Who: The Advertising Standards Authority (ASA) and WeShop Holdings Ltd (WeShop)
Where: United Kingdom
When: 19 July 2023
Law stated as at: 4 August 2023
What happened:
The ASA has recently upheld complaints against ads featured on three influencer’s social media accounts for not making the commercial relationship with the app featured in the ad clear. The ads concerned were for WeShop, a community-based shopping app, which offers shares in the group to customers every time they make a purchase through the app.
Two of the complaints raised were upheld by the ASA, while one was not upheld.
The first ad appeared on Arianna Ajtar’s social media account in January 2023. It displayed her WeShop dashboard with details about the total balance, shares, share price and highlighted its increase. The ad text suggested the app’s benefits and included Arianna’s referral code.
The second ad was seen on Mary Bedford’s social media account in September 2022, promoting WeShop and the referral scheme. Mary claimed to have earned £12,000 worth of shares and highlighted a 50% shareback offer.
The third ad appeared on Rebecca Lamb’s social media account in March 2023, encouraging users to use WeShop through the referral scheme and showcasing her dashboard with the share details, highlighting that the share price was £5.95 and how much her balance had increased.
The ASA received three complaints in relation to these ads:
- All three of the ads, understood as paid-for ads, were not clearly identifiable as marketing communications and lacked clarity about their commercial intent.
- The second ad was challenged as being misleading as it claimed guaranteed share value increase.
- The substantiation of the share price in the third ad (quoted as being £5.95) was questioned.
In its response, WeShop stated that:
- All parties involved were part of the referral scheme and the influencers would receive a percentage in shares of the spend when users signed up to WeShop using their username. This mechanism was not exclusive to the influencers and would be the same for every user.
- In relation to the second ad, the shares were not an investment under the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code), but a zero-priced gift. Since consumers made no decision to buy or subscribe to the shares, they could not be classified as an investment.
- As for the claim in the third ad, WeShop stated that price was quoted on a platform regulated by the Financial Conduct Authority (FCA).
The ASA upheld the complaint in relation to unclear marketing communication and commercial intent. The content did not make it obvious that they were promoting WeShop in exchange for payment, leading to a breach of the CAP Code.
The complaint regarding the second ad being misleading was also upheld. The ASA considered the shares to be a financial product that reflected units of equity ownership of a company. Therefore, it could be considered to be an investment. The ad lacked risk warnings about the variable value of investments.
However, the claim in relation to the third ad was not upheld. Although WeShop was not publicly listed, the price was substantiated on a registered FCA platform.
The ASA ruled that the ads must not appear in their current form. WeShop was advised to ensure marketing communications are clearly identifiable as such. They should disclose their commercial intent and include risk warnings for investment-related content.
Why this matters:
The ruling is a reminder that advertisers should make commercial intent clear in marketing communications.
Advertisers who do not make commercial relationships with another businesses clear run the risk of the regulator considering that advertising is not obviously identifiable as such.
In this case, the ASA has made clear that it considers that anyone with an affiliate link in which they will benefit financially from people clicking through or making purchases must make it clear that they will be benefitting financially from that.
