D2C brands take direct hit, influencer agencies ‘not fully aware’ of self-declaration certificate mechanism

While the influencer marketing agencies are still grappling with the SDC mechanism, not entirely aware of the Order; direct-to-consumer brands have been significantly impacted on the front of user-generated content and daily creatives.

By  Akanksha NagarJun 20, 2024 9:05 AM
D2C brands take direct hit, influencer agencies ‘not fully aware’ of self-declaration certificate mechanism
Influencer marketing as a category is yet to be fully aware of the implications of a 'self-declaration certificate'. Soon, they will need to integrate this new compliance step into their workflow processes, which will increase the administrative workload and potentially slow down campaign rollouts. (Photo: Unsplash)

The ‘self-declaration certificate’ (SDC) directive by the Supreme Court of India to curb misleading ads has left a mark on the advertising industry. Over the past two weeks, the industry as a whole has been bewildered, with each stakeholder unsure of whether and how to proceed with publishing an advertisement.

While for print, radio, and TV advertisers it is a challenge and a task to upload a SDC for each ad, it is double the challenge for digital advertisers — especially for the D2C brands who significantly rely on user-generated content (UGC), and influencer marketing ecosystem.

They have seen almost no representation in the last two weeks.

Digital-native brands typically have far too many creatives to manually manage the size, and their creative materials are constantly created on the spot. For these campaigns and creatives to remain compliant over time, automation and API level integration are also necessary, said one of the experts.

“A significant portion of the country's overall advertising spend is digital, encompassing social media, display ads, paid search, videos, content, and influencer marketing, among others. Digital advertising also involves multiple creative versions, self-serve ad platforms, dynamic advertising, real-time events marketing, and influencers who act as both ‘content’ and ‘media’,” highlighted Chetan Asher, Founder and CEO, Tonic Worldwide.

In light of the SDC mandate, the agencies currently lack definitive answers on how to proceed with these complex elements. D2C brands, which are heavily skewed towards digital, will require additional time and effort to ensure compliance compared to those more focused on traditional media, he added.

D2C brands, Sumon K Chakrabarti, CEO and Co- Founder, Buffalo Soldiers added, will be forced to improve their planning cycle. But the move will definitely impact UGC ads. "It has to be pre-planned, vetted more times than before," he noted.

UGC ads are advertisements that feature content created by users rather than the brand itself. It comes in any form, including customer reviews, social media posts, photos, videos, and other content consumers create that highlights their experiences with a brand or product.

Despite the difficulties posed by the frequent and iterative nature of digital advertising, Prateek Sethi, founder of TRIP, noted that digital-first businesses (D2Cs) are handling compliance well for now. It will be interesting to see how various companies will figure out how to comply with the new rules.

Impact on influencer marketing ecosystem

The Ministry of Information and Broadcasting met with industry stakeholders who raised their concerns, on June 11. Chaired by MIB Secretary Sanjay Jaju, the meeting saw the participation of representatives from the Indian Broadcasting and Digital Foundation, Advertising Standards Council of India, Digital News Publishers of India (DNPA), Google and senior media executives.

While it was a closed-door meeting, as per the sources, there was no influencer marketing representation during the meeting or otherwise.

Experts believe that the influencer marketing ecosystem is not yet fully aware of the purview. The Press Council of India portal shows hardly any certificates submitted in the name of influencer marketing activity, except for the brands including Kelloggs India, Rummy Circle, and Samsung, among a few others.

“I don’t think it will have an immediate impact on influencer marketing. It’s a huge category where there is an already a buzz around how to ensure credibility. I do not think this category is yet aware of the implications of this. But influencer agencies will need to integrate this new compliance step into their workflows. This includes preparing and submitting detailed documentation, such as the full script and actual video/audio files of advertisements, along with the self-declaration certificate,” said Chakrabarti.

“However, these processes could increase the administrative workload and potentially slow down campaign rollouts,” he cautioned.

Slowly, but surely, influencer marketing agencies might face greater scrutiny, especially since the guidelines explicitly aim to prevent misleading advertisements. This might require agencies to be more diligent in verifying claims made in advertisements, thereby affecting how they plan and execute their campaigns.

“In general, there does not seem to be a high level of awareness yet in that space - most of them are expecting brand agencies or clients to pick up the responsibilities. But in the next few weeks the awareness will grow,” highlighted Siddharth Devnani, Co-founder & Director, SoCheers.

The agency is doing its bit to educate the ecosystem with what it understands. As influencer marketing space still grapples with how to handle the SDC, Vishal Agrahari, AVP Media, BC Webwise, noted that influencers may need to collaborate with brands to obtain the certificate, potentially increasing the workload for both parties.

The silver lining is that the mandate to upload SDC will force creative teams across the funnel to think more and flesh out campaigns more.

“It will also help cut out the unending flow of half-hearted campaigns that we see these days,” Chakrabarti concluded.

First Published on Jun 20, 2024 8:56 AM

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