What is the role of an advertisement? Simply place a brand in the spotlight to be able to gain consumer attention. The advertisement is further built on a narrative where claims are made to project its unique proposition to consumers. In a race to capture consumer’s share of the wallet, brands have often got it wrong with misleading claims in their advertisements. Case in point: the recent case of FMCG firm Patanjali being pulled up by the Supreme Court for its misleading ads. Uttarakhand State Licensing Authority (SLA) suspended the manufacturing licenses of 14 Patanjali Ayurved Ltd and Divya Pharmacy products in April 2024 which includes Swasri Gold Capsules, Swasari Vati, Bronchom, Swasari Pravahi, Swasari Avaleh, Mukta Vati Extra Power, Lipidom, BP Grit, Madhugrit, and Divya Eye drops, among others. Furthermore, SC orders removal of online ads and halts sale of suspended products on account of unsubstantiated health claims. “ Misleading ads have been on the rise and brands may resort to misleading advertising for reasons which include to garner higher market share, pressure to meet sales targets, competition, and a lack of ethical guidelines. In today’s hyper-competitive market, companies may feel compelled to exaggerate product benefits or make false claims to stand out and attract customers. Additionally, there might be internal pressure from stakeholders to achieve aggressive sales goals, leading to shortcuts in marketing ethics,” Smita Khanna, COO, Newton Consulting, told BrandWagon Online.
It is here that the Advertising Standard Council of India (ASCI) claims to play a proactive role in monitoring and complaint-handling systems to identify and address a significant number of misleading advertisements. In the year 2023-24, ASCI evaluated 8299 advertisements, of which 81% were violations of Chapter I – misleading ads. 94% of these violations were a result of our proactive monitoring. Furthermore, 98% of the advertisements required modification, while 49% of the advertisements were not contested; they were promptly withdrawn or modified, it stated.
To be sure, this isn’t the first time that brands have been caught in such controversy. For instance, despite years of advertising and building a brand Nestle faced a backlash in 2015 after the Food Safety and Standards Authority of India (FSSAI) conducted tests on Maggi noodles and discovered elevated levels of lead and monosodium glutamate (MSG) beyond permissible limits. With hashtags like#BoycottMaggi trending online to consumers protesting on the streets, the brand was also banned. The product returned to stores after a court lifted the restriction. Nestlé has since then removed the claim, ‘No added MSG’. And if this is anything but a drop in the ocean, it is rather difficult to forget the infamous Johnson & Johnson controversy surrounding its baby powder. The company is expected to end global sales of baby powder containing the mineral talc in 2023, switching to a formulation based on corn starch. The company is facing over 40,000 lawsuits in the US alleging that baby powder contaminated with asbestos-caused ovarian cancer or mesothelioma. Early this month, Johnson & Johnson, said it is moving forward with a $6.48 billion proposed settlement of tens of thousands of lawsuits alleging that its baby powder and other talc products contain asbestos and cause ovarian cancer.
The case of falling brands!
Industry experts acknowledge that when a company achieves brand status, especially becoming a household name like Patanjali products, Maggi noodles, Nestle baby food, or Bournvita drink, it reflects successful efforts in winning consumer trust and loyalty. The process of building brand recognition is considered pivotal as it creates a sense of familiarity and captures consumers’ attention. Genuine brand loyalty, experts emphasise, is built on trust. In the competitive landscape, brands consistently aim to differentiate themselves from their competitors, and in order to do that, creative advertising gets launched.“The initial intent of any brand is not to mislead consumers but to establish a claim that differentiates its product in the market. However, if these claims lack substantiation with data and facts, they are now being questioned. It is crucial for brands to support their statements with honesty and factual evidence to build credibility. With numerous cases of false and misleading claims, brands cannot escape scrutiny, especially with today’s consumer, particularly the younger generation, being well-informed,” Anisha Motwani, strategic advisor, mentor and independent board director, said.
Experts suggest that Patanjali’s market share may not be significantly impacted by the recent developments, as a large portion of their consumers is from tier 2, 3, and 4 cities which does not usually get affected by news. Patanjali’s business model heavily relies on retail stores rather than e-commerce, with existing stocks readily available for sale.“ In the case of Fair & Lovely, HUL (Hindustan Unilever) decided to go away with the ‘fairness’ proposition a couple of years back. But the promise of a fair skin within six weeks attracted innumberble Indians over the years. It was only in 2023 that there was a decline in the overall fairness cream market as consumers started demanding more inclusive brands,” Khanna explained.
