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Endorsement Know-Hows for Social Media Influencers

Considering partnering with social media influencers for marketing your products or services?

In today’s day and age when influencers have the power and the resources to shape the opinions of hundreds of thousands of people, brands are increasingly turning towards them for their marketing and advertising. To the same effect, depending on their reach, influencers can charge anything from a fixed fee to trips to free products to discounts for creating content. The content thus created is consumed by the consumers without the knowledge of this exchange, and an opinion is created in the consumer’s mind that their favorite influencer is fond of a certain brand.

This manner of “influencing” the consumer mindset is only going to grow in the coming years. The Department of Consumer Affairs under the Ministry of Consumer Affairs, Food and Public Distribution has released a guide ‘Endorsements Know-hows!’ (“Guide”) for celebrities, influencers, and virtual influencers on social media platforms. The Guide provides certain guidelines on creating content that content creators should abide by.

The Guide covers celebrities from both, the entertainment, and sports industry, thus covering all actors and athletes, social media influencers (including Instagramers and Youtubers), and virtual influencers (fictional computer-generated ‘people’ or avatars with human personalities, eg. KYRA, Lil Miquela, etc.) (collectively “influencers”).

The Guide specifies that while promoting any products or service, the advertisement must contain disclosures, prominently and clearly displayed in the endorsement, making them extremely ‘hard to miss’. The influencers should further disclose details of the material connection with the advertiser like the benefits and incentives, monetary or other compensation, trips or hotel stays, media barters, coverage and awards, free products with or without conditions, discounts, and gifts, any family or personal or employment relationship.

The Guide provides for the manner of disclosure of the material relationship which includes:

(i) Disclosure in simple & clear language: On limited space platforms like Twitter, terms such as 'XYZAmbassador' (where XYZ is a brand) are also acceptable.

(ii) Plain terms: 'advertisement' or 'ad' 'sponsored' 'paid promotion' or 'paid'.

(iii) Language: Disclosures and endorsements should be in the same language.

(iv) Platform tools: Separate disclosures shall be made apart from platform disclosure tools.

Any violation of this Guide shall be constituted as a ‘misleading advertisement’ and will be considered an ‘unfair trade practice’. In case of violation, the Central Consumer Protection Authority (CCPA) can impose a penalty of up to INR 10 lakh, which can go up to INR 50 lakh for subsequent offenses. The authority can also ban the endorser for a period of 1-3 years.

While the Guide puts the responsibility of disclosures on influencers and not the brands, it is in the interest of the brands to ensure that the influencers they are collaborating with, are in compliance with the Guide, in order to avoid any reputational hits from such influencers being banned.

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