Skip to content
Stars may need to think twice before endorsing a brand. On Friday, the Indian government’s Department of Consumer Affairs shared guidelines outlining celebrities’ duty of care when endorsing brands.
For the advertising industry, regulators and consumers in general, who struggle with misleading claims made by brands, the guidelines offer promise and hope, experts say.
Surely, this isn’t the first time celebrity endorsements have taken the spotlight. In 2019, the government enacted the Consumer Protection Act to hold celebrities liable for their endorsements. The law, which set up a Central Consumer Protection Agency (CCPA) to regulate matters, imposed harsh penalties – ranging from a fine of 10 to 50 rupees to five years in prison – for those who made false claims. It has also tried to bar a celebrity from endorsing a product for up to one year, and extend it to three years for repeat violations.
However, misleading ads and claims from celebrity endorsers continue unabated, according to a recent study by community social media platform LocalCircles. At least two in three (or 70 percent) of those surveyed said they had encountered misleading advertising in the past 24 months amid the Covid-19 pandemic. The survey received 33,000 responses from consumers in 312 counties across the country.
“This is a step in the right direction,” said Sandeep Goyal, managing director of advertising agency Rediffusion. “However, if one celebrity is penalized for making false and misleading claims, then that would act as a strong deterrent to the rest,” he says.
The new guidelines indicate that any recommendation must reflect the true, reasonably current opinion of the person, group or organization making the representation and must, and need not otherwise, be based on reasonable information or experience with the goods, products or services identified To deceive.
Celebrity management companies are predictably unhappy with the new guidelines, arguing that it is not appropriate to hold celebrities accountable for misleading claims as it is the brand’s maker who created the ad.
“I’m not saying celebrities shouldn’t do due diligence before getting endorsement. But blaming them for the misleading claim is not correct,” said the CEO of a popular Mumbai-based celebrity management firm. Given the sensitivity of the matter, he declined to be quoted.
But the Advertising Standards Council of India (ASCI), the sector’s regulator, says it’s time to look into misleading claims across all categories.
“The issued guidelines align fairly well with the prevailing ASCI code for misleading advertising. ASCI will remain committed and offer its support and expertise to the government in the area of consumer protection. It is important that diverse stakeholders work together in a collaborative and streamlined manner to address the problem of misleading advertising, especially in the dynamic digital advertising environment,” said Manisha Kapoor, Chief Executive Officer and Secretary General of ASCI.
Shweta Purandare, an advertising compliance expert and former ASCI general secretary, felt the guidelines would curb not only celebrity endorsers but also social media influencers.
“I see trademark endorsements being shaken and stirred with these government guidelines. ASCI is a self-regulatory body and has limitations on the scope of its work. As the government steps in with these guidelines, both endorsers and social media influencers will be cautious about endorsing a brand,” she said.
The importance of celebrity endorsements has only increased in recent years, particularly during the Covid-19 pandemic, as brands have sought trusted names and faces that can communicate their message effectively.
According to a recent report by AdEx India, a division of TAM Media Research, celebrity endorsements saw a 44 percent growth in 2021 compared to 2020. In terms of share of advertising volume on TV, 27 percent in 2021 was made up of celebrities off, according to the report. Of these, movie stars combined accounted for more than 80 percent of advertising in 2021, followed by athletes and TV stars, adding 13 percent and 3 percent share, respectively.