Most shoppers do not trust social media influencers, a survey has indicated.
In the research for BBC Radio 4, 82% of people who took part said it was not always clear when an influencer had been paid to promote a product.
The Advertising Standards Authority (ASA) has launched new guidelines to help influencers stick to the rules.
The Competition and Markets Authority (CMA) is also looking at whether social media celebrities admit when they have been paid to promote a product.
The survey of more than 1,000 shoppers was carried out for Radio 4’s You and Yours by consumer analysts Savvy Marketing.
It found that 54% of 18-to-34-year-old beauty buyers were influenced by their suggestions.
Alastair Lockhart from Savvy Marketing said: “The shoppers of the UK are a knowledgeable lot and tend to be pretty wise when deciding how much to trust an influencer’s recommendations.
“However, we can see from the research that it’s not always clear and a lot of younger people in particular are influenced by their suggestions.”
The growth of social media over the past decade has changed marketing and advertising in many ways. A major part of that has been the rise of “social influencers”.
Cosmetic brands are spending millions of pounds promoting their brands through influencers. They’ve moved away from traditional TV and magazine ad campaigns to Instagram and YouTube.
Online celebrities post video tutorials on those sites, demonstrating how to put on make-up and promoting the products they use.
One of the highest-paid YouTube celebrities is Jeffree Star. Forbes magazine estimates that he earned £18m this year.
Star joined YouTube in 2006 after becoming the most followed person on MySpace. He started posting make-up tutorials and quickly became famous for his dramatic looks.
In 2014, Star launched his own cosmetics brand. He has more than 11 million subscribers to his YouTube channel and nearly 10 million followers on Instagram.
The beauty industry has adopted influencer advertising more fervently than any other industry – and it has had a big impact on sales.
In 2017, the beauty and personal care market in the UK was worth more than £13bn, up by 17% in the past five years, according to figures provided by Statista.
L’Oreal group, the world’s largest cosmetics company, whose annual global sales amount to €26bn (£23.4bn), spends half of its marketing budget on social media.
The group’s director of innovation, Lubomira Rochet, said L’Oreal was embracing influencers.
She said: “Sometimes we consider influencers as our extended marketing teams. They are so creative.
“The return on investment is obviously a bigger concern, especially when you spend 42% of your marketing budget in digital, so we are monitoring the whole area of all our initiatives and influencers are pretty positive.”
The top 10 beauty influencers are all earning hundreds of thousands of pounds from their online posts.
They have become key to selling products – and the impact on sales can be immediate.
Selfridges’ beauty director David Legrand said: “When you have an influencer speak about product straight away, almost within an hour of them promoting something, you can see uplift in sales. Brands are trying to influence the influencers or have influencers of their own.”
But Mr Legrand warned consumers that it’s not always easy to work out when an influencer is being paid and when they aren’t: “It’s sometimes difficult for the public to work out what is and isn’t bias.”
MMMMitchell is a make-up artist from Manchester with more than 800,000 followers on Instagram. He says that as soon as you get a lot of followers, cosmetic brands want to work with you.
He told You and Yours: “I’ve been approached by more and more companies to collaborate with them.
“The more followers you get, the more doors it opens, and that gives me more incentive to grow my followers. I work really hard to build up trust with my followers.”
Watchdogs on alert
When a brand rewards an influencer with a payment, free gift, or other perk, any resulting posts become subject to consumer protection law.
When a brand also has control over the content, they become subject to the UK Advertising Code as well.
The UK’s advertising watchdog, the ASA, said the rules were clear. It has recently published guidance for online influencers.
For its part, the CMA has launched an investigation into concerns that social media stars are not properly declaring when they have been paid, or otherwise rewarded, to endorse goods or services.
As part of its investigation, the CMA has written to a range of celebrities and social media influencers to gather more information about their posts and the nature of the business agreements that they have in place with brands.