This article is written by Chaitanya Suri who is pursuing a Diploma in Cyber Law, Fintech Regulations & Technology Contracts from LawSikho.

Introduction

Anyone with a social media account is familiar with the idea of influencer marketing. According to a marketing firm, India’s influencer market is worth $75-$150 million per year currently, compared to $1.75 billion globally. This industry has quickly transformed into a mainstream advertising market that is only supposed to expand as more Indians go online. Influencer marketing has exploded in popularity since the onslaught of COVID pandemic, with marketers changing their attention from larger-than-life advertisements to web or social media influencers to advertise goods and boost brand value.

Recently, there have been increasing calls for more accountability in the sector to help defend customers’ interests. Since 2019, the Advertising Standards Council of India (ASCI) has been developing guidelines for social media influencers who promote brands. As a result, in February 2021, they published a draft titled “Guidelines for Influencer advertising on digital media” with the aim of regulating the market and separating advertisers from editorial and independent user-generated content for a balanced advertisement environment. These rules will apply to all promotional posts that are released on or after April 15, 2021.

Purpose of regulation 

“The biggest part of the new rules is to tell consumers that you are watching an ad and not content.”

– Manisha Kapoor, Secretary-General of the ASCI

According to various researches, 40% of millennials think online makers understand them more than their real-life peers, and 70% of them value influencers’ views more than conventional celebrities. Furthermore, more than 85% of women consult social media before making transactions, and more than half of them confess to making purchasing decisions dependent on content by social media influencers. In reality, data indicates that influencers created more than 80% of the most-viewed beauty videos on YouTube, whereas beauty companies just make up 10%, implying that online advertising is becoming the perfect way for brands to affect people’s buying decisions. 

Consumers benefit massively from the regulations because they maximise accountability and clarity by ensuring that influencers actually believe in what they are promoting. They can no longer be exploited to purchase goods based on claims that were not backed up with the data. The regulation will make it easy to see whether something is being promoted with the goal of influencing people’s opinions or behaviour for immediate or long-term economic benefit, resulting in fewer customer expenditure on counterfeit goods.

Because of the renewed emphasis on credibility and authenticity considerations, the guidelines would help influencers by fostering a sense of responsibility. They will make a better impact and deliver deeper engagement being upfront about sponsored content. Much of which would result in higher revenue because today’s digital audiences are intelligent enough to distinguish between what is an advertisement and what is real, and as a result, advertisers are able to spend extra to see their advertising materials seem as natural as possible. Furthermore, since influencers will be required to do due diligence, there will be a significant reduction in influencers being taken off guard by their claims. The guidelines also address the problem of inconsistency by combining regulations from various brands within a common umbrella.

Some important definitions in the guidelines

Advertisement	A product or brand is said to be advertised when its communication to the general public or a section of it is paid-for with an intention of influencing the opinions and/or behaviour of those to whom it is addressed. Even if a communication is not recognized as an advertisement by the general public but is owned or authorised by the advertiser or brand owner, it would be included under the meaning of advertisement and the guidelines would be applicable. The term ‘owned or authorised’ implies that there should be a material connection with the person publishing such advertisement.
Material Connection / Payment	“Any connection between an entity providing a product or service and an endorser, reviewer, influencer or person making a representation or publishing the communication that may affect the weight or credibility of the representation, and that could include benefits and incentives, such as monetary or other compensation, free products with or without any conditions attached, discounts, gifts, contest and sweepstakes entries, and any employment relationship.”
Digital Media	“Digital media includes but not limited to: internet (advergames, sponsored posts, branded content, promotional blogs, paid-for links, gamification, in-game advertising, teasers, viral advertising, augmented reality, native advertising, connected devices, influencers, etc). On-demand across platforms including Near Video On Demand, Subscription Video on Demand, Near Movie on Demand, Free Video. On-Demand, Transactional Video on Demand, Advertising video on demand, Video nn Demand, Pay Per View etc.  Mobile broadcast, mobile, communications content, websites, blogs, apps, etc. Digital TV (including Digital Video broadcasting Handheld and terrestrial etc).  NSTV (Non-Standard Television). DDHE (Digital Delivery Home Entertainment). DTT (Digital Terrestrial Television).
Media owners	Any organizations or individuals having effective control of the management of media or their agents are classified as ‘media owners’.   The term ‘Media’ covers platforms and tools used for the propagation of advertisements and include press, cinema, radio, television, hoardings, hard bills, direct mail, posters, internet, digital etc.
Influencer	An Influencer is someone who has 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 authority, knowledge, position, or relationship with their audience. The guidelines also apply when an influencer intervenes or contributes in any editorial context or collaborates with a brand to publish content.

