Understanding legal and ethical issues is in fact crucial for organizations and individuals to maintain compliance and uphold integrity. These considerations guide decision-making and ensure accountability in various situations. This guide explores key aspects to help you navigate challenges effectively. On this occasion, Welcome to “Your Time-wasting Life on Social Media: Exploring Business Opportunities – SM4B Project.” with the reference number 2023-1-PL01-KA210-YOU-000159357. This time, let’s delve into how social media can transform from a pastime into a lucrative business venture. For other posts, you can click this link.

Fundacja Zdrowia i Rozwoju Czlowieka is this project’s coordinator, working with L4Y Learning for Youth GmbH and MAT Mevhibe Ates Teknoloji Vakfi.

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Learning Objectives: Legal and Ethical Issues

1. Understand the legal requirements and ethical considerations in influencer
   marketing.
2. Recognise the importance of transparency and compliance in sponsored
   content.
3. Identify ethical marketing practices and strategies to maintain integrity.
4. Explore challenges and solutions in ethical influencer marketing.
5. Learn how influencers can lead by example in promoting responsible marketing
   practices.

Introduction: Legal and Ethical Considerations in Influencer Marketing

In today’s digital world, influencer marketing is a great way for brands to reach their audiences. But with that power comes responsibility. It is important for influencers to know the legal and ethical rules so they can be open and honest. Just like food labels tell people what is in the food, influencers need to let their followers know when they are being paid to promote something. This honesty helps build trust with followers. Social media platforms like Instagram, YouTube, and also TikTok have changed how brands connect with people. With their large followings and the trust they have built, influencers are now key players in this process. But as influencer marketing grows, there are more rules from the government and more public attention. New influencers need to learn how to be creative while also following the rules.

Disclosures and Compliance: Legal and Ethical Issues

Influencers must follow the law when telling people about their brand partnerships, like the Federal Trade Commission (FTC) rules in the United States. They need to be clear about their relationships with brands by using hashtags like #ad or #sponsored that are easy for the audience to see (FTC, 2023). The Advertising Standards Authority (ASA) in the UK also says influencers must be honest in their advertising (ASA, 2023). If they do not follow these rules, influencers can face big penalties and lose credibility, like when a fashion influencer got backlash for not disclosing a paid partnership.

Being transparent is not just about following the law—it is also the right thing to do. When influencers do not disclose their partnerships, they can mislead their audience and lose trust. For example, a popular YouTuber faced major backlash when people found out they had hidden a brand relationship. This hurt their reputation and cost them followers.

Ensuring Compliance with Regulations

Influencers need to follow laws and rules, like GDPR in Europe and COPPA in the United States, especially when working in different regions. Being clear about brand partnerships is not just a legal duty, it’s also a way to keep trust with followers. Influencers should stay updated on changes in laws, especially since AI tools are now being used to check if they are following the rules. For example, GDPR has rules about how personal data is used, which affects how influencers handle information about their audience. COPPA has rules about content for children. Staying informed helps influencers avoid legal problems and keep their good reputation.

Ethical Marketing Practices: Legal and Ethical Issues

Ethical marketing is more than just following the law; it is about being real, open, and honest. People like influencers who are genuine and actually use the products they talk about (Audrezet et al., 2020). Influencers should be honest in their reviews and not promote products they do not believe in (Boerman, 2020). Using clear hashtags like #ad helps audiences know when a post is sponsored, which builds trust (De Veirman & Hudders, 2020). Influencers should also avoid buying fake followers or using bots to boost their engagement. This is dishonest and gives brands a false idea of their influence (Gräve, 2017).

Brands are now using tools to spot fake followers and make sure they work with honest influencers (Ilicic & Webster, 2016). Influencers who use these tricks can lose their credibility and hurt their long-term reputation (Stubb & Colliander, 2019). A good example of ethical marketing is a recent skincare campaign where influencers used clear #ad labels and also shared honest reviews. This approach helped build trust and increased engagement from followers (Jin & Muqaddam, 2019). When influencers truly believe in the products they promote, their audience trusts them more, which leads to stronger brand loyalty (Ki et al., 2020).

On the other hand, influencers who only care about money and promote products they do not use risk losing their audience’s trust. Once trust is lost, it is very hard to get back. Ethical marketing helps influencers build a long-lasting brand based on honesty and also integrity (Audrezet et al., 2020).

Challenges and Solutions in Ethical Marketing

One of the biggest challenges in ethical influencer marketing is dealing with fraud, like buying fake followers or fake engagement. These dishonest practices can hurt the trust between influencers, brands, and their followers (Stubb & Colliander, 2019). When influencers use fake followers or fake engagement, it creates a false picture of how popular they are, which can mislead brands and audiences. This kind of behavior can make people question whether influencers are really trustworthy.

How Brands Detect and Prevent Fraud

Brands are now using advanced tools and AI to detect these behaviors and also stop working with dishonest influencers (Ilicic & Webster, 2016). These tools can analyze engagement patterns to see if the followers are real or just fake accounts. Influencers who get caught using fake followers can also lose brand deals and their credibility, which can hurt their ability to get future partnerships and grow their audience (Gräve, 2017). Once trust is broken, it can be very hard to rebuild.

The Importance of Transparency

Being honest is one of the best ways to promote ethical practices. Influencers should clearly say when they are paid to promote something, following rules like those from the FTC (Evans et al., 2017). Being upfront about paid partnerships shows followers that the influencer values transparency. Influencers are also encouraged to only promote products that match their personal values, which helps build trust with their audience (Audrezet et al., 2020). When influencers genuinely like and use the products they promote, their audience can tell, and it makes their recommendations more meaningful.

