The crisis of identity has forever been at the core of human struggle. French philosopher Michael Foucault suggests that a person’s identity shifts with situations, terming the relation with oneself as subjective. The modern world has witnessed one such mass transition of identity when regular folks became influencers – a word that is currently associated with an amusing curiosity. Now, some of these next-door-friendly faces are going to metamorphose into celebrities. But this comes at a cost.
A staple for most marketers today, influencer marketing is raking in 10-15% of Digital ad spends on an average. The number is representative of their increasing faith in this new and highly popular class of brand advocates, who sometimes rank higher than celebrities on the consumer trust scale. A spanner in the works, however, is this data point from ASCI, according to which, 1 in every 4 ads in the first half of 2023 had an influencer violation. At the same time influencers are endorsing brands by the dozen as their popularity spreads like fire.
As the lines between influencers and celebrities get blurred, ASCI finds the need for increased scrutiny. The move has brought them directly under the ambit of the Consumer Protection Act. Finance and health influencers are now required to get registered with SEBI (for finance) or IRDAI (for health) and have relevant qualifications.
In another universe, the ‘original celebrities’ are also facing the heat for their purported choice of advertisements. On one hand actor Ranbir Kapoor has been summoned by the Enforcement Directorate, for allegedly promoting controversial betting app Mahadev, while on the other, The Confederation of All India Traders (CAIT) and All India Mobile Retailers Association AIMRA) has filed a complaint with the Central Consumer Protection Authority (CCPA) against a Flipkart ad featuring Amitabh Bachchan, calling it misleading.
While the regulations and mandates are embraced by all stakeholders,the ripple effects that they will have could put more pressure on marketers who broke away from the cycle of ‘celebrities’ to present a more authentic side of their brands through influencers. There are added complexities with brands, agencies, and creators anticipating possible scenarios like price hikes and algorithmic complexities downplaying paid promotions.
TIGHTENING THE GRIP
In May 2021, ASCI issued guidelines for influencer advertising, stating that all paid partnerships or material barter between brands and influencers to endorse a product or service must be disclosed upfront to consumers. ASCI’s 2022-23 list of non-compliant influencers features Honasa Consumer (parent company of Mamaearth), Nykaa E-Retail, and Apple India as the top 3 brands with the highest number of non-compliant influencer collaborations. Some of the prominent names that engaged in these partnerships include Sonam Kapoor Ahuja, Janhvi Kapoor, Viraj Ghelani, and Ruhee Dosani, among others.
Acknowledging ASCI’s contribution to keeping advertisements fair, Rohit Kumar Singh, Secretary of the Department of Consumer Affairs, explains, “We have guidelines for misleading adverts and social media influencers. Those guidelines already exist, but we want people to self-regulate so that they don’t violate these guidelines and get caught in enforcement. They should say very clearly, whether they’re taking either money or any material benefits. I don’t want to be unnecessarily in their backyard, but if they cross the line, we have to be.”
Taking another step towards this goal, in August 2023, ASCI broadened the definition of celebrities in its code to include social media influencers with a large following. According to the self-regulatory body, an influencer earning more than 40 lakhs per annum from campaigns or advertisements, and with over 5 lakh followers, will now be considered a celebrity.
Manisha Kapoor, CEO & Secretary General, ASCI states, “Influencers belong to an entirely new category of ‘celebrityhood’. They are well-known, with some of them having a huge following. People rely deeply on the advice given by influencers, believing them as they would believe a celebrity.”
A WELCOME MOVE
According to Statista, the influencer marketing industry in the country was valued at over 12 billion INR in 2022. This number is expected to grow at a compound annual growth rate of 25 per cent in the next five years. The fact that influencers are today being leveraged for political and election campaigns leaves little doubt about their growing clout in the Digital marketing space. Given the scenario, all stakeholders agree that it is critically important to have some sort of regulation or oversight that can protect the interests of both brands as well as consumers.
Prashant Kohli, CMO, Wiggles says “Communication with a wider impact needs a certain kind of regulation, especially in strategic fields like finance and healthcare. It helps in reducing biased and unregulated information.”. Commenting on what the ‘celebrity’ statuses granted to Digital influencers changes, he adds, “While influencers would be very happy, this transition is an abstract concept, and the question of responsible content remains. You will not become a more responsible person if I start calling you a celebrity. Framing them in a certain way will not make a difference. You may just end up inflating the rates even more because now they are celebrities.”
Speaking of rates or charges for advertising, influencers are currently on the lower rung when it comes to charging money. However, this tag may give them the confidence to charge higher or equal rates. Juhi Mehta, Chief Operating Officer of Qyuki Digital Media speaks regarding budgets for campaigns from a brand perspective, and says, “It’s important to recognise that celebrities often bring a wider reach and credibility to campaigns. Brands need to weigh the benefits of working with celebrity influencers against their budgets and campaign goals. In some cases, it might still make sense to partner with micro or nano influencers for niche audiences.”