Guidelines on using disclosure labels 

The regulations mandate ‘disclosure labels’ for visible media as well as non-visible media (e.g. podcast) whenever any communication is done for the purpose of advertisement. ASCI has gone to the length of defining the contents of such disclosure label, mandating only the use of the following words:

1. #ad, 
2. #collab, 
3. #promo, 
4. #sponsored or 
5. #partnership. 

Since ASCI believes that users may be unfamiliar with short forms or other terms to connote ads, this list, which will be revised on a regular basis, is defined.

The placement of disclosure label:

1. Needs to be upfront. The label should be within the first two lines on any given platform so that a customer does not have to scroll further. This also means that any disclosures made in the profile/bio/about section would be deemed insufficient so site visitors may read individual reviews or watch individual videos without seeing the disclosure on another page;

2. Should be displayed prominently and be appropriate for the channel. Should consider what can be seen and when so that people do not overlook. If the advertisement is just a photo post, such as on Instagram stories or Snapchat, the label must be superimposed over the image, and it must be visible to the average viewer.
   
   The drafted guidelines also recommend a method or required time frame for disclosure label demonstration based on the medium, such as textual posts, video length, live-streams, audio posts, or vanishing clips. The disclosure label should be superimposed on the video in a way that is clearly noticeable to the audience if the video is not followed by a text message.
   
   The transparency mark must be visible for at least 2 seconds in videos that are less than 15 seconds long. The disclosure label should appear for a minimum of 1/3rd   duration of the video if it is longer than 15 seconds but shorter than 2 minutes. The disclosure label must appear for the entire length of the post where in the advertised brand or its features, advantages, or other benefits are listed in videos that are 2 minutes or longer.
   
   The disclosure mark should be displayed regularly in live streams, for 5 seconds at the end of every minute, so that people who only see a portion of the stream could see it.

LENGTH OF VIDEO	DISPLAY TIME FOR DISCLOSURE LABEL
LESS THAN 15 SECONDS	AT LEAST FOR 2 SECONDS.
15 SECS TO 2 MINS	1/3RD OF THE TOTAL DURATION.
2 MINUTES OR LONGER	THE ENTIRE DURATION OF THE SECTION IN WHICH THE PROMOTED BRAND OR ITS FEATURES, BENEFITS ETC ARE MENTIONED.
LIVE STREAMS	PLACED PERIODICALLY, FOR 5 SECONDS AT A MINUTE’S INTERVAL.

When using audio files, the disclosure label must be explicitly stated at the beginning and end of the recording;

1. Suitable for all potential devices. It must be visible regardless of the device or platform (website, app, etc.) used.
   
2. Language of the mark may be written in English, it can be translated into some other language that the targeted consumer audience understands.
   
3. Furthermore, the guidelines note that filters cannot be used on social media ads if they exaggerate the impact of the brand’s claim, such as “makes hair shinier” or “makes teeth whiter.” And it is the influencer’s responsibility to investigate (due diligence) any technological or efficiency statements made by advertisers, such as “2X better” or “fastest speed.”

It is advised that the arrangement between the advertiser and the influencer include provisions on transparency, filtering, and due diligence.

Source: Slide 18 of INFLUENCER ADVERTISING ON DIGITAL MEDIA GUIDELINES published by ASCI.

Examples of placement of disclosure label

To provide examples on placement, ASCI has provided “Ready reckoner” for specific prominent media channels and platforms with the guidelines. 

MEDIA CHANNEL/ PLATFORM	PLACEMENT OF DISCLOSURE LABEL
INSTAGRAM	To be included in the text that shows. If only the image/video is seen, the image/video itself must include the label eg – reels, Insta stories.
FACEBOOK	Included in the title of the entry or post. If only the image/video is seen, the image/video itself must include the label eg FB story.
TWITTER	To be included at the beginning of the body of the message as a tag.
PINTEREST	To be included at the beginning of the message.
YOUTUBE & OTHER VIDEO PLATFORMS	To be mentioned in the title/description of the post.
VLOG	Should overlay while talking about the product or service.
SNAPCHAT	To be included in the body of the message in the beginning as tag.
BLOG	To be mentioned in the title of the post.

