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Endorsement Know-How

Although the Internet originally arrived in India in 1995, it was when Reliance Jio introduced their yearly free Internet-for-all sim cards in 2015 that it reached every home. In India, a new era of content consumption began with this offer and its subsequent impact on lowering pricing rates for all internet service providers. As a result, “Social Media Influencers,” a novel source of income and a novel professional route for the Indian diaspora, emerged.

During the COVID-19 lockdowns, which lasted from early 2020 through the end of 2022, Indian social media influencers experienced a 46% increase in influencer marketing. As a result, the market for social media influencers in India was worth INR 1,275 crores in 2022, and it is projected to grow to INR 2,800 crores by 2025, at a CAGR of more than 20%.

According to the guidelines released publicly for celebrities and social media influencers, they must disclose any financial or material benefits they receive in connection with any company or product they promote. This can be accomplished on social media by including statements like “This is a paid sponsorship” below sponsored posts.

The guidelines issued by the Center have been applauded by the Advertising Standards Council of India (ASCI). This voluntary and self-regulatory organization works to protect consumer interests through self-regulatory measures and rules for advertising.

This rule will have the most prominent effects on businesses that engage in barter collaborations such as sponsored tours, hotel or villa stays, etc. when there is no monetary transaction.

Companies that align themselves with veteran actors and actresses and take advantage of their status to disregard ASCI’s stated rules will now be forced to follow the statutory regulations implementing the norms.

“Consumers may become more aware of when an endorsement is sponsored, which could lead to increasing skepticism about the legitimacy of the endorsement,” said Vikas Mangla, creator of DigitalROI. In addition, the relationship between advertisers, influencers, and other endorsers may need to be more open to avoid growing scrutiny of these interactions.