Danish Sait, Comedian and Creator mentions that the celebrity tag was not anticipated and that the guidelines are fair. “I think boundaries are important because it’s a new medium, it’s evolving. Restrictions are there, but you find different ways to work around them and still stay within boundaries. Brands are now trying to see how people can be engaged and informed about the product.” he says. On the other hand, Rida Tharana, Video Creator points out, “In the past, content creation didn’t necessitate such considerations, but with ads and content closely intertwined now, regulations are essential.” Neha Nagar (Filmy Finance), Content Creator states, “These regulations will help to ensure that influencers are held accountable for the information they share with their followers and that they are not promoting products or services that could be harmful to their health or finances.”
In addition to appreciating the need for regulation that comes with the celebrity tag, some creators also consider it as a much-needed validation for the industry.
Saloni Gaur, Comedian and Creator mentions, “The ‘celebrity’ label recognises the impact we have on our audience. Restrictions on health and finance endorsements are necessary.” Echoing a similar sentiment, Dharna Durga, Digital Creator adds, “It shows that people like me who make content online are getting noticed by the regulatory bodies, just like actors and sportspersons”.
Abhinay Yadav, Digital Creator, reckons, “The guidelines by ASCI have made content creation legitimate in society. Today a young child can proudly consider taking up content creation as a full-time job.”
On the other hand, Gautam Madhavan, CEO, Mad Influence thinks that there seems to be an ambiguity in this matter. He says that the tag should be based on categories, not followers. “It is a social advantage over an economic advantage. It is just a feel-good factor, much like how Bluetick was a big deal. Now anyone with 500, 000 followers thinks he or she is a celebrity. What matters is engagement.”
He further emphasises that having a celebrity tag does not give influencers the right to increase the price. “I can buy 500, 000 followers and become a celeb. Does that mean I can start charging five lakh rupees from tomorrow? No, that does not happen. This move will not have any impact because they are not paid on the basis of being a celeb or being verified. They are paid on the basis of their popularity and engagement.”
ENSURING COMPLIANCE
Besides the celebrity tag, ASCI has also streamlined a process for influencers from certain categories to legitimize themselves. The new regulations come with their own set of challenges. Influencers who are now called celebrities would need to adhere to a rigorous set of regulations and laws under the Consumer Protection Act. Registration with SEBI, IRDAI, and academic backgrounds in the fields of health, medicine, and nutrition would also mean intervention by more regulatory bodies in addition to ASCI.
Delving into the details, Manisha Kapoor shares that “several finance influencers who are not qualified chartered accountants can now go to SEBI and get authorised if they are in the financial advisory space or would like to be a professional. The process laid out by SEBI is similar to getting recognised by IRDAI. These are government statutory bodies that have a process of certifying people to be qualified to give such advice.”
“While an academic background is an absolute necessity in medicine, for areas like nutrition, which do not require a medical degree, some certification or course is required as they do touch upon health issues. The idea is that you should have done a course, degree, certification, or registration that qualifies you to speak as an expert,” she says.
Kapoor thinks that when someone is making money out of a profession, there needs to be a code of conduct, a set of etiquette and ethics to be followed. According to her, “Today, platforms make it easy for you to disclose your paid partnerships. A lot of content creators are now doing the disclosures, which is a positive trend.”
But influencers have a different take on the matter, as explained by Himani Chowdhary, Content Creator (Finance). Describing the SEBI registration process as ‘cumbersome,’ she says, “First, you must fulfil the eligibility criteria to take the relevant examination. Once you clear the exam, it’s time to contact SEBI or a consultancy firm to submit the documentation. After making sure that the basics like eligibility, work experience etc are in place, SEBI officials will audit all the videos of the influencer, and also ask them to delete some, if required. It takes a lot of time and patience. My registration is still a work in progress as I wait to finally get the registration number.”
Then comes the question of brands bearing the brunt of this lengthy process. According to Lakshmi Balasubramanian, CEO and Co-founder, Greenroom, “The immediate impact is that it would delay some of these campaigns and associations. This is because registration with these bodies or proving qualifications etc will take time.”
CHALLENGES - THE BRAND, THE AGENCY, THE CREATOR
Besides the complexity of the compliance procedures, influencers are highly concerned about a decline in consumer sentiment on seeing the ‘paid partnership’ tag, and also the ranking in the algorithm that may either rank down a post or reduce its reach. Balasubramanian helps us understand why the paid partnership tag may cause the reach to decline, “This is possibly because the platforms want to promote regular posts organically and push branded posts to money towards promoting branded content with a sharper targeting etc.”
From a user perspective, it certainly affects the likeability factor.
Siddhi Mahajankatti, Actor and influencer states, “One of the significant challenges that these changes bring is the requirement to include a ‘paid ads’ tag in our posts or reels. It alters the algorithm dynamics, resulting in considerably lower engagement and reach for those posts. Furthermore, this change can impact the overall engagement metrics on your profile as well.”