Industry experts believe that when brands face scrutiny for false claims, consumer trust in the entire industry can erode. Additionally, legal cases and negative publicity can tarnish the reputation of e-commerce platforms and offline retailers that carry the implicated products, potentially leading to a loss of customer confidence and loyalty. Overall, the fallout from misleading advertising and legal cases can have ripple effects throughout the industry, impacting businesses across the supply chain. “ASCI participates in several discussions and consultations and works closely with regulatory bodies frequently. It recognises that brand reputation and consumer trust are interconnected and is vigilant in monitoring controversies or breaches of the ASCI Code. In the long-term advertisers who consistently breach the rules lose consumer trust and credibility. ASCI regularly shares the list of deliberate and repeat offenders with the government so that they can investigate and enforce appropriate legal penalties,” Manisha Kapoor, CEO and secretary-general, ASCI, said.
Paint the town red!
When brands face backlash and potential boycotts from its audience, it is believed that the only viable option, other than shutting down, is to improve and rebrand by addressing the concerns. Historically, brands have taken initiatives to regain consumer trust and market share through such measures. For instance, Maggi received a major boycott in 2015 after regulators found excessive levels of lead and MSG in their noodles and it relaunched itself after a year with improved product quality and transparent communication. Additionally, when Dettol and Lifebuoy were questioned for claiming exaggerated 100% germ killing they tweaked it as 99.9% germ killing and Fair&Lovely rebranded itself as Glow&Lovely after backlash from audiences. Similarly, Bournvita and Horlicks, known for their claims of boosting mental and physical growth, came under fire for lacking scientific backing; these brands adjusted their advertising to focus on being general health drinks.
After facing public scrutiny, brands often adjust their marketing and advertising strategies as part of their efforts to rebrand and reconnect with audiences. Industry experts assert that consumers feel a sense of betrayal when they have been loyal to a brand, entrusting their choices among various products offered. “In this dynamic landscape, brands need to exercise caution in their communication, as today’s consumers are discerning and vocal. Instances of miscommunication or misleading claims have led to a loss of faith in brands in the past. Therefore, it is crucial for brands to take proactive steps to restore consumer trust if such issues arise, even if unintentional,” Anita Nayyar, a media, branding and communication expert said.
Moreover, industry experts note that today’s consumers are informed and conscientious. They read label claims and assess nutritional values on packaging. In this, influencers and bloggers play a significant role in educating consumers about packaged food, discussing both its positive and negative aspects.
Can AI be an ad detective?
Experts believe that technology can address and identify cases of wrong labels, false claims, and misleading advertisements in today’s digital age of transformation. ASCI claims to have invested in in AI and technology to enhance its monitoring capabilities and streamline case processing. In the fiscal year 2023-24, ASCI claims to have processed 8229 ads, with 99% of them requiring modification. Notably, 49% of these cases (3951) were not contested by the advertiser, leading to withdrawals or modifications of the ads. Comparatively, in 2022-23, out of 7828 ads reviewed, 97% needed modification, with 33% (2537) not being contested by the advertiser. “ ASCI is one of the few self-regulatory organisations (SRO) in the world that use AI capabilities as part of its ongoing monitoring efforts to identify misleading advertisements as well as influencer violations. 80% of the advertisements processed in the previous fiscal year were from our digital suo moto efforts. AI and machine learning are also embedded in ASCI’s complaints management system to help increase processing efficiency,” Kapoor highlighted.
Moreover, industry experts advise that detection software and AI-powered algorithms can be trained to analyse ad content and detect deceptive claims or misleading information. Natural language processing (NLP) techniques can help identify inconsistencies or exaggerations in ad copy. Image recognition technology can flag manipulated or altered visuals.
Furthermore, data analytics can be utilised to track consumer feedback and sentiment, helping to identify ads that are perceived as misleading. Collaboration between technology companies, regulatory bodies, and industry stakeholders can facilitate the development of standardised tools and protocols for identifying and reporting misleading ads. “ In a world shifting towards transparency and digital engagement, educating consumers early on label understanding and product scrutiny is pivotal. Brands embracing authenticity and accountability will thrive by serving consumers better, every day,” Alekhya Chakrabarty, VP – marketing, Unstop, concluded.