New disclosure rules might cramp influencers’ style starting today

The Advertising Standards Council of India (Asci) will scan digital content to ensure such disclosure, as well as prominent labelling of promotional content, avoidance of filters on paid content, and appropriate due diligence about products or services the influencers promote, in line with guidelines.

Asci has partnered with French technology provider Reech to actively monitor social media platforms for defaulters, by using artificial intelligence (AI) to scan digital content. “One cannot monitor all of the internet 100% of the time. We plan to deploy this technology to do scans of different platforms, influencers, and categories from time-to-time," Asci secretary-general Manisha Kapoor said.

In case of a complaint, the advertiser can ask the influencer to delete or edit an advertisement or modify the disclosure label to adhere to the Asci code and guidelines. Influencer-related complaints will be a part of the Asci monthly consumer complaint report, where it discloses the details of misleading advertisement complaints that it receives.

“Our aim is to educate people and make influencer marketing a responsible industry. We are not a penalizing body but defaulters will be asked to take down ads or make a correction. We are willing to go down the path of education and constant dialogue and clarify doubts, while these rules are being implemented," Kapoor said.

Digital marketing agency AdLift estimates India’s influencer market at $75-150 million a year, compared to the global market of $1.75 billion.

India’s influencer marketing space is growing rapidly but is still young when compared with mature global markets such as Ireland and Italy where influencer marketing guidelines have been put in place as early as 2016. The Federal Trade Commission in the US and the Competition and Markets Authority in the UK have also released guidelines for social media influencers.

Unlike advertisements on traditional platforms such as television or print, influencer promotions often come in the garb of content as a part of the larger story and subtly seeded in videos or photos without any disclosure, making the whole placement look rather organic. This benefited brands immensely as their sales skyrocketed with millions of users believing that their favourite influencer genuinely uses a particular product.

Lack of disclosure or labelling has pretty much worked well for brands, said Devanshi Sodhani and Aditi Kanakia, founding partners, Abridge Entertainment Ventures, an influencer and content marketing agency that handles clients such as PepsiCo, Hometown, and Mitsubishi Electric. Hence, Kanakia encourages influencers and content creators to be more subtle and organic while posting branded content. “Disclosures will definitely have a dampening effect. Both brands and influencers need to be prepared for that. However, at the end of the day, it is good content that will always work," said Kanakia.

Direct advertising and blunt call-to-action posts from influencers often get less traction, especially when there is a paid partnership tag. With disclosure becoming mandatory, influencer marketing will suffer slightly to begin with. However, after that effect wears off, we see the impact being positive for brands," said Sodhani.

Requests to not label a post as promotional differ also from company to company, said Neel Gogia, co-founder, IPLIX Media, an influencer marketing and talent management agency. “Small, homegrown firms are often against such disclosures as they look at high sales conversions through influencer marketing. However, global brands that use influencers for awareness and brand building tend to follow global rules and ethical practices," Gogia said.

Beauty firm L’Oreal launched its own ‘Influencer Value Charter’ two years ago in which it states it does not work with influencers who use artificial means to inflate follower count or who are under 16 years. It also highlights that influencers are mandated to disclose their paid partnership with the firm on promotional posts.

“L’Oréal welcomes the Asci influencer guidelines and is fully supportive of them... Because we respect consumers and want to continue to deserve their trust, transparency and integrity, we are committed to developing transparent, respectful, and professional relationships with influencers and, indirectly, with their respective audiences," a L’Oreal India spokesperson said.

Direct-to-consumer (D2C) beauty startup Pureplay Skin Sciences, which owns beauty brands such as Plum, Phy, and PlumBodylovin, acknowledges that engagement levels are impacted when a post is flagged as paid engagement.

“While initially brands might achieve heightened awareness by not getting influencers to disclose the nature of the partnerships, today’s digital content consumer is evolved enough to be able to tell the difference," said Stuti Sethi, senior marketing manager, Pureplay Skin Sciences. “That’s exactly why multiple brands today are being called out for not being honest with viewers. Brands have, thus, to decide whether they’re gunning for short-term awareness or building a lasting, trustworthy brand," Sethi said.

The onus is also on the creator to make a paid engagement seem interesting and engaging, said Indian digital content creator Niharika N.M., who is based out of Los Angeles. The 23-year-old influencer has more than 1.7 million Instagram followers and more than 600,000 YouTube subscribers.

“If you make a sponsored content piece that is aligned with the rest of your organic content, I don’t see why an audience wouldn’t engage with it. I made a content piece for dating app Bumble and it’s one of the best-performing Instagram reels on my profile, which is why I think that even when it’s sponsored, if your content is compelling enough for your audience, you’ll still rake in the same numbers as an organic content piece, if not more," she said.

Niharika believes that disclosures only add to the brand value of an influencer for being honest and transparent. “Often when I’ve uploaded sponsored content, I’ve got comments from my audience along the lines of ‘Secure the bag queen’ or ‘Get that coin girl’, which is very supportive," she said.

Disclosures help consumers to be aware and then take an informed decision, said Krishna Rao, senior category head, Parle Products. “I think it’s in the interest of both the advertiser and end consumer, and also in the interest of influencer," he said.

About 10% of the packaged food company’s advertising budgets are spent on digital ads, with the bulk of ad dollars going towards advertising on television. The maker of Parle-G biscuits has used influencers on and off. “We have used them in the past but not at a very high level. We will continue our strategy of using influencers as and when required," Rao said.

Mondelez, Diageo, and Pepsico did not comment on the development.

Asci’s guidelines are also expected to tighten the noose around brand categories that use influencers to promote products such as alcohol, which are barred from advertising on television or print. In the absence of advertising regulations for digital, alcohol brands seem to be having a free run on over-the-top (OTT) video streaming platforms, YouTube and Instagram.

Adding a label to a paid promotion might make the campaign appear inauthentic as opposed to more organic content, said Anand Virmani, co-founder and chief executive officer, Nao Spirits and Beverages. “We don’t do too much influencer collaboration in any case, but it does bring more transparency for the end consumer because you know someone is getting paid to promote your product," he said. Nao Spirits and Beverages sells gin under the Hapusa and Greater Than brands.