Influencer marketing has got fresh impetus owing to the new age of Work from Home and eyeballs on phones. The billboards have now been replaced by the content pieces we come across on social media translating to lesser cost per view/recall and more attention. Influencer recommendations have caught on a new wave where it is combined with social media stars which are driving high engagement. Word of mouth has been traditionally trusted to be the most reliable source to translate awareness to considerations and when we raise it to the power of social media, influencer marketing definitely has the right ingredients to build a powerhouse.

According to Statista, active social networking users in India are projected to be over 400 million in the year 2021. India is the second-largest online market behind China, globally. A large chunk of online consumers are using Internet primarily for accessing social media networks and streaming OTT content. Based on current trends, the outlook for influencer marketing is extremely positive as 92% of consumers believed that influencer marketing was an effective form of marketing. Currently, Influencer marketing in India is estimated at $75-$150 million annually and it is poised to grow bigger as we see the transition from mainstream advertising to innovative ways of reaching out to the end audience. With the stakes getting higher, ASCI has framed welcome guidelines to ensure transparency and thereby increase credibility for influencers’ content.

Global Trends

Influencer marketing has exploded across the globe in recent years, with market size increasing from $6.0 billion in 2020 to a projected $24.1 billion by 2025 clocking a CAGR of 32%! Present trends show that influencer marketing is only going to increase as people spend less time watching traditional TV and spend more time on OTT & social media.

In the U.S., the Federal Trade Commission (FTC) regulates influencer marketing as part of consumer protection and advertisement regulations. As a precursor to influencer marketing regulations, the FTC established endorsement guidelines a decade back. These guidelines require that advertisers/endorsers must disclose their connections such that the endorsement disclosure is easily findable and understandable. In 2017 the FTC released expanded endorsement guidance for influencer content. The guidance was about “clear and conspicuous disclosures” of connections between advertisers and influencers followed by “Disclosures 101 for Social Media Influencers” in Nov’2019. FTC clearly advises that a clear and conspicuous disclosure for a YouTube video would be in the video itself, apart from the description section. Similarly, Instagram posts, Stories, Tweets should mention #ad or disclosure. Even video game streamers are advised to keep disclosure throughout the stream.

Moving closer to Europe in the UK, CAP along with CMA had published the first edition of influencer guidance in Sep’18 which clearly outlines relevant rules and how to make it explicitly clear “ads are ads” along with responsibility for respective stakeholders. This was followed by updated guidance towards Dec’20 with additional inputs and a revised edition. Governing body has also provided resources to guide brands, influencers as well as end consumers to effectively provide directions. Overall guidance boils down to the fact that if a brand has any level of input or editorial control over what influencer posts ― this constitutes an advertisement and must comply with the local influencer code. Similar trends could be seen across Europe as well as South-East Asia. Let's dive into specifics.

Details, Details, Details!

What can be seen is that extra scrutiny is placed on influencer marketing for misleading and deceptive content. Generally, there are three parties who contribute to an influencer marketing content: the influencer, the company and the agencies/ platforms that facilitate the agreement. So, when regulations are not met ― who is liable? The answer is all of them.

Right now, the key guidance when working with influencers anywhere are: firstly, content should adhere to local and traditional advertising laws. Secondly, a common person ― one not familiar with influencer marketing ― needs to understand that there’s a commercial connection between the influencer and the advertiser and if in fact, it is a paid-for partnership.

ASCI Guidelines

ACSI released draft guidelines in line with global standards focusing on transparency for the consumers who follow influencers.

1. Any kind of transaction (Money, discounts, paid trips, free products/merchandize) between an influencer and a brand for some type of content is considered as an advertisement.

2. The addition of a disclosure label is necessary, mentioning that the said piece of content is a paid promotion.

3. If an influencer makes any specific claims, the associated brand must provide facts to support the claim.

The main rule that we need to follow is to “DISCLOSE an AD as an AD”. Influencer, content creators, Publishing account must disclose the content to be an Ad upfront using the label #Ad #Collab #Promo #Sponsored #Partnership to ensure transparency, accountability which will help in building long-term credibility and trust. Essentially, it boils down to being honest in communication for each content piece.

Guidelines:

1. A brand promo content must be made distinguishable by adding the tags approved by ASCI board upfront

2. The disclosure tag must be made upfront within the first 2 lines of the caption so that the user won’t miss it or must scroll

3. Label must be in English or the language that the post is in and must be easily understandable by the user

4. Disclosing the labels in another page or Bio is not allowed as the users might see the individual post and not the profile or the links

5. If it is only a picture post (No Caption), then the labels must be put up in the picture itself

6. Videos must also have the tag (Very visible) for at least 2 sec for a 15 sec video or 1/3 rd of the total time of the video for longer. Live streams must have the tag for at least 5 sec after every 1 minute

7. For Auto media, tags to be announced at the beginning and the end of the video

8. Filters must not be applied to the post for the products that exaggerate the effect of the product or services

9. Creators must do their part carefully or thoroughly for products with technical performance. They should mention about the closeness to the advertiser confirming a specific claim

10. It is recommended that the contract signed includes filters, disclosure, and the due diligence

When To Include The Labels?

1. When influencers post an ad for the product, service, event, contest, or prize run by the creators themselves?

2. When influencers have received or will receive payment or barter for promoting a product, service, or brand in this post

3. When any discount code or hyperlink is included whereby influencers get a commission on clicks or sales generated via this link or code?

4. When the post has any brand commissioned or authorized this communication?

5. When influencers have or will you receive a free product, service, incentive, hospitality, free trip, discounts or any other benefits for making this post?

Impact & Way Forward

Broadly speaking, said guidelines (To be implemented from 15th Apr 2021) can potentially have 3 pronged impact as outlined under:

1. Trust: Transparency is a key enabler to build trust and these guidelines have the potential to significantly improve the communication with clear demarcation of sponsored and regular content creation. What we envisage is that with transparent communication as well as lower over-the-top communication owing to guidelines, it’ll help build more credibility for influencers and brands alike

2. Declutter: With clear communication of their brand associations, influencers will also be selective about the range of brands being promoted by them as they won’t like to have sponsored post fatigue among their audience

3. Impact: Improved trust as well as engaging content will potentially lead to increase in impact of influencer marketing. As can be clearly seen among the Late Millennials as well as GenZ, they would rather trust openness than opaque communication. This will directly increase the impact of influencer marketing

While we do have benefits as mentioned above, effective implementation of guidelines is what remains to be seen. We have seen in guidelines that onus shall be on originator of the sponsored content but enforceability certainly is a question. Overall, ASCI guidelines are a welcome step and they will guide brands, influencers, and agencies/ platforms to be more responsible which, in turn, will help consumers make the right choices while making the decisions. We believe that ASCI guidelines will definitely help Influencer marketing become an integral part of brand marketer's stack.

The author is Ritesh Ujjwal, Cofounder & CEO, Kofluence