Will the Self-Declaration Mandate Impact Influencer Marketing?

The ASCI report for 2023-24 highlights a surge in ad violations, with influencer marketing being the primary offender. However, the recent Supreme Court mandate introducing the self-declaration mandate (SDC) does not clarify how it will address these violations.

Understanding the Self-Declaration Mandate

In June 2024, the Indian government introduced the self-declaration mandate (SDC). This regulation requires advertisers and advertising agencies to submit a declaration before publishing any advertisements. While its aim is to enhance transparency and reduce misleading advertising, the SDC has notable limitations concerning influencer marketing.

Spotlight on Limitations

The SDC targets traditional advertising formats like print, television, and digital media through established channels. This focus on advertising transparency might indirectly encourage influencers and brands to adhere more closely to ASCI guidelines, ensuring proper disclosures in their collaborations. However, influencer marketing, which operates primarily on social media platforms outside the purview of traditional advertising agencies, may not fall within the immediate scope of the SDC.

Kushal Sanghvi, Business Mentor at HRD Network, commented, “It's a long-term good proposition. In the social media and influencer marketing space, the need of the hour is to have some industry standardization.” He highlighted the struggles small-scale brands face in investing in influencer marketing, noting the disparity in pricing. A large brand might spend 5 lakhs on a Twitter post, while a small brand hesitates to spend 20,000 rupees.

The transparency enforced by the SDC could lead to better consumer insights and optimized investments, facilitating more effective performance analysis.

The Growth and Challenges of Influencer Marketing

India's influencer marketing industry is booming, with brands increasingly leveraging social media stars to reach consumers. To ensure ethical practices and protect consumers from misleading advertising, the Advertising Standards Council of India (ASCI) established influencer marketing guidelines in 2021. However, as the industry evolves, some argue that these guidelines have loopholes and that the SDC is neither well-thought-out nor comprehensive enough.

Hitarth Dadia, CEO and Partner at Nofilter, stated, “Our industry is still young, lacking standardization. Brands paying creators to simply produce ads isn’t the best use of the creator’s credibility or creativity.”

If the SDC eventually expands to include influencer marketing, additional paperwork and compliance requirements could burden influencers and brands, potentially stifling creativity and hindering collaborations. Rohan Shah, co-founder of Realatte Digital Marketing Agency, emphasized the need for agencies to develop tools and guidelines to facilitate adherence to regulations while fostering innovation in compliance solutions.

Collaborative Approaches and Future Implications

With measures to regulate influencer marketing beyond the SDC mandate, involving creators in marketing discussions can significantly shape campaign structures and enhance conversions. This collaborative approach is seen as a forward-thinking strategy for the industry.

The SDC's implementation could pave the way for future collaboration between the Ministry of Information and Broadcasting (which enforces the SDC) and ASCI (responsible for influencer marketing guidelines). Such collaboration could lead to a comprehensive framework encompassing all aspects of advertising transparency.

Chaaya Baradhwaaj, Founder of BC Web Wise, said, “Creating specific regulations for influencer partnerships and branded content can ensure clarity and compliance within the SDC framework, encouraging clear and transparent disclosure of sponsored content.”

The Rise of Influencer Marketing and the Need for Regulation

India's digital landscape is vast, with millions following social media personalities with niche expertise or relatable lifestyles. Influencer marketing leverages the trust and social clout of individuals online to promote products or services.

While the ASCI guidelines represent a positive step toward transparency, some industry experts point out potential loopholes. One key concern is the lack of a clear definition for 'material connection.' Ambiguity around this term can lead to confusion, with influencers unsure whether minor benefits like gifted products require disclosure. Additionally, the current focus on established influencers might not address the rise of micro-influencers—individuals with smaller but highly engaged audiences. Without specific guidance for micro-influencers, inconsistencies in disclosure practices could emerge.

The Solution: SelebZ and Authentic Content Creation

Navigating the complexities of influencer marketing and adhering to regulations can be daunting for brands. That's where SelebZ comes in. At SelebZ, we create authentic and engaging Instagram Reels, reels videos, and Instagram for videos content through our in-house creators. This approach ensures brands avoid the pitfalls of influencer marketing, such as fake metrics and high costs, while delivering genuine and impactful content.