Nidhi Nagori, Content Creator (Finance) mentions, “The biggest challenge will be to convince the audience that the collaboration is in their best interest. At times when the audience sees that something is a paid collaboration, there is a dilution of trust. They immediately feel that it is not for them, or it’s not genuine, because it’s paid for”.
Sanjay Mehta, Joint CEO, Mirum India agrees that paid collaborations are ranked down by algorithms to some extent but “that’s the test of the real power of your brand as an influencer,” he says. “Do your followers connect with your brand despite the paid promotion tag? There was a time when your post would reach a massive number of followers. Now all that has changed because of various alterations. So now you have to pay media to reach your people, and that is a real change.”
It’s not just influencers who are affected by these guidelines, but also the talent agencies managing them. Ramya Ramachandran, Founder and CEO, Whoppl states, “The stipulations for health and finance influencers to demonstrate their credentials is an additional criterion that is to be introduced on our side. This entails verifying that influencers enlisted for brand activities hold the requisite certifications. Once this check is satisfied, we shall proceed to recommend these influencers to the concerned brands. This shift is unlikely to cause significant disruption, as it aligns with our established practices, particularly for the brands we are affiliated with. Consequently, our scrutiny of the alignment between influencers and specific brands or services will be heightened”.
Vinay Pillai, Senior Vice President – Clout, and Head of Strategy - Pocket Aces shares, “As influencers transform into celebrities, it might result in higher fees for prominent influencers, which could pose as a challenge for smaller brands with limited budgets, who might need to strategically target micro-influencers”. According to Digital-uncovered, India’s micro-influencers currently make anywhere between INR 5000 to INR 30000 per post.”
Influencer price hike remains a major concern on the brand’s side as the tag does not affect the engagement rate directly. Mohit Khattar, CEO, Graviss Foods - Baskin Robbins, agrees that influencers are increasingly becoming more expensive. “The outlays keep increasing, especially with some of the big ones. Apart from that, there is no challenge. We will still associate with influencers who bring value to our brand through the kind of followers and the quality of engagement they have to offer. However, I would not engage an influencer with poor-quality content even if s/he has a million followers.”
Saahil Nayar, CEO, Swiss Beauty has a similar criteria for influencer selection which emphasizes the quality of content. “If we are engaging with somebody who has 500k followers, they are usually at a macro level. Here the quality of content becomes key. People are sitting at 700K, walking the Cannes red carpet, but I don’t think that’s my criteria to choose the influencer”.
The other big concern, he points out, is that influencers are promoting several brands in the same category. “Today if I’m telling you that I love this product, I can’t love something else in the next two days. That is a problem. You started with Coke, but say that you have Pepsi, and then your pictures show Thums up, while you’re drinking Sprite. They need to trim down or expand their categories unless they have a core speciality,” insists Nayar.
Anurag Iyer, CEO, BigBang. Social looks at ‘celebrities’ as another categorisation within the influencer realm - nano, micro, mega, and now, celebrity influencers. “This may lead to a possible price hike and further distinction in terms of ‘who charges what’,” he says.
The true value an influencer provides and the relation to its audience size has been a digital dilemma, says Sahil Gupta, Lead - Influencer Marketing, Interactive Avenues. According to him, “Brands now emphasize data-driven assessments, favouring mid-sized influencers with robust engagement rates over high-profile figures. Emerging influencers offer better ROI, quicker results, and more seamless collaborations. However, gauging the true value that influencers bring remains a challenge. Brands’ attempts to exert creative control could compromise authenticity and narrative. Additionally, reluctance to engage with lesser-known influencers curbs brands from exploring new perspectives”.
Providing a possible solution to the issues at hand, Aahana Mehta, Director - Talent Partnerships, Pollen (Zoo Media) says, “Agencies will meticulously identify influencers in health and finance. Influencers on their part must disclose qualifications for credibility in these sectors, while uncertified ones can pivot into alternative content. They can share their opinions as a consumer vis-à-vis a subject matter expert. However, qualified influencers diversify effectively. Regarding norm adherence, the consensus is strong—reputable creators must uphold ASCI guidelines for industry integrity.”
Evolution Of Content Collaboration
Today, content collaborations have been altered to match consumer inclinations, and incoming regulations, as well as the power of influence.
Rida shares, “In my nearing three years of content creation, I’ve noticed a shift from the initial learning phase for both creators and brands to a more refined collaborative approach. Brands are increasingly open to our creative inputs within boundaries, showcasing a mutual learning curve”.
According to Nidhi, “Brands are now interested in working with creators who can create content that is aligned with their brand values and will resonate with their target audience,” she says.
Talking of the changing dynamics, Baskin Robbins’ Khattar adds, “While some influencers can be very rigid in terms of content, there are several others who are extremely flexible and collaborative. They like to contribute to the entire process.”
Amidst all of this debate, ASCI CEO Manisha Kapoor is of the opinion, “Creativity that is smart and responsible is the only sustainable creativity needed. You are not making a painting and hanging it in a gallery. You are doing commercial work; it is for a brand.”
