Storyboard18 | Decoding govt’s new guidelines on celebrity endorsements & surrogate ads

Clause 8 of the new guidelines says that ads for junk foods can no longer be shown during a program meant for children or on a channel meant exclusively for children, but it doesn't clearly state what comes under junk food. (Representational image)

The government’s latest guidelines prohibiting surrogate advertising and making it mandatory for celebrity endorsers to disclose even small stakes in the companies or brands advertised or featured in ads that target children has created quite a stir in the celeb endorsement space.

The Union Consumers Affairs Ministry notified ‘Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022’ is applicable to ads across all media platforms including television, print and online.

Similar guidelines by ASCI

However, this is not the first time the veracity of celebrity endorsement has been raised. The industry body Advertising Standards Council of India (ASCI) already has a set of similar guidelines when it comes to celebrity-led advertisements. For instance, ASCI released guidelines banning advertisement that 'depicts those with darker skin as being inferior in any way'; however, certain personal care brands continue to hinge their communication on 'fair is better' ploy.

But, with the government guidelines, the major difference now is that the guidelines are legally binding - and that their violation attracts penalties – which could be a major deterrent for possible defaulters.

The government has empowered the Central Consumer Protection Authority (CCPA) to impose a penalty of Rs 10 lakh to Rs 50 lakh on manufacturers, advertisers and endorsers for any misleading ads. The CCPA can also prohibit an endorser flouting the rules from making any endorsement for one to three years.

Tricky surrogate ads

There are potential loopholes in the new government guidelines, especially in the case of surrogate advertising. Clause 6 of the CCPA notification prohibits surrogate advertising, both direct and indirect. However, it does not define “brand extension”, which has been used by many advertisers to propagate a different product using the brand name that is otherwise not allowed to advertise, like in the case of tobacco and liquor.

Many liquor brands, for instance, have been using music CDs, short films, and big music festivals for promotions under brand extensions. Unlike ASCI which clearly defines Brand Extension and states “Brand Extension Product or Service should be registered with appropriate Government authority and must meet other requirements such as Rs 20 lakh turnover or presence in the market for two years”, the government guidelines made no such clarifications.

It is to be noted that although the new guidelines have banned surrogate advertising on non-conventional media platforms such as digital, influencer marketing and social media promotions by liquor companies continue to take place unabated. It will be interesting to see how the government cracks down on this segment. Celebrities such as Priyanka Chopra, Anushka Sharma, Amitabh Bachchan and Ranveer Singh have endorsed products like Rajnigandha Silver Pearls flavoured pan masala and Kamla pan masala which cannot be dubbed as 'surrogate ads'.

Junk food brands targeting kids

Another area of possible contention is Clause 8 of the new guidelines notification which states, “An advertisement for junk foods, including chips, carbonated beverages and such other snacks and drinks shall not be advertised during a program meant for children or on a channel meant exclusively for children.”

However, the notification doesn’t explain what is included in the junk food category. ASCI, on the other hand, in 2016 partnered with food regulator Food Safety and Standards Authority of India (FSSAI) had put forth clear guidelines that advertisements that by nature needed health warnings on their packaging or were not meant to be targeted towards minors should not feature personalities from the field of sports, music and cinema.

Lack of clarity on influencer marketing

Section 14 of the CCPA notification states that the celebrity endorsers need to disclose their material interest in the products that they endorse.

“Disclosure of material connection – Where there exists a connection between the endorser and the trader, manufacturer or advertiser of the endorsed product that might materially affect the value or credibility of the endorsement and the connection is not reasonably expected by the audience, such connection shall be fully disclosed in making the endorsement.”

There is no guideline on how these disclaimers should be made and whether social media influencers are also covered in these guidelines.

The consumer ministry along with regulator ASCI have a mammoth task to comb through possible celebrity-led misleading ads and find defaulters as celeb endorsements form a major chunk in brand promotions.

To be sure, celebrity endorsements witnessed a 44 percent rise in 2021 compared to 2020, according to the data released by AdEx India, a division of TAM Media Research. As per the report, 27 percent of the overall ad volume share on TV were celebrity endorsements last year while the remaining 73 percent were non-celebrities ads. Of this, film stars together added more than 80 percent share of advertising during 2021 followed by sports persons and TV stars that added 13 percent and 3 percent share, respectively.