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For marketers, technology and social media have advanced far beyond what we comprehended, and consumers are more immersed and more in control than ever before.
As a result, the way businesses go to market and how they utilise social media to represent their brand has to significantly change in order to keep up.
In 2014, we launched our research ‘Keep Social Honest’ which explored the path to positive engagement between brands and consumers on social media. This research identified transparency and trust to be the main barriers when trying to achieve this.
Two years on, we decided to relaunch this research, and worryingly, we found that businesses are increasingly using misleading marketing methods on social media, risking significant legal, financial and reputational damage.
Consumer confusion
Our research shows an increase in the number of consumers who can’t distinguish between marketing and non-commercial content on social media, with only 19% saying they can tell the difference. This compares to 38% of people who said they could distinguish between marketing and non-commercial content in our 2014 study.
We also discovered a rise in consumers citing that they have seen questionable activities from brands on social media. A quarter (25%) have seen a brand fake an online review (compared to 17% in 2014) and 21% have seen a brand pay or incentivise customers to share positive comments on social media without making this clear to other users (up from 14% in 2014).
38% of people said they would lose trust if they discovered content the brand claimed to be real wasn’t genuine
Also, 16% have seen brands pay someone to promote a product or service without disclosing the payment (also up from 14% in 2014) – something influencers, bloggers and vloggers should be asked by marketers to do.
This set alarm bells ringing for us about the way some firms use social media to market to consumers and suggest potentially widespread breaches of the UK Code of Non-broadcast Advertising Sales Promotion and Direct Marketing (CAP Code), enforced by the Advertising Standards Authority (ASA).
Furthermore, the Competition and Markets Authority (CMA) has highlighted that businesses are likely to be breaking the law if they fake online reviews and pay for online endorsements without making this clear to consumers.
Threat of regulatory action
Misleading marketing communications on social media is a real problem for our industry and it’s evident that advertisers aren’t doing enough to ensure transparency. This isn’t always intentional, far from it, but the consequences are still the same.
Businesses face a serious risk of regulatory or legal action, but they also need to understand that the penalties for misleading customers on social media go beyond that. Brands are putting their reputation at risk too.
For example, 38% of people said they would lose trust in an organisation or turn off from it on social media if they discovered that content the brand claimed to be real wasn’t genuine.
Open, transparent and customer-centric marketing is better for business and marketers, especially as people are increasingly using social media to support purchasing decisions. 62% of people said they use social platforms for advice before making a purchase decision, compared to just 17% of those surveyed in 2014.
That’s why we are calling on all organisations that market and communicate through social media to understand what the law is, and ensure they follow it.
Doing so can reap rewards for businesses in the form of increased consumer trust and confidence which help form longer term relationships, instead of short-sighted gains.
To help marketers, we’ve developed some advice to support marketers in a social space:
- Know the law: Familiarise yourself with the CAP Code and the CMA’s guidance on how to comply with the law on online reviews and endorsements
- Make sure those responsible for marketing on social media in your business have the right knowledge and skills: Businesses should adopt social media compliance as a professional development priority for marketing staff, and provide the appropriate training and support
- Set a policy and revisit regularly: Set out the behaviours and standards on social media that reflect your brand and values. Social media and related technologies are constantly changing. So, policies need to be subject to regular review
- Get everyone on board: Make sure all of your employees and any supplier partners you use are aware of your social media policy and commit to complying with it. Make it part of the HR process and supplier contracts
- Make your position public: Once you have a policy in place, let your customers know what they can expect from you and welcome their feedback
