What it means
If you paid somebody to post about you, gave them free product, or otherwise controlled the message, the resulting post is advertising and has to be identifiable as such before anyone engages with it. In practice that means a clear label such as Ad at the start, not a hashtag buried at the end of a paragraph.
Why it matters to a small business
It cuts both ways for a small business. When you send free product to a local creator, the responsibility to get the labelling right is shared with you, not parked entirely on them. It also applies to your own team and your own friends: a review posted by a member of staff who does not say so is the kind of thing that draws a complaint.
The bit people get wrong
Gifted is not a substitute for a clear label, and neither is a platform's own paid partnership tag on its own if the post is not otherwise obviously an ad. The test is whether an ordinary person would know it was advertising before they read it, not whether the information is technically present somewhere.
Source: ASA guidance for influencers and brands. This page is a plain-English summary written by the Marketeer team, not legal advice. Where money or the law is involved, read the source.