Influencer marketing: Will govt guidelines undermine ASCI’s authority?

Two months after tightening its grip on misleading and surrogate ads and celebs who endorse them, the Union government has now announced that it would soon release guidelines for social media influencers as well. 

The proposed guidelines would make it mandatory for the social media influencers to declare their paid association with the brands they endorse. Actors, sportspersons and other celebrities, who have large followers on social media platforms like Instagram, are often accused of not disclosing their association with the brand while sharing a favourable post about them and thus misguiding their followers. 

The exponential rise of the industry during the pandemic and alleged unethical attempts by some leading influencers and brands has caught the government's attention, ad experts say. 

Incidentally, the advertising standards council of India (ASCI), a self-regulatory body of the advertising sector, already has in place two sets of guidelines to curb misleading and surrogate ads and nail erring influencers respectively. 

The development has ringed alarm bells among the stakeholders in the ad sector, especially the brands, influencers and their marketing agencies. 

A senior ad executive wonders, “The government’s intention seems to be right but the question is why would you need two different sets of guidelines from two authorities to control one sector. Moreover, the government guidelines will always overrule the guidelines stipulated by any other self-regulatory authority such as the ASCI.”

Some experts also feel that two different guidelines for influencers might create confusion and possibly give a long rope to offenders, just like the one on surrogate and misleading ads (read e4m story published in the first week of September https://www.exchange4media.com/advertising-news/does-centres-advisory-give-long-rope-to-surrogate-ads-122237.htm).

ASCI and govt can work in tandem: Piyush Pandey

Piyush Pandey, Chief Creative Officer Worldwide and Executive Chairman India of Ogilvy, feels that the two bodies can work in tandem to curb wrongdoings in the ad sector. 

“I agree with Rohit Kumar Singh’s (IAS, Consumer Affairs Ministry) views that the ASCI is not in the position to take punitive action against people who circumvent rules as the council doesn't have that mandate and authority.”

Pandey added, “The guidelines are being framed in the right spirit which may lead to a balanced way of communication. I don’t think that ASCI would be redundant with the entry of the government guidelines. There are smart people on both sides.”

Regulation and self-regulation coexist: ASCI

Denying the suggestions that the series of government guidelines for the ad sector would undermine the authority of ASCI, Manisha Kapoor, the CEO and Director General of ASCI, insists that all over the world regulation and self- regulation coexist. 

“World over, regulation and self-regulation coexist and together provide comprehensive protection to consumers. Governments and self-regulators work together and in complementary ways. The DoCA has been in touch with ASCI regarding this. The complementary work of the government and ASCI only strengthens consumer protection. In fact, when guidelines are aligned, as we have seen even in the advertising guidelines released by the government on June 9, it only reinforces ASCI's approach,” said Kapoor. 

She added that the ASCI would continue to work closely with the government on various issues impacting consumer protection.

Good for consumers: Influencers 

Nidhi Mohan Kamal, a food scientist & fitness trainer who is also an influencer, said, “The idea of social media marketing began with the idea of hearing the thoughts from a familiar perspective of a common person and with the growth of this industry, the influencers have attained a power that celebrities commanded a decade ago. This does come with its share of responsibility and hence, regulations and laws should be in place to protect the larger interests of the audience."

Another influencer Neha Mathur said, “One of the things I always try to do as a content creator is to be as authentic and transparent as possible with my followers. Nurturing that relationship involves making it clear when I do paid posts or collaborations. Hence, this new step by the government is a welcome change for creators as it will ensure that the practices we follow are standardized across the industry.”

What about micro-influencers?

Ambika Sharma, Founder & MD, Pulp Strategy, feels that the proposed clauses seeking honesty of statements and due diligence, and conditions laid for expert endorsements will put unnecessary litigation burden on influencers. Especially micro influencers may become over cautious as they don't have resources for a potential litigation, she said. 

“The rules now only place unnecessary roadblocks and scepticism in the minds of endorsers. A simple and mandatory disclosure specifying the paid content and their personal experience on its usage could solve the problem. The guidelines may scare smaller influencers and in turn deter the growth of the digital advertising industry for a while, but may benefit in the long term. In the long run, this will lead to more responsible behaviour in the digital marketing ecosystem,” Sharma added. 

Fast growing industry 

While the phrase ‘influencer marketing’ was unheard of a decade ago, it has since become one of the fastest-growing industries in India and across the world. The ROI from influencer marketing is considered to be better or on par with other marketing channels. 

Currently, the global influencer marketing industry is pegged at $16.4 billion, as per the State of Influencer Marketing Benchmark Report 2022. Influencer marketing- focused platforms raised more than $800 million in funding in 2021 alone, an indication of the significant growth of the industry, the report added. 

The Indian influencer marketing industry is also keeping pace. Valued at Rs 900 crore at present, it is expected to grow at a CAGR of 25 per cent to reach Rs 2,200 crore by 2025, according to the report. 

The shift from relying on celebrity endorsements to employing influencers has been massive. The head of a media agency says, “In 2021, celebrities held only 27 per cent of the market share of marketing campaigns, while influencers had the bigger piece of the pie at 73 per cent. The growth of influencers is across sectors such as food & beverage, personal care, fashion and technology, BFSI and fintech.”

“Influence ecosystem to get recognition”

Hailing the move, Payal Sakhuja, Co-founder and CEO of influencer marketing agency, Ripple Links, says that the move would lend recognition to the influencer marketing ecosystem. 

“Influencer marketing has become an essential tool in brands' marketing mix. Brands across verticals and industries are building strong long-term influencer programs and campaigns. It is heartening to note that the Government of India is coming up with a guideline on the same. This lends recognition and respect to the influencer marketing ecosystem and will also make the workings of the industry transparent, benefitting all stakeholders in the entire value chain.”

Sachin Bhatia, CEO of Good Creator Co., said the proposed guidelines not only display a positive shift in the government’s perspective on creators, but will also contribute to the overall reduction of wastage as collaborations are bound to be more precise now.