Endorsement Know-Hows: Decoding the future of Influencer led advertising and marketing

“With great power comes great responsibility” The age-old saying has taken a modern twist. Our most sought-after new-age professionals, i.e., content creators and influencers, have finally come under the government's radar. The Department of Consumer Affairs recently released ‘Endorsement Know Hows’- regulatory guidelines for full disclosure of material connections with brands or advertisers on social media. They will now be regulated under the Consumer Protection Act of 2019.

But were these the need of the hour?

The guidelines on influencers are not a new phenomenon. This isn’t the first time that influencer guidelines have come to light. ASCI has been releasing them for quite a long time but it is the first time that guidelines have stirred up a storm in the creator economy. One of the major reasons for the chatter about the impact of the guidelines is its government backing. The Department of Consumer Affairs ‘Endorsement Know-Hows’ ensures that the regulations are implemented by both brands and creators with no room for error or absence. These guidelines will help in streamlining collaborations between a brand and influencer- making the entire process of a collaboration transparent to the consumer as well.

A recent report by ASCI revealed that 90% of the respondents have at least once bought a product recommended by an influencer. Further, 64% of consumers felt that a brand looks more trustworthy if it is endorsed by an influencer. These stats depict a clear picture of the impact influencers hold on consumers. As a result, these guidelines feel like a natural projection toward building and streamlining the massive influencer marketing industry in the country which is expected to grow up to Rs 2457 Cr by 2025. In hindsight, this move shows that the government and other key authorities are considering content creators and influencers as a key aspect of the economy. Let’s deep dive into these guidelines and know how they’ll shape the future of influencer-led marketing

Decoding the guidelines and their effect on key stakeholders - influencers and brands

Endorsement Know-Hows covers a broad spectrum of celebrities, influencers, and virtual influencers. The guidelines describe in detail the definition of each individual/ group covered under the spectrum. They further demand creators and influencers to clearly state if they’ve any material connection with the brand and product they’re sharing through multiple ways. For example, while posting collaboration content in the video format, the stakeholders will be required to add an audio and text disclosure, while in static posts, they’ll have to superimpose the disclosure over the picture to make it extremely hard to miss. While we have seen numerous regulating guidelines in the past, I believe with the government coming into the picture, ‘Endorsement Know Hows’ will have a serious impact.

Here’s how we believe they’ll impact the key stakeholders in the industry:

Influencers:

● Since brand collaborations are a key source of income for influencers. The impact of these guidelines will depend on several factors such as - are creators already following best practices for disclosure or not. For those who are, these guidelines will not have a significant impact them. However, the creators will now have to change their way of presentation for collab content to adhere to the guidelines

● Further, the implementation and penalisation of defaulters will encourage creators to be more transparent and honest about disclosures.

● It’ll be interesting to see how influencers tweak their content to share honest opinions and experiences while also clearly stating the fact that they’re being paid to promote a product.

Brands:

● Over the years, brands have witnessed and reaped the exponential benefits of influencer marketing. Thus this is a crucial part of their marketing campaigns. However, we’ve time and again seen some brands are not intrigued by the thought of adding collaboration or promotion disclosures.

● These guidelines are here to bring a mindset shift amongst brands. Brands no longer have the option to pay creators to hide the material relationship and encourage them to build honest communication. With greater transparency and increased accountability, brand-influencer relations will also strengthen. Clear and crisp expectations will help build more positive and long-term relations.

● Another serious impact I can anticipate is that brands might encounter an increase in costs since they sometime will have to train influencers and monitor compliance.

In conclusion, I believe the guidelines are a step towards regulating the creator economy serving the need of the hour. The ‘Endorsement Know-Hows’ is being considered a welcome step in by the key stakeholders. It will help bring transparency to advertising space and hold influencers accountable for the crucial role they play in influencing consumer decisions. It will also help recognise content creation as a real, impactful profession. With these guidelines in place, it’ll be interesting to see how the landscape adapts to the changes and become more professional.

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) 

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