Promoting Brands On Social Media? The Ad Regulator Is Watching

New Delhi, 8 Oct 2019:

Across Facebook, YouTube and Instagram, hundreds of social media influencers hawk food, clothes and phones, unbeknownst to their followers that the posts are paid for. They are the toast of brands that are chasing that touch of authenticity missing in celebrity endorsements. And now, the advertising regulator has taken note.

The Advertising Standards Council of India (ASCI) is working on disclosure norms for social media influencers promoting products on the internet and is likely to release them in the third quarter of this year, a top official said.

The council plans to frame these guidelines on the basis of international best practices, so that users can make informed decisions on their purchases.

“With a significant increase in digital advertising, it has become crucial for ASCI to come up with strong processes for the digital medium, including the guidelines for social media influencers," said Rohit Gupta, president of Sony Pictures Networks who was recently elected chairman of ASCI.

“On social media platforms such as Instagram, Twitter or Facebook, people are promoting brands and products which also come under ASCI’s purview. Influencers are becoming big (and) we need to look at redressal systems and guidelines that will protect consumers and guide brands to use them wisely," Gupta said in an interview.

A social media influencer, having established their credibility in a specific area, wields the ability to influence potential purchase decisions by recommending items through their posts. The category includes both celebrities and independent content creators. They are often paid based on their follower count and user engagement. With young consumers increasingly becoming immune to traditional advertising, influencer marketing driven by personal recommendations has caught on, especially in categories such as beauty, fashion, travel and food.

Although ASCI does not have penal powers, its decisions are binding on both members and non-members, according to a Delhi high court ruling. The Consumer Protection Act, which seeks to penalize misleading ads placed on virtually any medium, has also recognized ASCI’s status as a self-regulatory industry body.

According to digital marketing agency AdLift, India’s influencer market is estimated at $75-150 million a year, as compared to the global market of $1.75 billion. From an online marketing perspective, this is a sizeable amount, and the number is expected to go up as more Indians go online with cheap data and affordable smartphones.

“Definitely, these guidelines are the need of the hour to protect consumers, brands and advertising ecosystem at large. Today, there is a ton of influencer marketing happening, where nobody is calling it as an ad," said Prashant Puri, co-founder and chief executive of AdLift.

Among the top influencers in India are Prajakta Koli (alias MostlySane), Sejal Kumar, Nikhil Sharma (Mumbiker Nikhil), Masoom Minawala Mehta and Bhuvam Bam. With millions of followers across platforms, these influencers promote products from brands such as Vivo, Jack & Jones India, Olay, Beardo, Emirates airlines, Spotify, Mivi and Nike.

Different platforms have different ways of engaging with influencers. In 2017, Instagram, one of the top influencer marketing platforms, launched a paid partnership tag, which allowed influencers to clearly state if a post is being created in partnership with a brand. This could be seen only to the followers of the influencer in question. The platform later took it a notch higher to launch Branded Content Ads, allowing companies to promote these sponsored posts like any other ad.

YouTube has also launched an “includes a paid promotion" tag, which appears in the first few seconds of a video. Facebook, too, has introduced a paid partnership tag.

“Although Instagram has launched a paid promotion tag, few celebrities are using it. Once the guidelines are in place, brands and agencies can come up with influencer marketing ad campaigns where the consumer knows it’s an ad but it is so engaging and entertaining that it becomes viral," Puri of AdLift said.

YouTube content creator Scherezade Shroff, who has been creating online videos for seven years, in a recent video titled Influencer Scam revealed the murky details of influencer marketing, including people buying fake followers and not disclosing paid partnerships. According to her, there’s a fine line between organic and paid content.

“We do need guidelines as it will bring more transparency and help protect consumer interest as they trust what bloggers/vloggers recommend. The guidelines should include rightful disclosure of paid partnership, different types of promotions/collaborations and what products can be advertised through influencers. Unlike TV, where there’s a regulation for alcohol brands, there’s no restriction on digital platforms. Creators also need to exercise caution and have accountability while promoting products as we don’t know who exactly is consuming the content," she said. Livemint