Call for more honesty and transparency around social media 'influencer' advertising
Rachel Klaver used to get loads of free stuff but she couldn't pay the rent.
As a relationship blogger in the early 2000s, almost every day a courier would arrive with some new product a PR company hoped she'd plug.
"If I could have paid my rent [using] free product I would have been a millionaire I reckon," she says.
"But I couldn't survive on all the free stuff. I was having to use really good quality shampoo in the washing machine because I couldn't afford washing powder."
She didn't like who she was becoming. "I had this horrible sense of entitlement. It was very much 'how little can I do to get the free item?'
"My Skechers [shoes] for example ... I just had to have one pic of me on Instagram wearing them and I got my free pair.
"I had an epiphany of, actually, how is this serving the brand? It started making me feel quite dirty."
Klaver felt she was under-valuing herself so retrained and now runs a marketing agency, Identify, which uses social media influencers on some campaigns.
She wants to see influencers paid fairly and believes they should always declare when they've received something for free or been paid to promote it.
That's not always happening, she says.
"It's the Wild West. We need influencer marketing ethics to catch up to how [mainstream] media is."
Industry players are scrambling to catch up with overseas jurisdictions, where in places such as the UK it's a criminal offence to blog, use brand ambassadors or seed viral ads while falsely representing yourself as a consumer.
Here, such content is covered by the Advertising Standards Authority code of ethics, which requires advertising material to be declared as such.
The ASA is embarking on an education and enforcement campaign to crack down on those flouting the rules, while the Public Relations Institute is about to release a new code of conduct for influencer marketing which will require paid content to be declared.
WALL-TO-WALL PRODUCT PLACEMENT
An influencer is defined as a blogger or social media user with a decent-sized following who is seen as an opinion leader in their field.
In the industry they talk about "macro" influencers - the likes of models Kendall Jenner, Cara Delevingne and Gigi Hadid who, with 77 million followers between them, reportedly get paid up to $300,000 for a single, sponsored post.
New Zealand has few in that league, although the likes of Lorde, Richie McCaw and Dan Carter could conceivably command six-figure sums, experts say.
Celebrities promoting stuff is as old as the hills - as far backs as the 1760s royals endorsed products and when Marilyn Monroe said all she wore to bed was a few drops of Chanel no.5, sales exploded (Monroe wasn't paid).
But it's "micro" influencers who are proving most attractive to advertisers – people you've probably never heard of with much smaller audiences but whose followers tend to be more deeply engaged.
These people can earn anywhere from $50 to $500 for a post.
Research shows that consumers are heavily influenced by bloggers and actively look online for recommendations on products.
In the past two or three years, influencer marketing has mushroomed in New Zealand, to the point where there are now several agencies specialising in the field.
There are no figures on how much is spent on influencer marketing, but overall social media advertising revenue grew by 66 per cent last year to $39m, based on agency bookings.
It's understood some of New Zealand's big corporates are spending up to $100,000 on social media influencer campaigns.
Some Instagram, Twitter and Facebook pages contain wall-to-wall product placements and it's almost impossible to tell whether the person has a commercial arrangement with the company, has been sent the goods as free samples or just happens to like the brand.
For example, last week Megan Robinson, editor of fashion website thread.co.nz, posted a picture on Instagram of a packet of Countdown's Signature range soup and a loaf of bread, with the comment "yum, yum Mediterranean soup and fresh cheesy bread for dinner".
When questioned, she admitted the post wasn't clear enough, changed the wording to thank Countdown for sending the food and added #gifted.
Several Super Rugby players have been tweeting and posting pictures on Instagram of themselves with My Food Bag packages, without explanation.
Some of their followers are confused, one writing on a TJ Perenara post: "I'm starting to feel like they got it for free!"
It turns out the players are "brand ambassadors" for My Food Bag.
Of course sending freebies to media outlets is nothing new - there is a long history of beauty and travel sections of newspapers full of sponsored content, usually declared, and product placement on TV shows such as The Block has reached saturation point.
Fashion blogger Monique Doy is new to the game and says when she first started, she would sometimes forget to disclose gifts, promotions and sponsored posts.
