‘Influencer’ marketing needs legal and ethical tweaks
New advertising model is double-edged sword
How easy is it to become an “influencer” nowadays? If luck is on your side, it can be extremely easy. More money than one can ever dream of will pour in. Then tax authorities are very likely to follow, along with some ethical questions like whether it is all right to pose with a bottle of beer and upload it to Instagram, or whether it is perfectly justifiable to tax the poster.
What was predicted a few years ago is happening, and sooner than many thought would occur. The social media were widely tipped as a new hotbed of advertising activities. People were choosing new cars or children’s trolleys based on what their “friends” said were good, not on what was seen in newspapers, according to the prevailing market analyses from the early 2010s. That gave birth to so-called influencers, who were basically men on the street who did not have to own big media companies.
To be an influencer, all one needs is a sizeable number of “followers”. The ease with which a person can become a big-earning influencer can be seen as both good and bad news. On the one hand, it is threatening to take big media companies out of the equation when it comes to advertising, a situation that seems fair and democratic. On the other hand, the phenomenon is also giving birth to many “fake” influencers who have purchased “likes” and displayed pretentious comments, and “unqualified” influencers who can lead their following astray by recommending products they know practically nothing about.
In responsible societies, marketing influencers are supposed to focus on products or services they are familiar with. For example, someone who travels a lot can become a marketing influencer for hotels, restaurants or airlines, or a car racer can advertise auto accessories. With advertising money shifting more and more to online marketing, many influencers have crossed the lines, and Thailand seems to suffer a bad case of these fake experts.
When social media first broke onto the scene, everyone said it would be great for customers, because conventional advertising at the time relied on celebrities who did not even use the promoted products in real life. Now, social media influencers are doing just the same, and there are more of them than traditional celebrities.
This year is supposed to see a big boom in influencer marketing. A reliable global data analysis shows that some 85 per cent of marketers are now using influencer-marketing strategies. Industries most attracted to this new way of marketing include food and beverage, tourism and cosmetics. The increasing popularity of influencer marketing has a lot to do with people’s dislike of the hard sell, and that they feel comfortable following the lead of the choices of presenters, albeit those they keep track of on social media.
Consequences involve the aforementioned problem of unqualified influencers, and the important question of how to effectively tax people in this growing business. For one thing, clothes have to be worn, bags carried and liquor consumed at parties. There are clear-cut cases of influencers acting like presenters, which is easy to deal with, but there are grey areas as well. In some countries, there have been crackdowns on the latter, confirming the abundance of posts not clearly identifiable as advertising.
A lot of legal and ethical adjustments are required. It’s still early days, so any necessary measures should be implemented now. It will be a lot harder to control the situation when the grey areas become greyer and more people enter what looks like a new gold mine.