Social media influencers have a new worry: Govt guidelines on endorsements

The draft guidelines said that an endorser should take legal opinion or opinion from an advertising self-regulatory organisation for "due diligence".
Social media influencers may have to research brands before endorsing them after the government issued draft guidelines against misleading advertisements: the latest challenge for a community battling marketing budget cuts and India’s ban on TikTok.

The Ministry of Consumer Affairs this week issued draft guidelines on diligence to be done for endorsements. The guidelines, issued by the ministry’s Central Consumer Protection Authority, said the guidelines would apply to all advertising and marketing communications regardless of form, format or medium. Endorsements must be based on either adequate information about or experience with the service or product being endorsed. The regulation adds to the list woes of influencers, according to industry experts.

"The influencer marketing industry is growing very fast and is now (Rs) 3,000-crore industry in the country. So its size and growth has caught government attention," said Amit Nagpal, president and co-founder of Bloggers Alliance, an association of bloggers, vloggers and creators.

"The 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," said Nagpal, who is an advisor to NASSCOM Insights.

"The rules now only place unnecessary roadblocks and skepticism 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," said the co-founder of a Mumbai-based influencer-marketing firm on the condition on anonymity.

The draft guidelines said that an endorser should take legal opinion or opinion from an advertising self-regulatory organisation for "due diligence". An endorser has to ensure that all descriptions, claims and comparisons that they back are capable of being objectively ascertained and are capable of substantiation. The guidelines are open for public comments till September 18.

They were issued after India in June banned TikTok, the largest digital platform for influencers whose followers extended to tier 2, 3 and 4 cities across India. A user with a 1 million follower base could earn Rs 30,000-35,000 a month, according to a report by the Indian Institute of Human Brands (IIHB). Earnings could be in the range of Rs 50,000 for an influencer having double that follower count. The ban on TikTok is estimated to have caused an income loss of about ₹120 crore each year for the top 100 influencers on the platform, the report said.

Some experts say the guidelines will scare smaller influencers and in turn deter the growth of digital advertising industry for a while, but may benefit in the long term.

"The need is precipitated by the fact that for every one responsible marketer and advertiser, you have one irresponsible one. It is time to regulate this with clearcut guidelines with no room for ambuguity," said Harish Bijoor, brand strategy expert and founder, Harish Bijoor Consults. "In the long run, this will lead to more responsible behaviour in the digital marketing ecosystem."

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