She's now strict about disclosure but says many aren't. "Everyone has to have their own ethics around what they disclose and what they don't. Consumers are so smart now, they know when something is being sold to them."
Celebrities can be slack about it, Doy says. "The Kardashians are talking about things on Instagram all the time without saying it's sponsored."
Kardashian spouse and social media influencer Scott Disick was mocked when he accidentally posted the PR company instructions – "at 4pm write 'keeping up with the summer workout routine" – on Instagram when plugging a weight loss supplement.
Disick is likely to have been paid thousands or even hundreds of thousands of dollars to promote the brand.
Doy is not yet making a living out of it, but feels a need to be ethical.
"I'm aware that if I say something is great... people are going out and buying it, so I feel really responsible for the money they spend. I feel the need to be super-honest."
"LIE BY OMISSION"
Dani Revell was one of the first to jump on the influencer bandwagon, setting up an agency, We Are Anthology, two and a half years ago. It specialises in matching brands with influencers.
She's surprised that in that time, nothing much has changed in terms of transparency. She doubts people are deliberately trying to deceive their audiences, but says not declaring paid content is "kind of like a lie by omission".
"This is a professional industry that makes money, there should be rules around it. Yes it's kind of popped out of nowhere but people make livelihoods out of it, so yes there should be laws.
"In the meantime, we always push our influencers to be honest and open. You're going to get a lot deeper and richer relationship with your audience if you say 'yes, I'm working with this brand' rather than [not disclosing it] and having it blow up."
Deborah Pead of Pead PR has been in touch with the ASA about her concerns around influencer marketing.
"We have found more frequently, especially with celebrity type ambassadors and endorsers [they are] reluctant to disclose that they've been paid for something.
"They feel that in some way it's going to damage their own brand. We had a bit of a push-back on this, and as a result there are some people we won't engage with."
Pead says it's a fast-evolving area and rules and guidelines "are being made up on the run. If this form of influence is going to be successful, we do need solid guidelines that keeps the integrity and honesty intact.
"We don't want people to try to deceive their audiences, we want people to be proud to represent our brands."
Pead PR is behind the My Food Bag campaign which has relied heavily on sending free product to influencers for review.
The firm argues that in those circumstances the fact the product was gifted doesn't need to be disclosed because there is no editorial control and the influencer could just as easily write something bad.
"I don't stomach that," says Rochelle Shaw, head of "social talent" at influencer agency Bloggers Club. "Product, as far as I'm concerned, is also a payment."
Her firm has encouraged influencers to use the hashtag #officialblogger on all paid or sponsored material.
Klaver, of Identify Marketing, is not a fan of campaigns that rely on sending free product to large numbers of influencers.
"I find it insidious. Suddenly there's 150 people I follow all talking about [a brand]. I start to feel like you're bombing me with it.
"It ends up de-valuing the product if the only way you can get someone to talk about it is to give it away for free en masse."
The government agency New Zealand Trade and Enterprise has produced an advice sheet for businesses on how to engage with social media influencers which says "there's nothing quite like a surprise package of your awesome products to get an influencer excited about your brand".
It also warns that approaching influencers who are represented by agencies comes at a "cost" because their audiences are "generally well aware that these posts are paid for".
Klaver describes this advice as naive. "It could annoy a whole lot of people."
She believes "strategic bombing" of influencers by PR firms has a short shelf life. "We're too clever as a nation to put up with that."
An article on international media and marketing site digiday.com says the relationship between brands, agencies and influencers has soured.
It quotes a social media executive as saying there are simply too many influencers producing low quality content.
"We threw too much money at them and did it too quickly," the unnamed executive says. "So in 2014, they were making $500 to show up and take some photos. Then it became $1,500. Now it's hundreds of thousands of dollars. They no longer value their art."
Bodo Lang, senior lecturer in marketing at the University of Auckland, says New Zealand is lagging behind other countries in terms of regulation of online endorsements.
"The marketplace is...not transparent at all – who is being endorsed and who's not."
Lang says regulation is needed as influencer advertising becomes more prevalent.
"There will always be opinion leaders, whether online or offline. There will always be people that other people look up to - politicians, sports stars, music stars, TV personalities. It's a phenomenon that will be with us for a very long time."
- Sunday Star Times