Behind TikTok's sweeping new controls on influencer marketing

In recent days TikTok has gained attention for banning influencers from promoting investment and cryptocurrency promotion on the youth-friendly app. As it turns out, those changes are part of a sweeping new policy TikTok has quietly implemented to take greater control over a range of influencer activities, covering everything from legal services to dating brands. The moves come as the upstart app matures into a major brand marketing force, leading it to deal with newfound responsibilities while it also tries to hold onto its freewheeling ethos that has made it so popular with creators. “TikTok is going to have to balance the fine line of the First Amendment against doing what is perceived to be the right thing,” says Greg Paull, co-founder and principal at marketing consultancy R3. “What they may lose in terms of fringe engagement, they should gain in terms of a more reliable and safe space for marketers. Their challenge is going to be on where to draw the line next. Will discussion on stocks such as GameStop be restricted as it was with Robinhood? And will these and other restrictions restrict free expression from influencers—it becomes a slippery slope.” The changes from the ByteDance-owned social media app are contained in a new strict branded content policy that sits within a new branded content section under its business and creator monetization rules, separate from its ads policy. A TikTok spokesperson says the new rules were introduced on May 25, along with a new method the app is testing to make it easier for creators to disclose when they are posting on behalf of a brand. “Our policies are designed to ensure a safe and positive environment for our community,” said a TikTok spokesperson. TikTok is now requiring creators to enable a new brand content toggle that is currently being tested with creators with more than 10,000 followers. Even if creators don’t have access to the new toggle, the rules are clear: Creators have to disclose when they are posting branded content, which TikTok defines as when a creator receives “something of value from a third party such as a brand” in exchange for a post. TikTok states that all branded content will be reviewed by its moderation team. The new rules and toggle were introduced a few days before TikTok was called out in a 20-page study from the Mozilla Foundation that claimed the platform did not monitor or enforce its rule that influencers disclose paid partnerships or label sponsored posts as ads. The study mostly looked at the shady affairs of political influencers on the platform. At the time, a TikTok representative said the platform was making it easier for users to label non-political paid posts. Toggle on for #Ad The new branded content toggle appears for creators before they post any content on the platform. When enabled, the toggle adds an #Ad disclosure to the description of the video posted, the rules state. Creators have to first turn on the toggle in options on the post screen to make it active, or if a creator includes an ad disclosure in a video, the platform will automatically enable the branded content toggle. Creators can also link videos to brand campaigns by entering campaign details or a code provided by the advertiser. For creators within the TikTok Creator Marketplace, their linked campaigns will also share post analytics with brand partners. There is also a note on music licensing for branded content, advising brands and creators it is required to use music from the app’s commercial music library or confirm rights to use other music. Stricter rules Previously, TikTok's attempt to provide transparency involved working directly with creators that belonged to its creator marketplace, as well as brands, to ensure content was labeled as sponsored or as an ad. However, as Mozilla’s report showed, and other influencer marketing experts have confirmed, there were many branded content posts that slipped through unchecked, especially for creators not involved in the creator marketplace. TikTok’s new global branded content policy is in line with other platforms’ branded content policies but is even more stringent in certain areas. For one thing, TikTok doesn’t differentiate between “prohibited” or “restricted” branded content like Facebook and Instagram do; all 17 industries TikTok lists are simply listed under “prohibited.” It also lays out country-specific prohibited industries in the U.S., Europe and Canada. The prohibition of the promotion of alcohol, drugs, gambling, politics, weapons and adult services, with an exception for family planning, are similar to policies in place from Facebook, Instagram, Twitter and YouTube. But TikTok has added several other new categories to its prohibited list not seen in other platforms’ branded content policies (regardless if there are internal rules that exist) such as live video services, age-rated films, TV shows and games, and professional services like accounting, legal and immigration services. TikTok is also taking a harder stance when it comes to influencer activity involving financial services and dating services. For instance, it bans influencer promotion of management of money assets, loans, buy-now-pay-later services, foreign exchange, pyramid schemes, get-rich-quick schemes and cryptocurrency. Facebook and Instagram, by contrast, require that the brand, or what it calls “business partner,” receive written authorization from Facebook to promote cryptocurrency products and services. YouTube also places financial services, including those related to investment and cryptocurrencies, as a restricted category where advertisers might need additional requirements with the platform in order for their ads to run, but does not prohibit them. Twitter’s ad policy applies to all creator branded content, and like TikTok, prohibits the promotion of items like cryptocurrency, payday loans and bail bonds, but does not cover TikTok’s entire financial services list. The extra focus on financial services is not surprising as the number of crypto and investment scams have skyrocketed durinig the pandemic. Also, investing app Robinhood was sued and testified before Congress in a very public hearing after it chose to halt the purchase of GameStop stock and accused of doing so to appease Wall Street business partners. TikTok also prohibits the promotion of dating services, when others like Facebook, Instagram and YouTube place those under a restricted umbrella. There are also open-ended categories like “products and services that enable dishonest behavior” and “other prohibited products or services” that includes items such as international brides, abortion, funeral services and even wild flora. “TikTok’s policy is purposefully open-ended, allowing it to exert greater control and vet platforms and services that come to life in the coming years,” says Chris Emme, chief revenue officer at Display, a social platform and livestream channel of creator content. A balancing act Even with firm rules and consistent enforcement, branded content is not easy to police, especially for a platform that quickly rose to prominence with more than 100 million users. It’s been an issue that the Federal Trade Commission regularly investigates. While brands particularly impacted by the branded content rules, such as those in financial services and dating services, might balk at the new prohibitions, other brands and influencers not tied to those categories welcome more transparency, industry experts say. “It benefits the platform as a whole because it engenders transparency and trust,” says Eric Jacks, chief strategy officer at influencer marketing agency Collab. “As TikTok continues to grow its relationship with brands, this is a tool that helps with that.” Mary Keane-Dawson, group CEO at influencer marketing agency Takumi, believes a firmer branded content policy is exactly what is needed for TikTok as it matures. It is after all a media company originally from China that now has to “retro-engineer its own business” to fit the growing influencer space here in the U.S., she says. Others say too wide of a ban on branded content for specific industries does more harm than good. Ben Weiss, CEO and co-founder of bitcoin ATM operator CoinFlip, says that policies like TikTok’s eliminate the possibility for credible sources to provide reliable educational resources around topics like cryptocurrency—something he says would be appealing on TikTok’s platform with its short video format. “We’re very in favor of limiting misinformation but instead of a blanket ban, companies like TikTok should innovate new policies that cut out some of the noise,” he says.

Behind TikTok's sweeping new controls on influencer marketing

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