Disclosure norms for influencers welcome

The guidelines issued by the government for social media influencers who make public endorsement of products, services, schemes, etc., will hopefully help to better protect the interests of consumers at a time when they are often taken for a ride by publicity campaigns and promotional overdrives. The guidelines have made it mandatory for social media influencers to disclose all “material” interest, such as gifts, hotel accommodation, equity, discounts and awards given to them when they make their endorsements. Celebrities and other influencers endorse content on social media platforms, and they are paid for it by advertisers. They will now have to prominently spell out in their content, audio, visual or live-streamed, the material gains that they receive for their endorsement. Penalties for violations include fines and a jail sentence. The disclosures should be in simple and clear language, of duration that is hard to miss, and must be run with the endorsements. There are other specifications, too.

The reach of the social media has expanded phenomenally in the last few years and it is set to increase further. People spend a lot of time on it, and it is even a part of life and livelihood for many people of all ages and social classes. Social media personalities who have millions of followers are harnessed for endorsements by companies to take advantage of the high media engagement of people. It is estimated that there are over one lakh social media influencers with a large number of followers. The social media influencer market in India was worth about Rs 1,275 crore in 2022 and is likely to rise to Rs 2,800 crore by 2025, growing at a compounded annual growth rate of 19-20%. Since the advertisement expenditure on digital platforms is increasing, it is necessary to ensure that consumers are not misled or duped.

The credibility of those who make endorsements becomes important in this context. Consumers have the right to know the gains made by their role models in terms of monetary and other benefits so that they can make a judgement of their own on trusting these influencers before they make their choices. This is essential in a competitive market where all kinds of claims are made. The guidelines come under the ambit of the Consumer Protection Act. The aim is to ensure that there are no unfair trade practices in the commercial advertisement activity on social and digital media platforms. The Advertising Standards Council of India had in 2021 mandated that influencers should add a disclosure label to clarify if their post included paid promotion. But this was not observed by many. The new norms are expected to enforce the regulation.