Social media influencers who have built a following by offering nutrition advice or investment and insurance related tips to consumers, may need to revise their content or pivot to newer fields if they fail to meet revised guidelines introduced by the Advertising Standards Council of India (ASCI), said influencer marketing experts.
Last fortnight, ASCI, the self-regulatory body for advertising, amended its code for financial sector influencers or “finfluencers” and health influencers to prevent use of inaccurate and deceptive advertising content in categories such as banking, financial services and insurance (BFSI), and health and nutrition products and services. Wrong or misleading recommendations from unqualified influencers in these fields could impact consumer well-being or jeopardise their financial security, ASCI argued.
According to the updated guidelines, financial influencers can now offer investment-related advice only if they are registered with the Securities and Exchange Board of India (SEBI) and have to prominently place their name and registration number on their videos and posts. Those advising on other financial matters must have appropriate credentials such as a license from the Insurance Regulatory and Development Authority of India (IRDAI), be a qualified chartered accountant or hold company secretaryship. Similarly, influencers endorsing products that claim health benefits must have relevant qualifications such as medical degrees or certification in nursing, nutrition, dietetics, physiotherapy and psychology, among others.
Viraj Sheth, CEO and co-founder of Monk Entertainment that manages influencers and creates brand partnerships for its pool of content creators, said ASCI guidelines are important for consumer protection but they are likely to affect influencer business too. “Already, financial influencers who do not have legitimate certification are seeing a dip in brands that come to them. Brands in the financial sector are also under scrutiny. Trading platforms now have various restrictions that limit their engagements with finfluencers,” Sheth said.
He expects many uncertified finfluencers to move to creating other content to keep their followers engaged. “The most obvious pivot for them is to do infotainment content instead of hardcore finance. In the infotainment space they can work with ed-tech brands or probably other finance apps that are not trading platforms,” he said.
Some finfluencers are also pivoting to related lifestyle content such as endorsing a Forex card or an international credit or debit card, Sheth said. “Such associations do not put them on the radar,” he added. “Anyone who is not qualified to dispense financial advice as per ASCI rules, will have to pivot. But they can still attract brands if they have a captive audience and figure out what content works,” he said.
Kunal Khandelwal, group head – Outreach at digital agency Socheers, also feels that financial and health influencers can leverage their popularity to enter the lifestyle segment without much resistance. In the past the agency has matched financial influencers with entertainment brands, Khandelwal added.
Aahana Mehta, director, talent partnerships at influencer marketing agency Pollen, however, said that the revised rules are too new to fully gauge their real impact. “We are still working on our plan of action but it’s safe to say that most of the credible influencers in the financial space and health category are already certified and will not be impacted by the amendment,” she said. Rachana Ranade, whom Mehta also follows, is a CA, for instance, and has more than 3 million followers.
Those who are not qualified to offer financial or investment tips could tweak their content and use descriptive or experiential narrative, Mehta said. “Basically, they can talk about their own experience of using a product but not recommend it. It could be a subtle integration. We will need to see if ASCI will flag such content,” she said.
A fitness trainer, for instance, should stick to fitness advice and not talk about nutrition if he or she is not certified, Mehta added. It may be noted that earlier this month, the Department of Consumer Affairs also extended its influencer guidelines to mandate additional disclosures while endorsing health and wellness products and services. Influencers found to be in violation of the guidelines could face penalties under the Consumer Protection Act (2019).
Complete pivot to new content on unrelated categories may not work for health and financial influencers, Mehta said. “If a male finfluencer is addressing 25 to 40-year-olds on equity and shares, he cannot start speaking of travel packages all of a sudden. There can be a slower transition of opening up more categories, but it cannot be that he stops creating content which people followed him for,” she said. She concedes that those who lack credibility will eventually have to shut shop.
To be sure, influencer marketing continues to flourish despite tighter regulations introduced by ASCI. While its growth rate may have declined from the peak covid days, the sector is still growing at 25% a year.
But Mehta said that ASCI’s first set of guidelines that mandated declaring paid partnerships upfront on any ad-driven content, have had an impact on the reach of content creators.
“If organic content reaches, say, one million people, brand partnership content will reach 50% of that. But brands are aware of the fact and are fine with reduced reach because of the credibility of the influencer,” she said. “Also, they get the rights to the content piece and take the liberty to promote it elsewhere to reach newer audiences,” she added.
Digital media agencies agree that ASCI rules are sound and will make influencers more accountable. Deepak Kumar, managing partner, Dentsu Gaming, said with the social media boom, the access to information and information providers exploded leaving consumers wondering what was correct. “Their favourite idol is recommending brand A today and brand B the next day. Being a land of idol worshippers, we believe in what our idol says. ASCI guidelines for influencers have a significant impact on promoting transparency and accountability in influencer marketing on both influencers and brands commissioning the campaign,” he said.
Kumar added that in the case of more technical, financial, and health categories which can have a serious impact on one’s finances and health, it is important to provide consumers with more accurate information which should come from qualified personalities to reduce the risk of being misled.
Unqualified people talking on health and finance will need to change their content strategy. They can educate but they cannot make recommendations and they should not ignore the rules. “ASCI is good at monitoring content so people are unlikely to violate the guidelines. Influencers and brands have already got stinkers on content where their rules are not followed,” Khandelwal said.
Earlier this month, while releasing the revised code for financial and health and wellness influencers, Manisha Kapoor, CEO and Secretary General, ASCI, said: “As losses to consumers could be substantial and serious due to improper advice in the categories of health and finance, it is necessary that influencers in these two critical categories are qualified to provide advice and that these qualifications are stated upfront, whenever they put out such advertising posts.”
Shuchi Bansal has been a business journalist for over 30 years covering media, advertising, marketing and consumer economy.