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NEWS9 June 2016

Misleading social media marketing putting businesses at risk

Legal Media News UK

UK — New research into the prevalence of ‘questionable’ marketing on social media sites indicates widespread breaches of the UK Code of Non-broadcast Advertising Sales Promotion and Direct Marketing (CAP Code).  

The Keep Social Honest study by The Chartered Institute of Marketing (CIM) reveals a significant increase in the number of people who can't distinguish between marketing and non-commercial content on social media. Just 19% say they can tell the difference. This figure was 38% in 2014.

The research also showed a rise in consumers saying that they had seen questionable activities from brands on social media: 25% said they had seen a brand fake an online review (compared with 17% in 2014 ), 21% had seen a brand pay or incentivise consumers to share positive comments on social media without making this clear to other users (an increase from 14% in 2014 ), and 16% had seen brands pay someone to promote a product or service without disclosing the payment (up from 14% in 2014 ).

This activity is also affecting consumer confidence: 38% of the survey respondents said they would lose trust in an organisation or would ‘turn off from it’ on social media if they discovered that content the brand had claimed to be real wasn't genuine. 

The UK CAP Code states that any advertising must be ‘obviously identifiable as such', and violations can lead to Advertising Standards Authority (ASA) sanctions. These include businesses being told to withdraw advertising from their own sites, have paid-for search advertisements removed, and being denied access to advertising space. 

In addition, the Competition and Markets Authority (CMA) has highlighted that businesses are likely to be breaking the law if they fake online reviews or pay for online endorsements without making this clear. 

“Misleading marketing communications on social media is a real problem and it’s evident that advertisers aren’t doing enough to ensure transparency," said Chris Daly, chief executive of CIM. "This isn’t always intentional – from previous research, we know that 52% of marketers have little or no understanding of the regulations affecting their communications on social media – but the consequences are still the same.

“Businesses face a serious risk of regulatory or legal action, but they also need to understand that the penalties for misleading customers on social media go beyond that. Brands are putting their reputation at risk too.

“We are calling on all organisations that market and communicate through social media to understand what the law is, and ensure they follow it. Doing so can reap rewards for businesses in the form of increased consumer trust and confidence. Not doing so can have damaging results.”

@RESEARCH LIVE

1 Comment

12 months ago

Excellent article and even more relevant two years later! We have partially republished your article with your reference to our student news post search at https://cnri.edu

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