NAD Recommends Discontinuance And Modification of Certain Claims By MLW Squared, Inc. For Tri-Verified Influencer Marketing Platform

New York, NY March 25, 2019 The National Advertising Division has recommended certain advertising claims made by MLW Squared d/b/a Ahalogy regarding its Tri-Verified influencer marketing platform be modified or discontinued, but found that the advertiser’s use of a Media Rating Council (MRC) seal did not reasonably communicate a misleading message.

NAD is an investigative unit of the advertising industry’s system of self-regulation and is administered by the Council of Better Business Bureaus.

The claims at issue were challenged by Collective Bias, Inc., provider of a competing influencer marketing platform. Influencer marketing platforms connect brands with influencers to promote products and services. The challenged claims included:

Express Claims:

“Ahalogy launches First Third-Party Verified Influencer Marketing Platform”

“Ahalogy, the leading company in helping brands connect consumer passion to purchase, has announced a first-ever solution for verifying that influencer marketing impressions, traffic and other key engagement measures are valid.”

“We recently announced that our company will be using TPV solutions, like Moat, in all influencer campaigns moving forward, making Ahalogy the first influencer platform that is 100% verified.”

Implied Claims:

Ahalogy’s Tri-Verified product applies to all social media engagement.

Ahalogy uses Moat to help distinguish between real engagement/followers and fake engagement/followers.

Ahalogy’s service is based on metrics approved by the Media Ratings Council (“MRC”).

Unlike traditional influencer marketing platforms, which rely primarily on native posts and influencer follower counts, Ahalogy’s Tri-Verified influencer marketing platform uses promoted posts to disseminate influencer-created content. A key issue before NAD was whether the advertiser accurately communicates that the benefits of its influencer marketing platform are limited to the type of paid, targeted, social media advertisements that it uses in its influencer campaigns (e.g., “promoted posts” or “sponsored posts”) or conveys the misleading message that its platform can verify all social media audience data, including all impressions, traffic and engagement metrics derived from influencers’ native posts on social media.

NAD, in its decision, explained that Ahalogy purchases targeted social media advertisements (e.g., “promoted posts” or “sponsored posts”) and uses these promoted posts to feature influencer-created content. NAD noted that audience data related to promoted posts can be tracked and measured by third-party verification providers, but that audience data related to influencers’ native posts on their own social media pages cannot be similarly verified.

NAD determined that the challenged advertising reasonably communicated that Ahalogy’s Tri-Verified influencer marketing platform can verify all social media audience data, including all impressions, traffic and engagement derived from influencers’ native posts on social media. Specifically, NAD found that the advertiser’s broad and unqualified claims that the Tri-Verified platform – and its integrated third-party verification service – allows for influencer marketing campaigns to be “100% verified” and can guarantee that “impressions, traffic and other key engagement measures are valid,” reasonably suggests to consumers that its platform is able to verify 100% of all social media content, including all impressions, traffic and engagement metrics related to influencers’ native posts on social media.

NAD also found that the challenged advertising reasonably communicated that Ahalogy’s Tri-Verified influencer marketing platform detects influencer fraud on social media by distinguishing between real and fake followers. NAD stated that the advertiser’s repeated emphasis on the problem of influencer fraud, coupled with claims that its third-party verification service is a “solution” to reduce marketplace uncertainty, clean up the marketplace, eliminate fraud, and ensure that marketers get what they pay for, reasonably conveyed that the Tri-Verified platform is a fraud detection tool geared towards detecting the influencer fraud it has so carefully highlighted.

NAD further determined that Ahalogy’s use of the term “paid media” in its advertising did not adequately limit the advertiser’s strong third-party verification claims to its ability to verify impressions of promoted posts only.

It was undisputed that Ahalogy’s influencer marketing platform does not verify audience data derived from all social media content or detect influencer fraud by distinguishing between real and fake followers. As a result, NAD recommended that the advertiser discontinue claims that its product is “100% verified,” in the context in which it appears in the challenged advertising, as well as claims suggesting its Tri-Verified product is capable of detecting fraud by distinguishing between real and fake followers and verifying audience data derived from all social media content.

Alternatively, NAD recommended that the advertiser modify the challenged claims to make clear that its influencer marketing platform only uses promoted posts on social media, which enables Ahalogy to verify 100% of its audience data and circumvent the problem of influencer fraud (by not using the traditional follower count model to estimate audience data).

NAD also recommended that the advertiser discontinue claims that it offers the “first and only” third-party verification solution for influencer marketing. Nothing in NAD’s decision, however, prevents the advertiser from highlighting its approach to influencer marketing, which uses influencers in promoted posts, allowing it to verify 100% of impressions and engagement with those posts.

Finally, NAD found that the advertiser’s display of a MRC seal in the YouTube video, followed by a graphically identical seal stating “Verified by Moat,” did not convey the misleading message that all of Ahalogy’s verification capabilities are accredited by the MRC. NAD found that the nearly one minute gap between the display of the two seals makes it unlikely that consumers would notice their graphical similarity. Even if consumers noticed the similarities, NAD found that the video conveys the limited and uncontested message that the MRC certifies third-party measurement companies.

In its advertiser’s statement, Ahalogy noted that it is pleased that NAD has recognized that its influencer marketing platform – which is based entirely on promoted posts – can ensure that influencer content “reaches its intended – and real – audience” and enables Ahalogy to “verify 100% of impressions and engagement.” Ahalogy stated that it appreciated NAD’s careful consideration of this matter and that it agreed to comply with its recommendations.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.