One click and a million hits: analysing the ASCI guidelines for influencer advertising on digital media

The rapid expansion of digital advertising has gone on in a mostly unregulated manner. ANUSHKA BORKAR writes about the Advertising Standards Council of India's new guidelines on the use of social media influencers in digital media and the need for regulation, drawing inspiration from prevailing practices worldwide.

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THE world is witnessing a rapid expansion of digital advertising, and the COVID-19 pandemic has only accelerated this growth.  The power of celebrities and influencers to sway consumer choices cannot be ignored.

Recently, cricketer Virat Kohli's Instagram post praising Lovely Professional University after its students made it on to the Indian squad for the Tokyo Olympics, came under the scanner of the Advertising Standards Council of India (ASCI), and had to be edited to include a 'paid partnership' tag. Against this backdrop, the ASCI has taken on increased responsibility. It released the Guidelines for Influencer Advertising in Digital Media, which came into effect from June 14, 2021. Since then, it has made continuous efforts to ensure compliance.

Recently, the ASCI inducted Aditya Swamy, Director of Google, India into its board while Sandeep Bhushan, Head of India, Global Marketing Solutions at Facebook, is a special invitee to the board. The ASCI is working to strengthen its roots in the 'digital space' and bring about a constructive change. An analysis of the guidelines issued by the ASCI provides insight into the effectiveness of these regulatory developments.

India is witnessing an exponential increase in the number of individuals on social media. The digital universe has expanded beyond the mere exchange of email correspondence to include a plethora of platforms that facilitate the sharing of one's daily life and choices. Social networking has become an indispensable part of the everyday life of millions of Indians.

Traditional marketing strategies are now inadequate to reach and influence target audiences, necessitating that marketing takes a whole new dimension. Consequently, digital marketing has emerged as the new cornerstone of advertising. With a sizable consumer population on social media, businesses have capitalized on this increasing digital presence to further their own interests.

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In this constantly changing world, social media influencers are the latest crowd-pullers. Influencer marketing presents an opportunity for brand owners to engage with consumers at a more personal level. With millions of followers at a click, influencers have immense potential to shape the lifestyle choices and purchasing habits of people. Recognising their power to sway consumer choices, businesses have started employing them to endorse and promote their products. Scottish entrepreneur Pete Cashmore, founder of international media platform Mashable, aptly remarked "We're living at a time when attention is the new currency. Those who insert themselves into as many channels as possible look set to capture the most value."

With this objective in mind, the ASCI issued the Guidelines for Influencer Advertising in Digital Media to ensure that consumer interests are not lost in the battle for commercial profit. These are in line with the UK Code of non-broadcast advertising and direct and promotional marketing (CAP Code).

The ASCI guidelines for influencer advertising in digital media

ASCI.Social is the ASCI's digital platform, launched to ensure that all stakeholders are aware of these new guidelines.

According to the guidelines, an influencer is defined as one who has access to a large audience and by virtue of his knowledge, position, or relationship with the audience, has the power to affect their purchasing decisions. Further, it defines virtual influencers as fictional, computer-generated avatars who act in a manner similar to that of influencers. The inclusion of this definition is a positive step, given the growing popularity of virtual influencers.

The primary objective of these guidelines is to help consumers identify and distinguish paid promotional content from other content posted by influencers. If there is a material connection between the influencer and the advertiser, the post must have a disclosure label that clearly identifies it as an advertisement.

A material connection is not limited to monetary compensation or financial incentives received by the influencer. It includes other benefits such as free products, discounts, gifts, trips, hotel-stays, contest entries or any employment relationship or benefits, which have the tendency to affect the weight and credibility of the representation made by the influencer.

The disclosure must be upfront and prominent; it is not enough to include it in one's profile and it must not be buried in a sea of hashtags or links. In case a picture or a video is posted without any accompanying text, the disclosure must be super-imposed over the picture or video such that it is clearly visible to an average consumer.

The period of time for which the disclosure must be visible varies with the length of the video. In live streams and audio media, the disclosure must be announced at the beginning and at the end, and after every break taken in between.

Jurisdiction of ASCI

The ASCI is a non-governmental body. Therefore, the foremost question that arises is whether the ASCI can enforce these guidelines. In Common Cause (A Regd. Society) v. Union of India and Ors. (2017), the Supreme Court recognised the ASCI's self-regulatory mechanism for advertising content. In Procter and Gamble Home Products Private Limited v. Hindustan Unilever Ltd. (2017), however, the Delhi High Court held that even though the ASCI has a Consumer Complaints Council, its purpose is only to self-regulate. The Court went on to say that the ASCI cannot be said to have been established for the purpose of dispute resolution.

