The Advertising Standards Council of India (ASCI) released influencer marketing guidelines in May 2021, which became applicable to content/posts published by influencers on or after June 14, 2021.

The raison d'etre of the guidelines is to protect consumer interest by helping them distinguish between genuine recommendations of a particular brand on a social media post vis-à-vis a communication sponsored by a brand.

Who is an Influencer?

The definition of an influencer is broad - there is
no minimum threshold prescribed for followers. Anyone ‘having access to an audience and power to affect such audiences’ purchasing decisions or opinions about a product, service, brand, or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience’ is an influencer.

A fictional computer generated person or avatar who has realistic characteristics, features and the personality of a human can also be an influencer and is termed a ‘virtual influencer’.

Nature of disclosures

A social media post with sponsored content, must carry an upfront and prominent disclosure. Permitted labels for disclosure include the words advertisement, ad, sponsored, collaboration, partnership, employee and free gift’, which may be in English or in the language of the advertisement.

Disclosure only on a profile page or as a hashtag or link is insufficient; detailed instructions are outlined for different formats - photos, short videos, long videos, livestreams, stories, reels etc. For instance, disclosure labels must stay on anywhere between 20% of a video’s duration to the whole time a promoted brand is being showcased, depending on the total length of the video. In livestreams, the disclosure must come at the beginning and the end, and is to be included in the caption, if the post remains visible permanently.

When is disclosure necessary?

A disclosure is required if there is any material connection between the advertiser and the influencer.

‘Material connection’ refers to a connection which may affect the weight or credibility of the representation made by the influencer, and could take the form of monetary compensation, free products including unsolicited ones, discounts, gifts, contest and sweepstakes entries, trips or hotel stays, media barters, coverage, awards or any family or employment relationship, etc.

Disclosures are required even if the evaluations are unbiased and originate from the influencer, so long as there is a material connection between advertiser and influencer. A virtual influencer too must disclose upfront that it is not a real human being.

To dispute a material connection, an influencer must submit a declaration from the concerned advertiser stating there is no such connection. In the event the advertiser is difficult to trace, or the piece of communication features multiple brands, then proof of purchase of the featured products and brands is to be provided by the influencer.

Key Implications

Apart from disclosure about a ‘material connection’, the key obligation on an influencer is to undertake due diligence to ensure that the advertiser is capable of substantiating the claims being made by the influencer on its behalf.

Advertisers, of course, must ensure that brand communications made by an influencer they have contracted with fully comply with the guidelines.

There are close to half a billion social media users in India and reportedly an average internet user in India is spending upwards of 3-4 hours browsing social media on a daily basis. These numbers are only set to rise and coupled with the fact that the Indian advertising industry is also growing at a rapid clip, the new guidelines have come at an opportune time.

In the immediate aftermath, contractual agreements in the sphere of social media will be re-calibrated to ensure both parties include suitable guarantees to avoid liability. That said, ASCI is a voluntary self-regulatory body and thus, its new guidelines are not law. However, it is established practice in the Indian advertising industry to comply with ASCI’s Code for Self-regulation of Advertising Content in India, which the courts too have recognised several times in the past.

Here’s looking forward to more socially conscious and responsible advertising!