Using regulation to rescue consumers

If you’ve noticed an avalanche of spam on your X (formerly called Twitter) timeline in recent days, it is because blue-tick content creators are on overdrive, having received their first cheques from the social media platform’s new revenue sharing feature. X opened the scheme to qualified content creators worldwide last month, enabling them to earn money from ads displayed on their posts and profiles. This opened the floodgates: Mixed in with genuine information and analysis, there has been a surge of clickbaity content and influencer advertising, making it quite a morass of fantastic stories, unrefereed claims and pseudo-scientific trash.

Undisclosed influencer content is rampant on all social media. Designed to manipulate consumer desires, fears and needs, it works at an insidious level, which makes it a potent instrument to spread misleading information. Consumers find it harder to discern influencer content, because the social media platforms have no mandatory disclosure rules, nor do they employ clear markers. In conventional media, it is the practice to clearly flag and separate paid content such that the consumer knows that he or she is receiving a commercial stimulus. Consumer ethics would demand that similar devices be employed by social media platforms too.

The influencer marketing industry in India is still in infancy, valued at about Rs 2,000 crore, but growing at the rate of 25 per cent per year. But its influence on adoptive behaviour is much greater than old media advertising. Surveys have shown that 78 per cent of Indian social media users say they are quite likely to base their buying decisions on influencer content. In particular, influencer content has the greatest impact on GenZ and millennials, those born after 1981. About 40 per cent of them say they trust the subject expertise of influencers but only 25 per cent say they trust celebrities and famous personalities.

Given this reach, potency and future growth, there is every need to regulate influencer advertising better, at least on par with the standards set for conventional media. However, regulatory oversight has been lagging when it comes to social media in general, and influencer content in particular. The possibility of misuse and the potential for adverse consequences are much greater in a social media context because content creation is largely non-institutional and its consumption occurs in conditions of total privacy. For that reason, adverse outcomes are rarely reported, and harder to monitor. It is welcome therefore that the Advertising Standards Council of India (ASCI) recently expanded its oversight of celebrity advertising, by defining celebrities as any individual with more than half a million social media followers. This will bring many more influencers into the ambit of regulation. ASCI took this step after there was a 800% spike in violations of norms by influencers and celebrities on social media platforms. ASCI guidelines require these ‘celebrities’ to back up their product recos with their own knowledge or experience. They must also conduct due diligence to substantiate their claims. This step may not end the menace of misleading information altogether but will serve to lay down the tramlines for the influence industry. In future, analytics of the influence phenomenon can be studied to make regulation more focused and efficient. Also,  this move by ASCI can serve as a poke to other regulators such as the FSSAI, the Drugs Controller and the Sebi to follow its example of expanding the scope and efficiency of their own norms to bring some accountability to the influence industry.