After releasing exhaustive guidelines for social media influencers in January 2023, the Consumer Affairs Ministry has issued a more simplified set of guidelines for celebrities, influencers, and virtual influencers on social media platforms to ensure that individuals do not mislead their audiences when endorsing products or services.
“The department has observed that there is confusion regarding which disclosure word to use for what kind of partnership,” the ministry said.
The influencer marketing industry’s value is estimated to grow at a compound annual growth rate of 25 percent over the next five years to reach Rs 2,200 crore by 2025 from Rs 900 crore in 2021, states a report from Influencer.in, an influencer marketing platform.
Use simple language
Titled “Endorsements Know-hows!”, the new guidelines state that endorsements must be made in simple, clear language, and terms such as “advertisement,” “sponsored,” “collaboration,” or “paid promotion” can be used. Individuals must not endorse any product or service that they have not personally used or experienced, or in which due diligence has not been done by them.
Therefore, for paid or barter brand endorsement, any of the following disclosures may be used: “advertisement,” “ad,” “sponsored,” “collaboration,” or “partnership.” However, the term must be indicated as a hashtag or headline text.
Highlight disclosures
The guidelines specify that individuals or groups who have access to an audience and the power to affect their audiences’ purchasing decisions or opinions about a product, service, brand, or experience, because of the influencer’s or a celebrity’s authority, knowledge, position, or relationship with their audience, must disclose. The guidelines state that the disclosure 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 enough for viewers to notice. For endorsements in a video or a live stream, disclosures should be made in both audio and video format and displayed continuously and prominently during the entire stream.
Review claims
“The guidelines advise celebrities and influencers to always review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement. It is also recommended that the product and service must have been actually used or experienced by the endorser,” the ministry added.
In a communication in January, the consumer affairs ministry had announced that any misleading advertising would attract a fine of up to Rs 50 lakh or a suspension from online platforms for as long as two years.
In a communication in January, the consumer affairs ministry had announced that any misleading advertising would attract a fine of up to Rs 50 lakh or a suspension from online platforms for as long as two years. Unlike India, where influencer marketing is still growing, in mature markets such as the United States, their industry body, the Federal Trade Commission (FTC), has laid down clear guidelines for influencers to adhere to. From putting clear disclosures to backing up claims with data, the body puts onus on influencers to own up to what they promote.
India is taking baby steps towards the same.
Industry speaks
Prashant Puri, co-founder and chief executive officer, AdLift believes that the new guidelines are more clear and simple to understand.
“I believe the guidelines set by ad regulator ASCI were slightly more ambiguous, but these guidelines are a lot more clear. For instance, the new guidelines clearly state that disclosures cannot be hidden in hashtags but need to be more included in the creative of the ad itself. I think what we will see is that there’s probably a call-out that might happen at the beginning of a video or at the end, clearly saying it’s an ad. It could be a text under the video, like an inlay watermark, which I think is good,” he notes.
Disclosures should not be mixed with a group of hashtags or links. For endorsements in a picture, disclosures should be superimposed over the image enough for viewers to notice. For endorsements in a video or a live stream, disclosures should be made in both audio and video format and displayed continuously and prominently during the entire stream.
Puri also highlighted that there needs to be penalties in place, and it needs to be followed through by the government or a governing body.
“Going back to the FTC regulation that came out about five seven years ago on influencer marketing. They actually went after some very heavyweight celebrities and fined them and then everyone else pretty much fell into place. So if those penalties are not put into place, then no one will follow the rules,” he adds.
Jag Chima, co-founder, IPLIX Media, an influencer marketing and talent management agency that handles 70 odd influencers, believes that while these guidelines may make it more challenging for brands to advertise freely, they are designed to protect consumers.
“These guidelines will ensure that consumers are aware of any potential bias or conflicts of interest when viewing endorsements or sponsored content. The guidelines aim to promote transparency and honesty in advertising, which could ultimately help to build trust between consumers, creators, and brands,” he says.
Chima further notes that overall, the impact of the “Endorsements know-how” guidelines on the creator economy and brands will depend on how well they are implemented and enforced.
“Adhering to these guidelines may require additional effort and resources from brands and creators, but they could also help to improve the credibility of the influencer marketing industry and foster more authentic relationships between creators and their audiences. We would be incorporating the new guidelines in our day-to-day operations to make the process of sponsorship more seamless for both sides of the table,” he shares.