Influencer Marketing in India: Understanding the Impact of Government Rules for Enhanced Transparency and Consumer Trust

This article has been contributed by Ms. Sahiba Dhandhania, CEO, Confluencr.

Influencer marketing has become one of the most popular advertising strategies lately and brands are reaching out to social media influencers to connect with their target audience. With that, a trend of audiences being constantly swamped with advertisements and marketing plans to influence their choices is seen evidently.

However, with the rise in influencer marketing, concerns about the authenticity of influencer marketing and the need for consumer protection have also risen.

“A whopping 79% of problematic ads were found online, highlighting the challenges in the digital advertising world. ASCI’s focused monitoring mechanisms boosted digital surveillance to combat objectionable content in the medium. 98% of overall ads processed required some form of modification,” – Manisha Kapoor, CEO and General Secretary of ASCI.

As a response to these concerns, The Advertising Standards Council of India (ASCI) has recently revised its guidelines for influencers to make sure there is better transparency and authenticity in influencer endorsements.

Disclosure Label Requirement

The ASCI’s revised guidelines have many crucial changes. One of the most important and prominent changes is:

• Introduction of a disclosure label: A disclosure label is required in all influencer advertisements. This means, that influencers must distinctly disclose when they post an advertisement on social media, using an easily visible and identifiable label on their posts.
• The disclosure label must be specified in the text-based posts or blogs and at the beginning of the advertising content in podcasts or audio posts.

These guidelines aim to ensure that consumers are conscious of times when they are being marketed and can make informed decisions about the products they purchase.

Extension to Health and Financial Influencers

The extension of the guidelines to cover health and financial influencers is another significant change made in the revised guidelines. The ASCI mandates that influencers in these areas must have relevant qualifications and disclose them prominently when endorsing related products.

For example: Influencers endorsing products related to health, nutrition, or fitness must have relevant qualifications in nutrition, physiotherapy, psychology, etc., depending on the nature of the advice provided.

Similarly, financial influencers can only provide investment-related advice after being certified by the Securities and Exchange Board of India (SEBI). This ensures that consumers receive accurate and reliable information from qualified experts.

Regulatory Hurdles on ‘Finfluencers’ in India

Finfluencers are influencers who give information and advice on a wide variety of financial topics that include stock market trading, personal finance, and mutual funds.

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Redefined Celebrities in the Digital Age

The ASCI has also expanded the definition of Celebrities in its code to include Social Media Influencers:

The code now defines celebrities as “Individual who either earns a compensation of Rs 40 lakh or has a social media following of 500,000 or more on a single social media account”. This change reflects the changing scenarios of influencer marketing and aims to fortify consumer protection.

The guidelines ensure that the celebrities share their genuine opinions about the products, backed by their research, knowledge, or experience of the product or service being advertised. Celebrities must also conduct their assessment to justify the claims made in the mentioned ads.

“This approach will prove advantageous for influencers, as brands are likely to prioritize those who comply with the guidelines. Influencers have a strong connection with their followers, and as a result, they will strive to benefit their followers' interests. This dedication will, in turn, contribute to safeguarding the welfare of their followers,” Preety Singh Co-Founder and Managing Director of Boomlet Group.

Promoting Authenticity and Consumer Trust

The ASCI’s revised guidelines emphasise the importance of authenticity and its maintenance in influencer endorsement and aim to build consumer confidence. The guidelines encourage influencers to build their voice and style when endorsing products and to avoid making any misleading claims or exaggerations. The revised guidelines also require influencers to disclose material connections they have with the brand, such as receiving free products or payment for endorsements. This ensures that consumers receive honest information about the products they purchase.

Transparency and authenticity are important to influencer marketing, and people’s support helps in the fulfillment of government rules to certify these values.

Future Regulatory Landscape

As influencer marketing continues to grow, governments will likely introduce more guidelines and rules to protect consumers and promote responsible practices. Brands and influencers must stay informed about these regulations revise their strategies and plans according to the guidelines and avoid potential legal issues.

In conclusion, ASCI’s revised influencer guidelines aim to:

1. Create more reliable advertising conditions and build consumer trust.
2. The guideline requires the influencers to use a “disclosure label” whenever they post any advertisements on social media.
3. The revised guidelines extend to health and financial influencers and mandate that they must hold relevant qualifications and disclose them prominently when endorsing products related.

Today, these revised guidelines are seen as a step in the direction of ensuring consumer protection and maintaining authenticity.

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