In a bid to rein in “misleading and deceptive” promotions, the Centre is set to issue guidelines for social media influencers. The guidelines will make it mandatory for influencers and creators to make disclosures regarding paid promotions or paid reviews.

The government’s move comes at a time when brands across sectors are increasingly turning to social media influencers for paid promotion and reviews. The idea is to protect consumers’ interests and ensure that the influencers disclose their material connections with brands in their social media posts.

Guidelines to be out soon

The Ministry of Consumer Affairs is the nodal department preparing the guidelines, which are likely to be released in the next fortnight, official sources said. The guidelines are expected to spell out dos and don’ts for social media influencers. It will also be mandatory for social media influencers to declare their commercial relationships with brands. Failure to adhere to these guidelines will make them liable for heavy penalties, sources said.

The Central Consumer Protection Authority can levy penalties of up to ₹10 lakh on endorsers for “misleading ads” in the first instance, and these can go up to ₹50 lakh in the case of further instances. It can also prohibit them from endorsing any products for up to three years.

Last year, the self-regulatory body, the Advertising Standards Council of India (ASCI), also implemented guidelines for influencer advertising on digital media after extensive consultations with stakeholders.

Attracting big spends

Payal Sakhuja, Founder, Ripple Links, an influencer marketing agency that works with leading brands, said, “The influencer marketing segment now attracts big spends from brands. The government’s guidelines will help regularise this fast-growing and unorganised ecosystem. Brands are increasingly doing paid collaborations with creators across all social media platforms. While many large creators already make disclosures about paid partnerships in their posts, these guidelines will ensure disclosures are uniformly made by all creators.”

Lloyd Mathias, Investor and Marketing Expert, pointed out that the key focus will need to be on compliance and enforcement. “The brands also need to be held responsible for ensuring that the guidelines are adhered to by the influencers. At the same time, self-disclosures can get cumbersome and some dialogue needs to happen with the platforms to make it easier for creators to make these disclosures,” he added.

Anjali Malthankar, National Strategy Director, Tonic Worldwide added, “ In the digital first era, focus from official bodies on the entire digital marketing space is a natural reaction. While ASCI has already attempted to bring in guidelines in the interest of the consumer, the government’s guidelines will be adding a stamp of approval on some of them in intent. Consumers are expected to start seeing influencers as advertisers of brands rather than reviewers.”

Brands typically either make monetary payments to influencers or offer free products. Industry players also said that this could make brands re-look at their influencer marketing strategies.

As per digital agency Adlift, the influencer marketing segment in India is pegged at $75 million-$150 million per year. In markets such as the US, the Federal Trade Commission has already enforced guidelines for social media influencers.

Ambika Sharma, Founder and MD, Pulp Strategy, said in the long term, the guidelines will lead to more responsible behaviour in the digital marketing ecosystem, but added that it could also make influencers more cautious in the short-term.