Building Genuine Relationships with Followers

Young influencers should focus on building real relationships with their followers and creating content that matches their true interests (Jin & Muqaddam, 2019). This means interacting with followers regularly, listening to their feedback, and also understanding what they enjoy. By engaging with their audience in a meaningful way, influencers can create a connection that feels genuine and personal. They should also share parts of their lives that make them relatable, showing both the ups and downs.

The Long-Term Benefits of Authenticity

By staying true to themselves and being honest, influencers can create a more loyal and engaged audience that respects their authenticity. When followers see that an influencer is genuine and not just trying to make money, it makes the connection stronger. This kind of trust can lead to more support for the influencer’s projects and long-term growth in their social media presence.

Conclusion: The Future of Ethical Influencer Marketing

As influencer marketing rules continue to change, influencers have a chance to lead by example. By being transparent and also authentic, influencers can build long-term relationships with their followers and set higher standards for responsible marketing. Being a role model in this field not only helps individual influencers grow but also helps make the whole industry more trustworthy. When influencers are open about their partnerships and genuinely care about the products they promote, their followers appreciate it, which leads to stronger connections and more positive engagement.

The future of influencer marketing depends on those who are willing to be ethical and keep up with changing rules. By being honest and transparent, influencers can build loyal audiences and also help create a more ethical industry. Influencers who commit to these values can make a big impact by setting examples for others to follow. Ethical practices help create a supportive community where followers feel respected, and brands feel confident in their partnerships. This kind of trust benefits everyone involved and also leads to more sustainable success for influencers, brands, and audiences alike.

Call to Action: Legal and Ethical Issues

Young influencers are encouraged to educate themselves on legal and ethical practices in influencer marketing. By doing so, they can build a loyal and engaged audience while maintaining integrity and compliance with regulations.

Reference 1: Legal and Ethical Issues

1. Federal Trade Commission. (2023). Disclosures 101 for Social Media Influencers. Retrieved from https://www.ftc.gov/business-
2. guidance/resources/disclosures-101-social-media-influencers
3. Advertising Standards Authority. (2023). Influencer Marketing Guidelines. Retrieved from https://www.asa.org.uk/advice-online/influencers-guide.html
4. Audrezet, A., De Kerviler, G., & Moulard, J. G. (2020). Authenticity under threat: When social media influencers need to go beyond self-presentation. Journal of Business Research, 117, 557-569. Retrieved from https://www.sciencedirect.com/science/article/pii/S0148296318303229
5. Boerman, S. C. (2020). The effects of the standardized Instagram disclosure for micro- and meso-influencers. Computers in Human Behavior, 103, 199-207. Retrieved from https://www.sciencedirect.com/science/article/pii/S0747563219303437
6. Evans, N. J., Phua, J., Lim, J., & Jun, H. (2017). Disclosing Instagram influencer advertising: The effects of disclosure language on advertising recognition, attitudes, and behavioral intent. Journal of Interactive Advertising, 17(2), 138. Retrieved from https://www.scirp.org/reference/referencespapers?referenceid=3230759
7. Gräve, J. F. (2017). Exploring the perception of influencers vs. traditional celebrities: Are social media stars a new type of endorser? Journal of Media Business Studies, 14(2), 94-111. Retrieved from https://dl.acm.org/doi/10.1145/3097286.3097322

Reference 1: Legal and Ethical Issues

1. Ilicic, J., & Webster, C. M. (2016). Being true to oneself: Investigating brand authenticity in the context of social media influencers. European Journal of Marketing, 50(9/10), 1694-1712. Retrieved from https://www.researchgate.net/publication/293337407_Being_True_to_Oneself_Investigating_Celebrity_Brand_Authenticity
2. Jin, S. V., & Muqaddam, A. (2019). Product placement 2.0: “Do brands need influencers, or do influencers need brands?” Journal of Brand Management, 26(5), 522-537. Retrieved from https://www.researchgate.net/publication/331031840_Product_placement_20_Do_Brands_Need_Influencers_or_Do_Influencers_Need_Brands
3. Stubb, C., & Colliander, J. (2019). “This is not sponsored content”—The effects of impartiality disclosure and e-commerce platform affiliation on Instagram influencer credibility. Computers in Human Behavior, 98, 210-222. Retrieved
   from https://www.researchgate.net/publication/332954608_This_is_not_sponsored-content-_The_effects_of_impartiality_disclosure_and_e-commerce_landing_pages_on_consumer_responses_to_social_media_influencer_posts
4. De Veirman, M., & Hudders, L. (2020). Disclosing sponsored Instagram posts: The role of material connection with the brand and message-sidedness when disclosing covert advertising. International Journal of Advertising, 39(1), 94-
5. Retrieved from https://www.researchgate.net/publication/331028395_Disclosing_sponsored_Instagram_posts_the_role_of_material_connection_with_the_brand_and_message-sidedness_when_disclosing_covert_advertising
6. Ki, C. W., Cuevas, L. M., Chong, S. M., & Lim, H. (2020). Influencer marketing: Social media influencers as human brands attaching to followers and yielding positive marketing results by fulfilling needs. Journal of Retailing and Consumer
7. Services, 55, 102133. Retrieved from https://www.researchgate.net/publication/341054475_Influencer_marketing_Social_media_influencers_as_human_brands_attaching_to_followers_and_yielding_positive_marketing_results_by_fulfilling_needs