Key recommendations for running an influencer marketing campaign
These types of posts should be marked as sponsored or paid.
Things have changed in the way companies promote their products. Nowadays, instead of resorting to traditional advertising channels, many companies are currently engaging opinion leaders or influencers to market their products or services or drive brand awareness.
The boom has been such that a tweet or Facebook post from celebrities like Cristiano Ronaldo, Neymar, or Lebron James can cost more than $100,000.
Even though these practices are not forbidden in Costa Rica, companies should be wary of using them. The incorrect implementation of these tools could have negative consequences for the advertiser.
First of all, in compliance with the provisions of the Promotion of Competition and Effective Defense of the Consumer Act (N° 7472), when a company runs an ad, consumers should be able to clearly identify it as such. Hence, sponsored content should be properly disclosed to prevent consumers from misrepresenting any sponsored publication, and helping them understand that the influencer in fact has a relationship with the brand beyond the fact that he/she uses or approves the product.
In other words, the company should make sure that such an opinion or publication is not construed as the influencer’s sincere and honest opinion, but rather as the product of some benefit or relationship with the brand. The fact is that if consumers are aware that a social media celebrity is being paid by or has a relationship with the brand, some of them will not pay as much attention to such a post.
The limited space to include designate an ad has driven certain countries to recommend the use of certain hashtags such as “#ad” or “#sponsored”, as is the case with the Federal Trade Commission (FTC) of the United States.
If this obligation is not met, the company may be engaging in false advertising, as its product could be favorably portrayed, even though the company is failing to state that such an opinion was paid for.
Costa Rica has no specific guidelines or regulations governing these matters, although one could adopt similar solutions to the one suggested by the FTC and include hashtags such as #sponsored, #ad, or the likes thereof, and decrease the risk of engaging in these types of practices.
Another aspect that cannot be overlooked are the specific regulations that govern advertising in each industry. For example, even though sponsored content can be construed as a mere opinion or post, the fact that it is advertising could require the approval of a competent authority.
Likewise, companies that are not allowed to use public figures in their advertising would be breaking the law if they run this kind of marketing campaigns.
In addition, aspects of the relationship between the brand and the influencer are also important and should not be overlooked. Important terms and conditions governing the relationship between the influencer and the advertiser should be negotiated and duly recorded in writing, including aspects such as exclusivity, to avoid that the same person promotes competing brands.
Furthermore, the confidentiality of the details of the relationship should not be overlooked either. This being because influencers might have access to plans and information of the brand that the company does not necessarily wish to disclose.
Last, companies should also consider the personality of the influencer, instead of only focusing on his/her popularity or recognition.
Once they make a post, consumers link this person with the brand, and this could result in them being thought of as brand ambassadors. Hence, companies should use a selective approach when choosing their brand ambassador, thereby avoiding difficult persons or persons who might be involved in a scandal that conflicts with the brand’s values.
In addition to the possible consequences that choosing the wrong influencer could have for the brand, failure to comply with these obligations could also bring about legal consequences, including fines of up to 40 base salaries and lawsuits from competitors.
How to hire an influencer?
- Train the influencer so that he/she is aware of the legal risks that should be avoided.
- Hire an influencer that shares the values of the brand and avoid being lured in only by his/her popularity.
- Govern how to terminate the relationship with the influencer before starting to work together.
- Establish clear and detailed processes to coordinate the content of each post.
- Forbid false advertisement or misleading posts that could adversely affect the brand.
By: León Weinstok, BLP Attorney.
León Weinstok has ample experience in data protection and privacy. He also advises in anti-piracy cases, and in intellectual property rights, especially in brands and copyrights. His work includes the review of advertising materials, drafting of promotion’s terms and conditions, handling of image rights issues and unfair competition.
Article published by El Financiero July 1st, 2017.