Liability and complaint handling

The influencer or publishing account on which the advertising is written, as well as the advertiser under whose brand the advertisement is, bear the burden of disclosing the message as an advertisement. If an advertiser utilizes a simulated influencer, the advertiser is entirely responsible for the disclosure. In the event of a public complaint or suo moto cognizance of an allegedly offensive commercial, ASCI will send a warning to both the brand owner and the influencer for breach of any rule. A snapshot with a timestamp will suffice as prima-facie evidence of the advertisement being published in the case of disappearing posts.

The Central Authority can levy a liability on the endorser of the false or misleading advertising under the “Consumer Protection Act, 2019” that may range between ten lakh rupees to fifty lakh rupees for each subsequent contravention. The Central Authority can also bar the endorser of a deceptive or misleading commercial from endorsing any good or service for a term of up to one year for the first offence and up to three years for successive offences.

International Scenario

JURISDICTION	LEGALLY REQUIRED TO IDENTIFY ADVERTISEMENT	MARKING OF LABELS	RELEVANT ORGANISATION	RELEVANT MATERIAL
US	YES	“Ad”, “Advert”, “Paid partnership”	Federal Trade Commision (FTC)	Text on “Use of Endorsements and Testimonials in Advertising” and brochure on  “Disclosures 101 for Social Media Influencers”
UK	YES	“Ad”, “Advert”, “Paid partnership”	The Advertising Standards Authority (ASA) The Competition and Markets Authority (CMA)
FRANCE	YES	publicité” (advertising), “sponsorisé par” (sponsored by), “en partenariat avec” (in partnership with).	Observatory of French Advertising Self-Regulatory Organization (ARPP)
AUSTRALIA	YES –	“#Ad”, “Advertisement”, “Paid partnership”, “Sponsored”,	The Australian Competition and Consumer Commission (“ACCC”) The Australian Association of National Advertisers (“AANA”)	Ad Standards guidelines for influencers and AANA Clearly Distinguishable Advertising Industry Practice Note
CANADA	YES	“#ad”, “#sponsored”, “#XYZ_Ambassador”, “#XYZ_Partner” (where “XYZ” is the brand name)	Competition Bureau Canada
UAE	Social media influencers and firms have to get permission by obtaining an e-media license and a trade licence	None specific	National Media Council (NMC)   Ministry of Health and Prevention (MoHAP
RUSSIA	YES. Since no mandatory wording or positioning requirements, the requirement depends on case to case basis. Usually an appropriate disclaimer is sufficient.	#направахрекламы Using only English phrases may not be sufficient	Federal Anti-monopoly Service (FAS)
SPAIN	YES	“#ad” or “#publicidad”	Advertising Code of Conduct published by AUTOCONTROL and The Spanish Advertisers Association (AEA) The National Competition Commission Authority (CNMC)
GERMANY	YES	“Werbung” or #werbung	Chambers of Commerce and Industry. Chambers of Crafts.
ITALY	YES	“Pubblicità” (advertisement)  or  “Promosso da…brand”	Italian Advertising SRI Jury (and Supervisory Committee). Italian Antitrust Authority.  Advertising Self-Regulatory Institute (IAP in Italian).
JAPAN	no official regulatory watchdog like the FTC or ASA. However, there are organisations who have put guidelines in place. These organisations don’t have any legally binding power, but almost all advertisers follow their rules as public backlash can be severe.	“#PR”	Consumer Affairs Agency Japan Advertising Review Organization JARO
CHINA	celebrities and influencers, should have tried the product themselves  and have documentation to prove it	“广告” or “Guǎnggào”	State and local Market Regulation Departments State and local Radio and Television Administration Authorities (for the internet audiovisual programs) State and local Cyberspace Administration Authorities

The Road ahead

Although the recommendations are comprehensive, they do not take into account emerging social media channels and only focus on well-known platforms.

The rules for influencers ads on new platforms will be open for input from all stakeholders, including industry, digital influencers, and customers, until March 8, 2021, according to ASCI. ASCI will release final recommendations by March 31, 2021, based on the suggestions and inputs. This policy would apply to all advertising posts that are released on or after April 15, 2021.

