D2C brands flouting ad rules with spree of violations; Brands putting their reputation at risk
Manisha Kapoor, CEO and Secretary-General, ASCI, says, "We have seen several D2C brands stumble and take a beating when there are repeated advertising violations, as this is symptomatic of a deeper compliance issue within these organizations."
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In a recent report by the ASCI, a total of 187 advertisements of Honasa Consumer were flagged by the industry body for ad violations. These ads included many of its brands – Mamaearth, Dr. Sheth’s Skin and Hair Clinic, Aqualogica, The Derma Co., Ayuga, among others. The company then told Storyboard18 that "almost 94% of these flagged cases were around influencer content, whose dynamics have been rapidly evolving and it has enhanced the internal protocols to comply with standards", adding that it has been its constant endeavour to educate itself and its partners on the guidelines defined by ASCI and be completely compliant with them. It also mentioned enhancing its internal protocols to ensure minimising the same. “We are committed to complying with industry standards and maintaining the trust of our customers, which is of paramount importance to us,” it said.
While addressing why D2C brands are big ad code violators, Manisha Kapoor, CEO and Secretary-General, ASCI says, "D2C brands in India, are usually in the startup or rapid expansion phase when they start advertising. Typically, their focus is on rapid acquisition of customers as they wish to show high valuations. In some cases, this takes priority over meeting regulatory requirements. Many D2C brands may also not have full- fledged marketing or legal expertise in-house, who can sensitize them on such matters. In their rush to get into the market, there is a high chance that they ignore basics of advertising compliance."
"D2C brands may have limited checks and balances, internal procedures due to small teams and limited resources. However, this is not a valid reason to be in violation of codes and laws related to advertising," she further says.
It is important that brands are able to balance both growth and compliance and make sure they stay on the right side of regulations, says the industry body's chief. The onus lies with D2C brands to comply with advertising regulations.
"What they need to realise is that they are taking a huge risk with the reputation of their brands when it comes to violation of advertising ethics and laws. Investors too should rightfully be wary of such businesses because this may suggest a larger compliance issue and a culture where ethics are not taken seriously. We have seen several D2C brands stumble and take a beating when there are repeated advertising violations, as this is symptomatic of a deeper compliance issue within these organizations," she added.
ASCI’s recent certification course - ASCI Guide to Responsible Advertising”, is one of the offerings of the ASCI Academy that can help small brands and startups achieve ethical advertising standards and compliance with ASCI code and various regulations. Arming themselves with the right knowledge can support businesses that wish to be on the right side of the law.
