Influencer Marketing by Brand Ripplr: The Latest Updates on Influencer Legislations and their Impact on Businesses

The influencer marketing industry continues to be on the rise, with social media platforms giving all types of creators the opportunity to stand out and share their content, and with creators now encouraged to be more transparent than ever.

Indeed, several markets are requiring influencers to obtain a license in order to do paid collaborations with brands across social media. The requirements, fees, and duration of the license vary across different markets and usually tend to drive the influencer fees higher. 

In the UAE

Influencers are required to obtain an NMC license at a cost of AED15,000 and must also pay a 5% VAT charge on their fees if they are registered for VAT. While the licensing requirements are intended to promote transparency and ethical conduct in the industry, they can be expensive and limit the ability of smaller influencers to compete with larger ones.

In KSA

Both Saudi nationals and non-Saudi individuals engaging in paid collaborations with brands on social media platforms are required to obtain a media license to promote transparency and ethical conduct in the influencer marketing industry. Saudi individuals can apply through the General Commission for Audiovisual Media website and pay a SAR15,000 (AED14,670) fee for a period of three years. Non-Saudi individuals must apply for an investment license, followed by a trade license and media license, and finally "Mawthooq," which is the new KSA license.

The cost of the license is high, hindering licensed nano and micro-influencers who may not have the necessary financial resources. Talents registered for VAT in Saudi Arabia are subject to a 15% VAT charge, further increasing their fees.

What collaborations are included within these regulations?

The regulations are applicable to any type of content that aims to directly or indirectly promote a brand or service for something in return (i.e. cash, gift, invitation, etc.). This includes any of the below:

• Paid collaborations
• Seeding campaigns
• Barter deal collaborations
• Event coverage
• Commission-based modules

Who is required to obtain a licence?

Individuals aged 18 and above who are promoting any type of brand, product, or service on any public social account.

• All Saudi nationals who are living in Saudi Arabia or residing outside Saudi Arabia;
• All non-Saudi individuals who are:
  • living in Saudi Arabia;
  • residing outside Saudi Arabia but promoting an event, service, or brand available in KSA;
  • residing outside Saudi Arabia but visiting the Kingdom for a limited time to support an activation or attend an event;
• Talents who are under agencies must obtain individual licenses as the agency license is not valid for this.

Can content creators publish while their license status is 'under progress'?

• If the talent applied for the license prior to October 1, 2022, they can resume publishing only if the status on the platform is 'under progress,' while ensuring the hashtag #ad is added on the posts. However, we noticed that talents are still hesitant to publish regardless of this exception, so we recommend brands discuss this with the talents on a case-by-case basis. 
• If the talent applied for the license after October 1, 2022, they must wait until the license is officially obtained and cannot resume publishing in the interim.

If the talent is organically posting about a brand but is not getting anything in return, is this applicable to them?

The content piece will be assessed by the relevant authorities and may be exempted; however, it is safer that all talents obtain the licenses to avoid fines.

In Oman

Oman has recently introduced a new regulation that requires influencers to obtain a license for paid collaborations with brands on social media. The license is valid for three years and failure to comply will result in a fine or suspension of the influencer's license.

What does this mean for brands and how does it impact their businesses?

We recommend brands take the below measures when developing their influencer marketing campaigns:

• Always stay up-to-date with the latest news, especially since these regulations might change or be tweaked, given that some of these regulations are in a transition period. Check to see if the influencers have the proper licensing to promote your brand or business before proceeding with any collaboration to avoid getting fined 
• Ensure that the talents are transparent in their collaborations and are using the right hashtags such as #ad and #paidad for all paid advertising material in order to explicitly promote transparency and avoid any potential fines.
• Due to the high capacity of applications, there is no clear timeline of how long it takes influencers to obtain their licenses, which is why we recommend that brands maintain flexibility with their collaborations and set an early timeline for their marketing strategies to avoid delays in their publishing schedules.
• Brands should expect to see an increase in influencers' payments and rate cards due to the increased cost they incur to obtain their license.

Finally, it is worth noting that abiding by the latest influencer legislation is critical to protect both brands and creators.