Indian Government Draft New Guidelines for Influencers: What’s Next?

Decoded: The Impact of New Guidelines on Your Influencer Marketing Strategy

Did you know that the Indian government is introducing new guidelines for social media influencers? This is happening in the wake of the crypto crash – as a consequence of celebrity influencers promoting cryptocurrencies indiscriminately. To put it simply, social media influencers are on the government’s radar. So, how these “new guidelines” are going to influence a brand’s influencer marketing strategy? Let’s find out!

The Rise of Influencers – Explained by Influencer Marketing Companies

Have you ever purchased a product or avail of a particular service because your favorite celebrity earnestly recommended it? This is what influencer marketing is about. Social media influencers have been booming for years and are now being hailed as new-age marketing.

As of 2021, the Indian influencer marketing industry was around 9 billion INR. It is projected to expand at a compound annual growth rate of 25% over the next 5 years. Therefore, the market value is expected to reach 22 billion INR by 2025.

New Guidelines for Influencers and Content Creators on Social Media 

The government is issuing new guidelines on paid promotions for social media influencers. And yes, this includes hefty fines! The announcement of new regulations comes from the ad regulator ASCI (Advertising Standards Council of India).

The Department of Consumer Affairs announced during a meeting on May 27th, 2022 that they will examine the magnitude of fake reviews and outline the path ahead after becoming aware of misinformation on social media and e-commerce. This is done to regulate the influencer economy and develop checks and balances for crypto transactions.

What do these Guidelines Entail?

As per information received from sources and influencer agencies, a draft of the guidelines could be introduced to prevent false advertising and misleading promotions. The motive is to protect consumers’ interests and make certain that the influencers would be able to disclose their material connections with companies in their social media posts.

When creating an influencer marketing strategy, social media influencers will have to disclose their relationship with a brand if they advocate it after receiving payment. Thus, they would be required to reveal any vested interests or monetary in the product/service that they’re promoting in the form of disclaimers.

Influencers posting bogus reviews or endorsing brands without the necessary controls and checks will be subjected to punishment. According to the law, influencers are liable for violations upto 10 lakh INR for a first offense. The fine could extend to 20 to 50 lakh for recurring offenses. They could be even prohibited from endorsing any products/services for up to 3 years.

Why Influencer Guidelines are required?

In this social media age, there are huge possibilities of consumer rights violations by brands and influencer marketing agencies across distinctive industries. This is simply because more brands resort to social media influencers for paid advertising, marketing, and reviews. Sometimes, influencer marketing can mislead consumers to blindly purchase a wrong product.

To prevent such fraudulent advertisements and help consumers make more informed purchase decisions, the government sets some guidelines for social media influencers. Most brands in the world already have such guidelines for influencers, but India is still an unconsolidated market with no strict rules.

As influencer marketing has spread across diverse industries, the introduction of new guidelines may bring more awareness among consumers, create more brand transparency, and create a responsible marketing ecosystem. Social media platforms like YouTube, Instagram, and Facebook have already made it mandatory to disclose the brand association with influencers whether it’s sponsored or not.

What are the Concerns?

Considering that most of the influencers are nano, micro, and mid-tier influencers, some influencer agencies and experts are concerned that these guidelines could boil down to the small-scale influencer marketing sector. For example, they may badly impact food bloggers working with a bunch of restaurants.

Some digital creators point out that these rules have combined influencers of all sizes under one umbrella. Since micro and macro influencers earn considerably lesser, imposing the same hefty fine on them would be unfair. Many also believe that both influencers and brands are involved in collaborations. So, the accountability shouldn’t lie on the former alone. What do you think?

If you’ve an influencer marketing strategy to discuss, contact us today.

  • Who is making use of an influencer marketing strategy?

Influencer marketing covers a wide range of market categories, including food, beauty, pet care, retail, health, charities, and much more. Many big brands like Adidas, Pepsi, and Dunkin’ Donuts use influencer marketing to target their audience through social media.

  • Is it aviable option for small businesses?

Yes! Influencer marketing is a cost-effective way to bring greater returns than other marketing strategies. It’s proven to outperform traditional strategies like banner ads.

  • How do I get started on my next influencer marketing campaign?

If you have decided to create an influencer marketing strategy, you can either do it in-house or hire influencer marketing companies. Both have pros and cons, but most brands choose to go with a marketing agency since it’s more cost-effectiveand time-efficient.