With a healthy fortune to their name - thanks to promoting other people’s businesses on platforms such as YouTube and Instagram – many influencers have now taken the leap from social media to the boardroom.  

YouTuber MrBeast, aka Jimmy Donaldson, with an estimated net worth of $700 million, has used his fortune to set up a number of his own businesses and philanthropic endeavours including his “MrBeast Burger” restaurant, his own line of chocolate bar “Feastables”, and a charity “Beast Philanthropy”.

Despite the recent drop in sales, the hydration and energy drink “Prime” backed by content creators Logan Paul and KSI surpassed $1.2 billion in sales last year.

Marianna Hewitt dominated the beauty, fashion, and travel scene with her Instagram content and relatable YouTube vlogs before she went on to be the co-founder of the successful skincare line, Summer Fridays.

When it comes to promoting another company’s products, it’s well known that influencers must clearly identify their content as an #ad.

But what about content in which an influencer talks about their own business - is that an ad and if so, do they have to disclose their commercial link?  

This year we have seen the Advertising Standards Authority (ASA) make two precedent rulings in the space.

Content must be clearly labelled an #ad

Since finding fame on YouTube, Grace Beverley now has a multi-million-pound fitness empire including fitness transformation app “Shreddy”, planner business “The Productivity Method”, and activewear brand “Tala”.

Beverley recently shared videos of herself promoting a coat from Tala with no #ad tag or similar on the content. The brand argued that this was not necessary because followers would be aware of her relationship with the activewear brand.

They also said her connection to Tala was made clear in her TikTok and Instagram bios and pointed out references in the videos to the coat being made in factories "we literally had to beg at the door to get into".

Business-owners posting content online promoting their brands should mark posts as ads, according to ASA and CAP guidelines. Rebutting the complaints, Tala argued there was a “deliberate and clear use of language” in all the ads indicating Beverley’s commercial relationship with the brand as owner, negating the need for “#ad” to appear on the post. 

The ASA countered this by saying that social media users who saw the post and didn’t follow Beverley would likely be unaware of her connection to the brand, and that reference to the brand was only made part-way through the video, “so a user was required to engage with the ads before they heard them”.

Tala then advised that marking the posts as adverts would have made them misleading, as consumers would have viewed Beverley as an “arm’s length influencer” with no commercial interest in the business, who was “merely promoting goods because she was being paid to do so”. 

The ASA ultimately ruled that all social media posts by Beverley about Tala must ensure the commercial intent is clear, with “#ad” or an equivalent marker on show.

According to the ASA’s influencer guidelines, influencers and brand owners:

...need to make clear in any content where [they] feature or refer to the brand, that it’s advertising. This is the case even when the brand doesn’t know if or what you’re creating.

Any business link must be disclosed

Steven Bartlett is an entrepreneur, speaker, investor, author, BBC Dragon and the host of one of Europe’s biggest podcasts “The Diary of a CEO”.

This week the ASA banned ads in which Bartlett promoted products for Huel and ZOE without making it clear that he has business interests in both companies.

In the advert for ZOE, a health testing and diet advice company, the 31-year-old is pictured with a patch on his arm alongside a quote saying: "If you haven't tried ZOE yet, give it a shot. It might just change your life".

One of the two banned ads for meal supplement company, Huel, saw Bartlett in a similar situation, pictured drinking one of their products with a quote saying: "This is Huel’s best product".

In the second advert, he was seen in a video saying: "This is the best product that Huel have released".

The ASA said in it’s ruling that they:

...considered that many consumers would interpret the ads as featuring a testimonial from Steven Bartlett about one of Huel’s products". "Because the ads omitted material information about Steven Bartlett’s position as a director at Huel, we concluded they were likely to mislead.

The watchdog ruled that the ads could not appear again in their current form and that both companies must make sure future adverts don't "misleadingly omit" information about commercial relationships.

The ASA concluded by saying that the ads, seen on Facebook in February, could be mistaken for an independent review and therefore misled consumers.

Why this matters

These rulings by the ASA are just part of a wider crackdown by the regulator on the influencer marketing space.

It is now clear that should an established influencer have any commercial interest in a brand, any such content made about it by them must be clearly identifiable as an #ad and they must disclose the nature of their commercial link.

However, what if the influencer has only a small number of shares in a company as part of a wider investment portfolio – would they have to declare that commercial link? What is, and what isn’t, considered a ‘commercial interest’ will need some more explanation from the ASA.

If you’re an influencer, agency or brand and need legal support with your next campaign, just let us know.