesitating because there are very few industry-based standards on what to expect in terms of quality, costs, roles, responsibilities and even performance”, Lim says. However, he argues that the nascent industry just needs time to grow. 

“We expect so much of a very young bunch of people. I don’t think that is fair. They need time to mature. If they don’t mess up big time, and they eventually grow up, there is a good opportunity for the industry to really flourish then.”

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