Although the ASCI drafted guidelines are something of a must-do list for influencers working with brands, there is also a need to raise awareness about false influencers, who manipulate core performance metrics like the number of followers on social media sites and tend to artificially increase these measurements for the general public for a commission. Last year, the Mumbai police raided a bogus influencer scam involving Bollywood celebrities, bringing the dark side of social media ads into the spotlight.

It’s a fantastic place to start, but it’ll almost certainly evolve over time. Digital content producers have their own style of content; some fly, others learn a talent, and even others entertain; advertisers are often interested with small segments of content rather than the whole piece. For the public, it may be perplexing or deceptive. For example, if an athlete is wearing clothes of a particular brand during their regular training sessions, and such brand has not entered into any collaboration by the athlete for any promotion.  In the case of disclosure labels, the format, font, spacing, and standardisation across channels are all important considerations. 

Are the growing wave of young social media superstars who self-publish content on sites like YouTube and Instagram, where their millions of followers produce valuable ad sales, brand deals, and paying product promotions, in a position to understand the guidelines and their implication. If no, then who will be held accountable if they do not follow the guidelines.

Suggestions

Firstly, considering the important role of various agencies in the outcome of advertisement, these agencies should also be held accountable along with other stakeholders (influencers and advertisers) in case of any non-compliance with the guidelines. Generally, there are three parties who contribute to an influencer marketing post: the influencer, the company and the marketing agencies that connect and oversee the agreements and transactions thereby acting as a broker. So, when regulations are not met, shouldn’t all three stakeholders be responsible?

Second, there is no mention of influencers who are children. I believe holding children on the same pedestal as adults in such a scenario might be unfair because most often than not the promotions are not managed by children themselves but outsourced to agencies or other third parties. A framework may be provided clarifying the liability of children and those handling their accounts in case of any non-compliance.      

Thirdly, the inclusion of a redressal mechanism could provide a fair chance for the influencers to plead their defence before taking the matter to the consumer courts. A board could be constituted for such redressal. 

Finally, the fourth suggestion would be, defining the extent of liability in case of violation of guidelines. This will further help with the transparency as influencers would further be deterred from indulging in advertisement without a disclosure label and ensuring stricter implementation. 

Conclusion 

These guidelines are an incredibly important step in reaffirming absolute accountability in the field of influencer marketing, thus streamlining the space and ensuring that the influencer ecosystem has a greater sense of social responsibility. With the launch of these guidelines, the influencer marketing segment enters the ranks of the advertising ecosystem’s most well-known and admired realms, indicating the space’s continued development and evolution. The rules prohibit brands from getting away with doing anything that would be deemed unethical if they were seen in a TV commercial or on billboards.

At this point, the ASCI’s decision to control influencer ads would aid ordinary consumers in making choices so they would have a greater understanding of whether or not their favourite influencers’ views on those pieces of content are influenced by commercial interests.

Three important points have been ensured by the guidelines:

• Any material in which a company has paid an influencer and has fair power of the content should be labelled as an “advertisement.”
• The influencer must make it clear that the content is a “commercial.” This should give the reader a strong hint that the content is biased.
• If the influencer makes any specific claims, the advertiser or brand owner should be able to diligently substantiate those claims.

References

1. https://images.assettype.com/afaqs/2021-02/0b608628-7f01-433e-98e5-185916c4b12e/ASCI_Guidelines.pdf
2. https://yourstory.com/weekender/asci-guideline-influencer-advertising-social-media-influencer?utm_pageloadtype=scroll
3. https://www.thehindubusinessline.com/news/guidelines-for-influencer-advertising-on-digital-platforms-to-be-out-by-next-month/article33896086.ece
4. https://qz.com/india/1976094/india-proposes-rules-for-facebook-twitter-instagram-influencers/
5. https://www.businessinsider.in/advertising/ad-agencies/news/heres-what-experts-think-about-ascis-new-draft-guidelines-for-influencer-advertising/articleshow/81152205.cms
6. https://inc42.com/buzz/indias-social-media-influencers-get-new-guidelines-for-advertising/#:~:text=protect%20consumers’%20interest.-,The%20draft%20guidelines%20require%20influencer%20advertising%20posts%20to%20include%20a,the%20disclosure%20should%20be%20superimposed
7. https://theswaddle.com/indian-advertising-council-drafts-rules-for-influencer-marketing-on-social-media/

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