Govt cracks down on misleading ads: A boon for consumers, a bane for advertisers

New Delhi: On June 3, an evening notification from the Ministry of Information and Broadcasting (MIB) rattled the advertising and marketing industry. In compliance with a Supreme Court order, the MIB has mandated that all advertisers, whether brands or agencies, submit a 'Self-Declaration Certificate' before publishing or broadcasting any advertisements starting June 18, 2024.

This new requirement has sparked a debate within the industry. Some argue that it is a necessary measure to curb the proliferation of misleading advertisements. Others, however, express concerns that it will increase advertising costs and complicate existing processes.

Shaadi.com founder Anupam Mittal took to X (formerly Twitter) to voice his criticism regarding the Supreme Court's mandated self-declaration certificate for advertisers. Mittal expressed concern about the burden this would place on digital advertisers, who often produce hundreds of ads monthly. He argued that this regulation would hinder the industry's global competitiveness by increasing costs and slowing down operations.

This is completely unviable. https://t.co/0iC65sbNew@MIB_India How will digital advertisers who create 100s of creatives a month comply with a directive like that? This will hurt our digital competitiveness globally by increasing costs and slowing us down 🥲

— Anupam Mittal (@AnupamMittal) June 4, 2024

 The Advertising Standards Council of India's (ASCI) 2024 report painted a concerning picture, revealing a significant increase in ad violations across various sectors. From betting companies to tobacco and health brands, the report flagged misleading claims as a major issue. This, coupled with the recent Patanjali controversy, likely spurred the Supreme Court to take action.

However, Manisha Kapoor, CEO of ASCI, believes that the vast number of creatives requiring certification will necessitate significant preparation for advertisers, agencies, and media owners.  

“Given the vast number of creatives that now need certification, this is a challenge that advertisers, agencies, and media owners will need to gear up for,” she said. 

Even Lloyd Mathias, an angel investor, business leader, and brand consultant, warned against excessive censorship on social media, which could increase regulatory burdens. “The more you talk about governing social media, then there's an issue of excessive censorship. And that will also increase the regulatory burden enormously.” Reflecting on how effective the entire process can turn out to be as one looks at the progress over a course of time, “The extent of compliance of the number of advertisers who, despite putting this declaration, still go on to make wrong claims, and how those are handled, I think that will be the critical factor.”

Last month, the Indian Society of Advertisers (ISA) and the Digital News Publishers Association (DNPA) reached out to the Ministry of Information and Broadcasting (MIB) to request a meeting. They aim to discuss the challenges of uploading self-declaration certificates (SDCs) on the Broadcast Seva and PCI portals, especially considering the high volume of advertisements produced daily.

The certificate submission process also requires the representative signing the declaration to provide their mobile number, email address, a detailed description of the product or service, the full script of the ad, a link to the audio/visual element or a PDF for print ads, and the proposed date of broadcast or publication, making the process further cumbersome. 

But "the industry, having been part of it myself, is often reluctant to adopt additional steps," is what Shweta Purandare, Advertising compliance expert - Founder, Tap-a-Gain, (formerly, ASCI Secretary General), thinks. 

Purandare emphasised the simplicity of the new system: "It's not pre-approval; it's just self-declaration. It's a small step with big benefits for consumers. Fly-by-night advertisers will be more cautious, and illegal offshore ads will face scrutiny, holding publishers accountable."

Interestingly, the other side of the Supreme Court's decision is about the effect on consumers. 

There are industry experts who reflect on how empowering this move could be when it comes to regulating advertisers. Notably, 20% of the complaints in the ASCI report came from consumers. 

Nisha Sampath (brand consultant) believes, "Strong corporate governance could make self-regulation a reality for businesses. Otherwise, excessive regulations can stifle creative communication.” 

She also asserted that approvals shouldn't solely rest with marketing managers; board-level involvement is crucial.
The onus now falls on brands to ensure their advertising is truthful and reliable. 

Piali Dasgupta, a marketing and communication leader, criticised scenarios of large-scale marketing of products that are very vulnerable to being wrongly advertised, such as the heavy ad investments of tobacco or betting companies for IPL. 

"This is why stricter regulations, like those potentially coming from the Supreme Court, are necessary and ultimately good for the advertising industry.” Adding further to her opinion, she said, "Ultimately, brands exist because of consumers and doing right by the consumers comes before anything else. Hence transparency is required."

Nearly half of the advertisements telecast during the last 17 matches of the Cricket World Cup 2023 were surrogate promotions of smokeless tobacco brands, according to a study that has called for a complete ban on promoting tobacco products in all sports. 

According to TAM research, Pan Masala brands topped IPL 16 and 17 in terms of ad volumes. The recently concluded Indian Premier League also witnessed the rise of illegal gambling and offshore betting. 

The vastness of social media presents a unique challenge. Tracking the credibility of information disseminated on these platforms is a constant struggle. However, Sampath suggested a solution: "More consumer-driven communities like @foodpharma on Instagram can empower consumers to regulate content."

According to Ashish Tiwari, CMO of Home Credit, "Say right, do right, and there'll be no reason for hassles."
"Brands are built in the consumer's mind, not just in the market. When one brand deceives consumers, it reflects poorly on the entire industry,” he added.

Advertising veteran Ramesh Narayan emphasised the evolving expectations of consumers, particularly younger generations. "They go beyond product attributes; they care about social responsibility, environmental practices, and ethical sourcing." Thus, balancing regulation with freedom of expression stood out as a crucial element. 

ASCI’s efforts towards addressing ad violations have been significant in terms of preaching the corrective measures. However, the industry’s focus on cautionary measures over preventive measures will direct the steps ahead.

To do this, Purandare underscored the need for stronger enforcement: "So one of my Youtube videos was put down by ASCI for violation, even though my videos are the kind with lengthy disclaimers. But violations still remain on platforms like Instagram, where an influencer is putting out about 50 videos on average in a year, promoting brands with the least awareness and zero disclaimers." 
The effectiveness of this new system will depend on several factors when put under scrutiny for all the pros and cons it brings.

How many advertisers continue to make false claims despite the declaration? How will these violations be handled? Will social media platforms be held more accountable for verifying advertiser claims? The majority of industry experts believe that the Supreme Court’s decision is the least advertisers can take care of in the current scenario instead of making grave mistakes. At the very least, it shall discourage violations by instilling a sense of fear in cross-checking content before putting it out. But truly cleaning up the advertising landscape in India will need more than just self-declaration, and that is something the industry needs to watch out for.

MIB has introduced a new feature on the Broadcast Seva Portal of the Ministry of Information and Broadcasting (MIB) for TV and radio advertisements and on the Press Council of India’s portal for print and digital/internet advertisements. The certificate, signed by an authorised representative of the advertiser/advertising agency, needs to be submitted through these portals.
The portal was activated on June 4, 2024. The Self-Declaration Certificate is required to be obtained by all advertisers and advertising agencies for all new advertisements that will be issued/telecast/aired/published on or after June 18, 2024. 

A buffer period of two weeks has been kept to provide sufficient time for all stakeholders to familiarise themselves with the process of self-certification. Ongoing advertisements do not require self-certification.