The case of influencer Chiara Ferragni, fined €1 million by Italy's antitrust authority for allegedly misleading consumers, has been shared all over social media. With the rise in influencer marketing, what steps should consumers take to protect themselves from shady practices?
ADVERTISEMENTItaly's top influencer, Chiara Ferragni, was recently found by Italy's antitrust authority (AGCM) to have misled customers in a Christmas cake advertisement. She claimed that sales of food company Balocco's pandoro - a traditional Italian sweet bread popular at Christmas - would support a children's hospital in Turin.
Contrary to her claims, Balocco had made a one-time €50,000 payment to the hospital months before the product's launch, with the AGCM ruling that product sales did not contribute to charitable donations.
Ferragni and Balocco were fined €1 million and €420,000 respectively for misleading customers.
The event polarised public opinion widely, with many defending Ferragni's good intentions while others defining the case as 'immoral'.
Italian politicians, including Prime Minister Giorgia Meloni, voiced their discontent. Meloni criticised influencers for promoting 'expensive cakes that create the illusion of charitable contributions', without directly naming Ferragni.
Ferragni, who is now also facing accusations from some newspapers for similar misleading Easter egg promotions, posted a video accepting the antitrust findings and admitting a "mistake in good faith... to link a commercial activity with a charitable one", and said she will be donating €1 million to the hospital.
Last Christmas, Balocco's Ferragni-branded "Pandoro Pink Christmas" sold for over €9, more than twice the price of Balocco's regular pandoro.
As influencer marketing continues to grow, a market estimated to be worth some €20 billion, how does this type of advertising affect consumers' choices, and what should consumers be mindful of in advertisements?
Euronews Business talked to Benedetta Crisafulli, a marketing associate professor at Birkbeck, University of London, and the author of Competence is Power: How Digital Influencers Impact Buying Decisions in B2B Markets.
The power of influencers on customer decisions
According to Crisafulli, the success of influencer-driven promotional campaigns is tied to two main factors: the emotional bond consumers establish with the influencer and the identification process they undergo regarding the influencer's life.
"One highlighted aspect of my research is termed 'Para-Social Interaction.' Consumers develop a one-sided relationship, akin to idolising a celebrity, when engaging with influencers. It involves feelings of closeness or familiarity that consumers experience towards these figures, despite the lack of real interactions," Crisafulli said.
"Another significant aspect is consumers' sense of relating to the influencer. They perceive the influencer as someone akin to themselves, fostering a feeling of connection and personal growth. Scientific evidence supports the notion that these processes significantly influence our purchasing behaviour."
In Ferragni's case, there's also the aspect of charitable donations, Crisafulli noted. Consumers are led to believe that a part of their spending will go towards helping needy children, taking advantage of a time of year, like Christmas, when people are more inclined to donate.
The associate professor also suggested that Ferragni's image will suffer from her apology message, as she's not only apologising; she's stating her intention to donate to the hospital, and consumers may question her motivation for doing so.
Caution: A duty for consumers and regulatory authorities
Crisafulli highlighted that influencer marketing is expanding, and a widening range of business sectors, extending beyond food, fashion, or beauty, will progressively make use of this advertising method.
As the trend expands, what should consumers be particularly cautious of?
"We should be vigilant consumers," Crisafulli said. "Prior to making a purchase, it's beneficial to explore the product and utilise fundamental marketing principles that can assist in our decision-making. One essential aspect is to pay attention to the product's label to gather more information before buying anything."
She added that the attention shouldn't just be on the consumer; safeguarding the consumer should be one of the responsibilities of regulators. Currently, there isn't any European-wide regulation on influencer marketing, but all influencers in Europe must disclose their commercial partnership and the company they're promoting in their communication.
ADVERTISEMENT"We also require a legal process for protection. We require frameworks crafted by policymakers," said Crisafulli.
Just this past October, the European Commission announced its intention to intensify scrutiny over the business practices of social media influencers.
The Commission plans to collaborate with national authorities to monitor online content, aiming to detect misleading testimonials and product endorsements that may deceive customers.
On a national level, certain European countries like France have also recently introduced laws to curb influencers' promotion of dangerous products and trends.
