Influencer marketing is growing rapidly in social media and is used in a wide variety of areas such as fashion, fitness, food or travel. Due to the great response and the potential to set trends, this type of marketing has become a sought-after form of advertising. Brands are increasingly using it to promote their products and services and get their messages across to a large audience. But what impact does this type of advertising have on consumers, and where would EU-wide regulation need to intervene?
The European Parliament’s Internal Market and Consumer Protection Committee (IMCO) commissioned a Study, whose results were presented at an event of the European Economic and Social Committee (EESC) on 9 June 2023. Among other, the study looked at the crucial impact of influencer marketing on consumer behaviour and the dangers, especially for minors.
Credibility and authenticity
A decisive factor in the effectiveness of influencer marketing is the credibility of the people involved. Many people trust influencers because they find their content authentic and personal. They see them as role models and are guided by their opinions and preferences. Catalina Goanta, Associate Professor at Utrecht University, stated with reference to the Study that desire identification and parasocial interaction bind consumers to influencers. Children are particularly vulnerable regarding this type of advertising, but educational attainment and income also play a role.
The challenge of recognising marketing is particularly great for children and young people, as editorial content is difficult to distinguish from advertising and product placements are widespread. In addition, influencers are close to their lives and their recommendations are perceived as those of friends.
Transparency and responsibility
Worldwide, there are at least two million so-called content creators who make their living exclusively from the creation of content. Overall however, according to the Study, hardly any complaints about influencer marketing have been made in the EU. It is argued that this could be due to the relative novelty of the trend and the lack of control by national authorities. In addition, there is a lack of awareness among many about the possibility to file a complaint and also no knowledge that there is a violation of consumer protection law. Nevertheless, some key influencer marketing practices were identified as potentially harmful, namely lack of transparency and unclear disclosure, lack of separation between advertising and content, misleading messages and targeting of vulnerable groups.
It is therefore important that advertising is clearly labelled. Another Study by the Austrian Institute for Applied Telecommunications, commissioned by AK shows that in practice there are shortcomings in complying with the labelling requirements. On the one hand, the relevant legal regulations are repeatedly neglected, and on the other hand, there is a lack of clarity as to how these requirements are to be fulfilled on social platforms. Steven Berger (BEUC) emphasises that many influencers are not even aware of which laws they have to observe. All in all, there is a lot of legal uncertainty. In order to minimise the potentially negative effects, both influencers and advertisers must assume their responsibility.
AK demand for labelling of advertising and EU monitoring body
On the whole, more protection and information is needed. AK demands that it is precisely defined what visible labelling must look like for common forms of online advertising. In addition, an EU monitoring body should be established, which systematically observes these advertising activities in order to ensure the protection of minors as consistently as possible. A new Directive could also contain general principles for all online media and forms of advertising, such as a ban on advertising that impedes action (e.g. pop-up ads that overlay the page content), advertising for games in the app and exploiting the play instinct, such as in the case of loot boxes in games.
AK EUROPA Position Paper: Digital Fairness
European Parliament: The impact of influencers on advertising and consumer protection in the Single Market
European Parliament: Advertising through influencers and its impact on consumers | European Economic and Social Committee
AK Study: Children targeted by influencer marketing (Only German)