Being an influencer has become big business in 2021. What started out as a bit of fun creating content online has since evolved into a serious business opportunity, with large marketing budgets at play and good money to be made.
So much so that it’s become necessary for the industry to be regulated by an official body. The Advertising Standards Authority (ASA) first issued its guidance around influencer marketing in 2018, but the hashtags that influencers are required to use to show brand collaborations are so unclear that consumer confusion is high and misuse is common. In fact, from a survey of 2,500 social media users in the UK, only a quarter (27%) understood the use of advertising hashtags on influencers’ posts.
Clearly something needs to be done, particularly when an increasing number of people are looking to influencers online for more than just fashion and beauty advice. Just under a third (30%) of consumers who have seen an influencer or a celebrity giving financial guidance have acted upon it, rising to 53% when Gen-Z (those aged between 16 and 24) were asked.
That has huge implications, and leading global payments and shopping service Klarna decided that greater transparency and clarity was needed. As a result, it launched its Influencer Council in March 2021, with the aim of developing a best practice guide for influencers and brands working in the financial services sector.
The Council, chaired by presenter and social media expert Christian Howes, brought together brands, influencers, psychotherapists, policy members and the Committee of Advertising Practice (CAP) to provide a well-rounded perspective from across the industry.
Over the course of several months, the Council met to discuss what best practice should look like for influencers posting advertisements for financial service products across social media platforms.
The main aim was ensuring a greater understanding among consumers about owned and paid-for content, and discussions covered a range of angles including responsibility, geography and age range, as well as the use of emotive language and terminology.
From this, the Council created a dedicated set of guidelines that go further than any materials and guidance available today, offering better protection for brands, consumers and influencers.
This includes a recommendation that brands advertising financial services should only work with influencers aged over 21 and should ensure that an influencer’s content is aimed towards a suitable follower base – the recommendation is that fewer than 10% of their followers should be under 18.
It also provides clearer terms for labelling adverts and collaborations, moving away from much-misunderstood hashtags, and issues strong guidelines on the use of language, discouraging words that promote over-consumption or impulsive shopping behaviour.
The full guidance and recommendations have been released in a whitepaper, along with a toolkit of branded stickers, Instagram story templates and badges that help to clearly illustrate the nature of a post.
This toolkit will be available for brands, influencers, consumers and agencies working with Klarna, and can be used as inspiration for other companies looking to put trust and transparency at the forefront of their work with influencers on social media.
AJ Coyne, head of UK marketing at Klarna, said: “By launching the Influencer Council, we set out to learn more about how brands, influencers and consumers interact with posts on social media, and create more clarity among online advertising guidelines.
“Each session has sparked fascinating discussions on responsibility, terminology and transparency, and I believe that we’ve created guidance that is clear, easy to adopt and, most importantly, drives change for the better.
“These guidelines go further than any have done previously and set a precedent for brands across all industries to follow suit.”
The work for the Council doesn’t stop here, either. In an industry that is constantly evolving, the meetings will continue twice a year to ensure the guidelines keep up with the latest trends and platform functionality, with Klarna hoping to develop these UK-based guidelines into something that can be adopted worldwide.
To read more about the Influencer Council, its recommendations and to access the toolkits, download the whitepaper.