Sponsored content, yes or no? Most influencers don’t say

India’s advertising industry watchdog has found that the majority of social media influencers lack transparency in disclosing brand partnerships, failing to meet the guidlines aimed at protecting consumer interest.

As many as 69 of the top 100 content creators fail to comply with disclosure guidelines for brand partnerships, according to an investigation by the Advertising Standards Council of India (ASCI). More than half didn't make any sponsorship disclosures, while a little less than half of the creators hid them. 

If so many creators “are not compliant with the law, either through absence of disclosures or by improper placement of disclosures then that by itself is a worrying problem”, said Manisha Kapoor, secretary general of ASCI.

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“These influencers are at the top of their game, they have a lot of influence, they reach a large audience and are working with so many brands. The rest of the ecosystem looks up to these influencers,” Kapoor said. “If they don’t do things right, that brings down the overall credibility of the influencer marketing network.”

India’s influencer economy has grown threefold in the past five years to become a ₹55 billion industry, Mint reported last week citing a Qoruz report.

Compliance gaps

ASCI scanned through the Instagram and YouTube posts of influencers that appeared in Forbe’s list of ‘India’s Top 100 digital stars’, according to its ‘Top influencers compliance scorecard.’ Of their posts between September and November 2024, the watchdog picked one each that appeared to be in violation of ASCI and Central Consumer Protection Authority’s guidelines to use clear labels in posts to signal any material connections with brands.

“This study aims to highlight the compliance gaps which ultimately harm consumer interests. Lack of such transparency makes it difficult for consumers to trust online marketplaces,” the report said. “It is essential for all stakeholders including platforms to come together to drive better compliance on this issue.”

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Of the sample of 100 posts, 69 did not declare their associations with the brand while promoting the products properly. 56.8% made no disclosures at all about their brand affiliations, while 43.2% hid these sponsorship disclosures, deceiving followers into believing the content is unbiased.

ASCI also found that the fashion and lifestyle brand promotions lead to 27.5% violations, followed by telecom (21.7%) and personal care products (13%).

After the watchdog’s nudge, out the 69 non-compliant cases, 59 complied without contest, and four labelled their posts after ASCI’s jury recommended. Five cases were escalated to the ministry of information and broadcasting for further action, highlighting a significant integrity issue in influencer marketing. In one case, ASCI still awaits compliance.

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