A new set of guidelines for social media influencers released on Monday by the department of consumer affairs will likely shake up the Rs 1,275-crore online endorsements market in India.
Titled ‘Endorsements Know-hows!’ for celebrities, influencers, and virtual influencers on social media platforms, the guidelines are aimed to ensure that such individuals comply with the Consumer Protection Act and any associated rules or guidelines, and do not mislead their audiences when endorsing products or services.
The guidelines state that endorsements must be made in simple, clear language, and terms such as ‘advertisement’, ‘sponsored’, ‘collaboration’ or ‘paid promotion’ should be used for transparency. Individuals must not endorse any product or service that they have not personally used or experienced, or for which they have not done due diligence. The guidelines urge celebrities and influencers to always review and satisfy themselves that the advertiser is in a position to substantiate the claims made.
Noting that there is confusion regarding the kind of disclosure words to be use for different kinds of partnerships, the guidelines specify that for paid or barter brand endorsement, terms such as ‘advertisement’, ‘ad’, ‘sponsored’, ‘collaboration’, or ‘partnership’ can be used. Importantly, the term must be indicated as a hashtag or headline text.
The guidelines also spell out that individuals or groups who have access to an audience and the power to affect their audience’s purchasing decisions or opinions about a product, service, brand, or experience because of the influencer’s/celebrity’s authority, knowledge, position, or relationship with the audience, must make certain disclosures.
These disclosures must be placed in the endorsement message in a manner that is clear, prominent, and extremely hard to miss. Disclosures should not be mixed with a group of hashtags or links. For endorsements in a picture, disclosures should be superimposed over the image in a manner that they are hard to miss. For endorsements in a video or a livestream, disclosures should be made in both audio and video format and displayed continuously and prominently during the entire stream.
Industry experts believe the number of brand-influencer deals is bound to fall in the short term, but assert that influencers cannot abandon their responsibilities.
Manisha Kapoor, CEO and secretary general, ASCI, told FE, “Influencer violations comprise almost 30% of ads taken up by ASCI, hence legal backing for disclosure requirements is a welcome step.”
According to Rajat Ojha, founder and CEO, Gamitronics, that there was little accountability or checks and balances in what was becoming a “content creator’s economy all the way”. “Brands have joined the bandwagon cutting from other avenues of advertising, but what is the RoI? Most of these influencers are individuals, they don’t have huge overheads so what are they charging the marketers for? Some give guarantee for views and we all know how that is achieved, Ojha said.
By some estimates, nearly two-thirds of Indians follow an influencer. Rohit Agarwal, founder and director, Alpha Zegus, a marketing agency that handles over 70 influencers, said that at present, most influencer ads come across as ‘personal recommendations’ without any indication of a monetary advantage to the influencer behind it. “This is unfair to the audience,” Agarwal said.
In a communication in January, the consumer affairs ministry had announced that any misleading advertising will attract a fine of up to Rs 50 lakh or a suspension from online platforms for as long as two years.
Arpan Soni, founding member and VP creators management, IPLIX Media, a talent management and influencer marketing agency, has a slightly different take. “This will not impact the scope or scale of influencer marketing. Brands and influencers have adapted to disclosure and the audience has also received it well. Attaching a penalty of up to Rs 50 lakh is, I feel, too harsh because influencer marketing is still relatively new, brands and influencers are still learning. There are still tier 2, 3 cities where there’s less awareness and the intent should be to educate initially.”