January 27, 2023

“Endorsement Know-How” - New Consumer Affair Guideline Social Media Influencers/Celebrities Must Know

5 min read

Endorsement Know-how is the new consumer affair guideline for celebrities and social media influencers who regularly get sponsorship or do paid collaborations with brands. The guideline is developed on the premise that content creators or celebrities have massive social media following and can have an impact on the purchasing decision of their followers. 

Therefore, for greater accountability and transparency, all social media posts, whether in the form of video or static images, should clearly capture the “material connection” between the influencer and the advertisers. 

What does material connection include?

As per the released guideline, material connection includes the following incentives and benefits, although not limited to these -

  • Any form of monetary or other compensation 
  • Receiving any kind of free product/service/samples with or without condition
  • Benefits received in the form of unsolicited gifts, discount coupons etc included 
  • Trips and hotel stays
  • Contest and sweepstakes entries to be included 
  • Any family, personal, or employment connection to be revealed 
  • Coverage, awards and media barters should also be included 

Who needs to disclose the material connection?

The endorsement know-how is applicable to the following entities -

Celebrities - Film/Tv actors, sports personalities, in short anyone with a massive following who has the power to influence purchasing or buying decision

Social influencers - All categories of social media influencers and content creators across platforms

Virtual influencers - AI-generated avatars or fictional characters who have realistic characteristics as humans are also included 

How to disclose?

The guideline has clearly laid out the rules regarding the disclosure of the material connection. Here are some examples -

  • It should be hard to miss - The disclosure should be direct, prompt and extremely hard to miss and it should be mixed with a group of hashtags.
  • In the case of a picture - If the endorsement is in the form of a picture or static image, the disclosure should be superimposed, enough for the audience not to miss.
  • In the case of video content- The disclosure should be made in the video and now just in the description and should be present in both audio and video format. 
  • Disclosure applicable to Live stream as well - Disclosure should be displayed throughout the entire duration of the live stream in the form of a runner.

What should be the tone of the disclosure?

  • Simple and clear language should be used.
  • On platforms like Twitter where usage of word count is limited, terms like xyzambassador (where xyz is the brand) are acceptable.
  • The language of the disclosure should be the same as the endorsement. For example, if the endorsement is in Telugu language, the disclosure should also be made in Telugu.
  • Terms like advertisement, ad, paid, paid promotion, and sponsored are acceptable.
  • Separate disclosures shall be made apart from platform disclosure tools.

Fine Imposition 

Upon failure of disclosure, a fine of 10 lakhs will be imposed,  for any subsequent offense, the fine will increase to 50 lakhs. 

How will the new Guideline change the scope of Paid sponsorship?

  • It will promote diligence 
  • There will be more displays of accountability 
  • Will give the opportunity for the endorsers to review the claims put forth by the advertisers 
  • The followers will be able to make informed decisions about the purchases
  • There will be greater transparency, which in turn will improve the trust factor
  • Content creation ideas in all forms will have to have a higher level of transparency

Concluding thoughts -

Social media marketing, especially the influencer marketing space is highly lucrative. Content posted on social media platforms is at an all-time high. Advertisers are using this space to promote their products and services extensively. 

While it is a great promotion platform, it can at times lead to false advertising. Sometimes these promotions also carry an element of bias. To eliminate this and improve the quality of social media advertising and content creation the new “Endorsement Know-How” guideline will help take consumer confidence to a far greater level.

Kamna Datt
Content Writer
A content writer by profession, Kamna is an Influencer marketing enthusiast writing insightful articles about the space that will benefit brands and influencers alike!