Influencer Endorsement

Context:

The Centre has released the endorsement guidelines for celebrities and social media influencers titled as the “Endorsements Know-hows!”.

These guidelines have been issued under the overall ambit of Consumer Protection Act 2019.

What are Celebrity Endorsement:

Endorsements are a form of advertising that uses famous personality or celebrities or social media influencers who command high degree of recognition, trust, respect or awareness among the people.
Endorsement by celebrities or influencers have a greater capability to persuade buyers as they are viewed as role models in a society.

Ethical Issues in Influencer Endorsement:

Instances of misuse of Trust: Followers are bound in a strong manner with the influencer. They trust that influencers would not recommend something that is harmful, or low quality. However, this is not the case with brand marketing by such influencers.
High influence but less responsibility: Influencers have higher ability to persuade consumers. However, there is no responsibility mechanism for checking the endorsed products.
Difficult to distinguish commercial messaging: Promotion by influencers often do not look like commercials but rather as general advices. o Advertisements are posted without any such disclosure and are difficult to identify.
Lack of understanding of nature or quality of product by influencers: Sometimes, influencers themselves have limited idea of the quality of product they are promoting. This was evident in Fyre festival fraud.
Conflict of interest and deceptive marketing: Often the products are advertised showing that they have been made keeping the benefits of consumer in mind but are actually promoted based solely on profit motive.
Targeting of vulnerable groups such as children or teenagers, that may not be able to critically evaluate the products that influencers are promoting.

Perspective of Influencer:

Unreasonable expectation of detailed due diligence: Celebrities are often blamed for not performing due diligence on brands they endorse. This expectation of due diligence is often open-ended and unreasonable.
- Also, appropriate data for such due diligence may not be in public domain.
Brand responsibility: Influencer groups have argued that Brands should be made equally responsible for framing a misleading advertisement in the first place.
Moral boundaries, in the case of products like carbonated beverages and fairness creams, should be drawn by the individual celebrity himself/herself.
- For instance, P. Gopichand decided not to endorse carbonated soft drinks owing to their deleterious health effects.
Influencers reputation and credibility is at stake in a brand’s endorsement. So, they themselves are often mindful about endorsement decisions as their name is associated with the brand image for a long time.

Guidelines for Celebrity and Social Media Influencers:

Compulsory disclosure of monitory or material benefits of a product or a brand they are promoting through their social media platforms.
Penalty: Failure of compulsory disclosure will attract a penalty up to ₹ 50 lakh.
Clear communication: The disclosures must be prominently and clearly displayed in the endorsement and terms such as ‘advertisement’, ‘sponsored’ or ‘paid promotion’ should be used for all sort of endorsements.
Advertise responsibly: They should not endorse any product or service in which due diligence has not been done by them or that they have not personally used or experienced.

Way Forward

Code of ethics for social media influencers: It should include establishment of authenticity of the products by them and promoting safe and beneficial products to their audience.
Self-regulation by celebrity or influencer groups: Influencer marketing industry should come up with a set of guidelines and best practices that influencers can follow to ensure that their promotions are ethical and transparent.
Effective age restrictions and parental controls: To prevent targeting of children or teenagers to such misleading advertisements.
Creation of a governmental due diligence structure: Government can form a committee or a forum to consistently check products or services for their claims.
- This will limit the onus of due diligence on celebrities and will create a sense of brand responsibility.