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The guidelines do not specify a redressal mechanism. On receiving a complaint, the ASCI expresses its concerns to the advertisers and gives them a chance to take corrective action. If they contest the claim, the Consumer Complaints Council (CCC) examines their response and considers the evidence submitted, to assess whether the content is in violation of the guidelines issued by the ASCI. This recommendation is communicated to them along with a timeline to implement the same.

Nonetheless, even when it finds merit in a complaint, the ASCI can only recommend that the advertiser remove the advertisement. It has no mechanism to grant interim relief or award damages, or compel the removal of the advertisement; it has to rely on the voluntary action of the advertisers. The only option that remains when advertisers are non-compliant, is to report the matter to statutory bodies or government departments.

Challenges faced and the way ahead

The foremost issue relates to the enforcement of these guidelines. In Primordial Systems Private Limited v. the Advertising Standards Council of India (2019), Delhi's Tis Hazari district court held that the ASCI's decisions will be binding on both its members as well as non-members. D. Shivakumar, the then chairman of ASCI, hailed it as a significant judgement as it clarified that all advertisers come under the purview of the ASCI's guidelines. If the advertiser does not comply with the directions issued by the ASCI and refuses to remove the post, further action should be sought under Section 89 of the Consumer Protection Act, 2019 which provides for imposition of fine as well as imprisonment for false or misleading advertisements.

In addition to this, India should encourage the practice followed in Germany, where the law provides a horizontal market control approach in which competitors or specific consumer associations are entitled to police market participants. This will ensure wider reporting of disclosure breaches.

In India, digital marketing faces another challenge due to the diversity of its target audience. According to the guidelines, the disclosure should be made either in English 'or' in the language of the advertisement. Instead of 'or', 'and' should have been used, because if the advertisement is in a regional language and the disclosure is made in English, people who do not understand English may be misled.

Moreover, the guidelines contain a list of terms according to which the use of one or more words such as 'ad', 'advertisement', 'sponsored', 'collaboration', 'partnership', 'employee', and 'free gift' are considered valid disclosures. Research by the Advertising Standards Authority in the United Kingdom found that people struggle to identify social media posts by influencers as advertisements. Thus, in the UK, the list of permitted disclosure is mostly limited to using words such as 'ad', 'advert', 'advertisement' or similar terms, depending on the context of the post. Along the same lines, the list of permitted terms for disclosure in India must be narrowed down.

Influencers are advised to review and satisfy themselves that the advertiser is in a position to substantiate the claims made in the advertisement.

The guidelines require the influencers to carry due diligence on their part. Companies that enter into arrangements with influencers, however, need to factor in that an influencer is unlikely to appreciate the nuances of consumer protection law and may require guidance to ensure compliance with the applicable law. They should take the responsibility of providing the guidance necessary to comply with the applicable marketing regimes.

Further, separate provisions must be created regarding disclosure of affiliate marketing. In the UK, affiliate marketing comes within the scope of disclosure. When an individual's post contains a discount code or a hyperlink and they are paid for every 'clickthrough' or sale that can be tracked back to the content posted, they act as a secondary advertiser. An influencer's account is a hybrid between fulfilment of personal and commercial interests, and only a case-by-case examination will determine whether a disclosure is necessary.

An important clause which India can borrow from the UK is one that states that influencers must not encourage their followers to take part in food challenges or condone excessive consumption of food. This is essential in promoting good dietary behaviours, especially among young social media users.

A question that remains unanswered is whether and how these guidelines will be enforced when a post is made outside India, as digital space is not restricted by geographical boundaries.

The European Advertising Standards Alliance (EASA) is regarded as the single authoritative voice on advertising self-regulation issues in Europe. The EASA's cross-border complaints system provides its members an opportunity to work together at the international level and gives them a chance to address certain common challenges. The codes of advertising practice of the EASA are based on the globally accepted codes of marketing and advertising practice of the International Chamber of Commerce. The supranational character of the European Union makes cross-border enforcement of provisions possible. Establishing a cross-border complaints system requires tremendous time, effort and diplomatic engagement. India needs to find a way to make these guidelines enforceable in case a post is made outside India.

The use of digital technology has increased exponentially and companies have embraced influencer marketing with open arms. The guidelines by the ASCI are a step in the right direction. They, however, are not enough. The way ahead for India lies in strengthening these guidelines to effectively address potential challenges, to ensure that individuals can make well-informed choices.

(Anushka Borkar is an undergraduate law student at the National Academy of Legal Studies and Research (NALSAR). The views expressed are personal.)