As India witnesses a digital revolution, the influence of online platforms on consumer behavior has surged. According to Forbes, with approximately 67.5% of internet users engaging in social networking, the market has become a battleground for modern marketers striving to distinguish their products in a competitive arena. Amid this intense competition, advertising products uniquely has emerged as a technique for sellers to stand out. In a bid to accomplish this, brands have adopted various techniques and trends. Among other influencer marketing emerged as a driving force in shaping consumer behavior and opinions. The authenticity and relatability of influencers have turned them into trusted sources of information, leading to collaborations with brands to promote products and amplify sales.
Additionally, in an era where consumers increasingly value peer recommendations, influencer marketing has emerged as a potent force in shaping purchasing decisions. With their ability to connect with larger audiences, influencers have gained the power to sway opinions, build a following, and collaborate with brands for endorsement. Brands across industries have recognized the potential of influencer marketing to reach and engage their target audiences effectively. However, the surge in influencer marketing has raised concerns about the genuineness of endorsements, especially in critical sectors like health and finance. As a result, to address these concerns and foster transparency and authenticity, the Advertising Standards Council of India (ASCI), the self-regulatory body for the advertising industry, has introduced comprehensive guidelines for influencer advertising, particularly in health and finance. These guidelines aim to ensure ethical practices and responsible endorsements in these vital areas.
Impact of ASCI’s new guideline on health and financial influencer collaborations and endorsements:
Initiative for Transparency: Need of the Hour
There is no denying the fact that health and finances are two of the most significant aspects of people's lives. In this regard, influencers who endorse businesses or services in these two categories must be well-qualified with credible qualifications and certifications in their realm. Any inaccurate and misleading advertising content in industries such as banking, financial services, and insurance (BFSI), as well as health and nutrition products and services, can have a substantial impact on customer well-being and financial stability.
To emphasize transparency, the revision of ASCI's new standards requires influencers to refrain from making inaccurate or exaggerated claims concerning health and financial items. These rules highlight the necessity of backing up any claims with scientific data, ensuring that customers obtain accurate information that can influence their health and financial decisions. With ASCI's criteria in place, health and financial influencers' endorsements are likely to improve, allowing consumers to make more informed decisions. As a result, influencers must be able to demonstrate their qualifications and credentials when asked to provide evidence.
Authenticity and Ethics: Striking a Balance
It is no surprise that ASCI's new guidelines will represent a significant stride towards ensuring authenticity and ethics in influencer collaborations. The ASCI guidelines apply to advertising content in which a brand, product, or service is directly or indirectly promoted, and there is a substantial connection between the brand and the influencer. Financial influencers will now be authorized to offer investment advice only after being registered with the Securities and Exchange Board of India (SEBI), according to the updated standards. Thus, these guidelines underline the importance of responsible endorsement practices, where influencers wield their influence responsibly, keeping the well-being and interests of their audience at the forefront.
Furthermore, with the requirement that celebrities have a social media following of 500,000 or more on a single platform, the new guideline introduced appears to be a move in the right way. Since it recognizes the need for influencers to take responsibility, particularly in fields such as health and finance where precision is critical. With authenticity and ethics, these policies strive to achieve a balance between allowing influencers to share their experiences and opinions and protecting customers from potentially misleading or erroneous information.
Positive Impact: Safeguarding Brand and Influencers
Influencer marketing relies on communicating a brand's message in a straightforward and approachable manner. People today tend to trust influencers, thus guidelines must be developed. For instance, a financial influencer who lacks real investment experience loses credibility when offering investment advice. However, when guiding followers someone who is informed about financial legislation and investing practices carries more weight. Today, a "one size fits all" approach in these areas can be harmful, and consumers should only listen to educated specialists when dealing with organizations or products in these categories.
Consumers may not always know whether influencers have the necessary qualifications and expertise to offer the correct advice while also informing them of any associated dangers, unlike celebrities who are well-known in their particular sectors. These additional guidelines should safeguard consumers from deceptive endorsements while also benefiting influencers and brands. The recommendations maintain credibility and authenticity by requiring financial influencers to register with regulatory agencies. Thus, these guidelines recognize the importance of influencer accountability, particularly in industries where precision and knowledge are critical.
New Guidelines: Paving the Way for Future
Thanks to the widespread use of social media and the internet, influencer marketing has become a buzzword for every marketer. However, the rise of influencer marketing has prompted questions about the veracity of endorsements, particularly in crucial industries like finance and health. This is where ASCI's new guidelines for health and financial influencers emerged as a significant step towards transparency, authenticity, and ethical practices in the influencer marketing landscape. These guidelines are poised to reshape how endorsements and collaborations occur in critical sectors like health and finance. With the power to impact consumer decisions, influencers now have a responsibility to endorse products and services that are backed by accurate information and genuine benefits. This transformation will not only empower consumers to make informed choices but also elevate the credibility and impact of influencer marketing in India's dynamic digital landscape.
This opinion piece is penned by Sumit Gupta, Founder, The Viral Pitch.
Disclaimer: The article features the opinion of the author and does not necessarily reflect the stance of the publication.