Relief for advertisers as MIB restricts SDC to advertising in food and health sectors only

In amending its mandate, which came into effect on June 18 and required a “self-declaration certificate” for every advertisement on television, print, radio and digital media, the Ministry of Information and Broadcasting (MIB) has given advertising a major reprieve by limiting SDCs to food and health ads only. Not only is the mechanism limited to these two sectors, but the mandate for “every advertisement” has now been changed to “annual SDC.”

Storyboard18 was the first to report the news.

The latest warning comes after the ministry held a meeting with industry representatives on June 25, including large technology platforms, broadcasters, Indian Association of Advertisers (ISA), Digital News Publishers Association (DNPA) and others, where a suggestion was accepted to limit the requirement to only the food and health sectors and the need for a “one-time certification” was also discussed.

Of course, in line with the MIB warning of 3 July, which replaces previous warnings regarding self-declaration certificate requirements, advertisers/advertising agencies advertising products and services related to the food and health sector should upload the annual self-declaration certificate to the above-mentioned portals, where applicable, and share proof of uploading the self-declaration with relevant media entities such as TV channels, newspapers, online advertisers, etc. for documentation purposes.

Referring to the new recommendation issued by the MIB, Manisha Kapoor, CEO and Secretary General, Advertising Standards Council of India (ASCI), said, “The MIB has taken note of various issues related to the functioning of the portal, the way digital advertising functions and also noted that the court has expressed concern primarily about the food and health sector.”

Kapoor also added that the commitment to fair advertising remains paramount and the industry must continue its commitment to complying with all applicable laws. Advertising is under increased regulatory scrutiny and advertisers and agencies should take the required steps to ensure compliance. This applies across all sectors.

The MIB warning stated, “In view of the directions of the Hon’ble Supreme Court of India and in lieu of previous Warnings dated 03.06.2024 and 05.06.2024, advertisers/advertising agents publishing advertisements for products and services related to food and health sectors are advised to upload the annual self-declaration certificate on the mentioned portals, as applicable and share the proof of uploading the self-declaration with the concerned media entities like television channels, newspapers, web-based advertisement publishing entities etc. for documentation purposes.”

These annual certificates issued by advertisers/ad agencies will be uploaded on Broadcast Seva portal in case of TV/Radio advertisements and on Press Council of India (PCI) portal in case of print/online advertisements.

It has also been clarified that advertisers/advertising agencies have the responsibility to ensure that every advertisement published by them complies with the letter and spirit of the applicable Indian laws, rules and regulations.

Industry representatives, especially advertisers and agencies, speak openly about the challenges and difficulties they face with this mechanism.

While they acknowledged that SDC is a step in the right direction, the mechanism cannot ultimately defeat the purpose of the government initiative, which is to finally put an end to the scourge of misleading advertisements that harm the end consumer. Various bodies, including ASCI, ISA and DNPA, stakeholders from broadcasting and newspapers, and the advertising industry, have repeatedly stressed that mandatory SDC for all advertisements increases complexity and delays, which may adversely affect the efficiency and revenues of media and advertising agencies.

In a conversation with Storyboard18, Janani Kandaswamy, Senior Category Lead – Brand Marketing, ITC, last month, highlighted that “perhaps regulation does not need to apply to all types of ads (such as ads that do not have a technical claim that needs to be proven). These dilemmas need to be openly discussed by the MIB and diverse voices representing advertisers across brands, creative agencies, market research firms, legal and R&D departments.”

It was also highlighted that this mechanism imposes a significant administrative burden on the MIB, requiring continuous monitoring, record-keeping and management of portal capacity to cope with the influx of hundreds of thousands of self-declarations every day.

Until July 3, advertisers and agencies in various categories were required to submit SDCs before publishing each ad, regardless of the number of ads in a single day. Currently, PCI has around 66,000 SDCs on its portal, while BSP has around 8,000 SDCs on its portal. It is worth noting that the number of ads in the country is high.

For the first time, the Ministry mentioned an “annual” SDC or limited the obligation to the food and healthcare sectors only, essentially limiting the obligation to high-risk categories where the risk of misleading or false claims could harm consumers.

From January 2023 to December 2023, there were about 3.4 billion digital ads, 860 million TV ads and 1.3 million print ads, according to industry reports. There are also radio ads, other forms of advertising such as influencer marketing and UGC, small and medium-sized businesses advertising in regional publications.

On June 25, the ministry had admitted that what emerged from the Patanjali misleading advertisement and false health claims case had been extrapolated to all sectors. It was, therefore, considering whether the interpretation of the Supreme Court order had been made correctly or not and expressed its intention to limit it to the health and food sectors.

In addressing these issues and softening its stance on the matter, the government has indicated that it is working to improve the rules to make them simpler for the industry and to limit the scope of regulation to the food and healthcare sectors.

Three advertisers Storyboard18 spoke with said there was a palpable sense of relief among marketers. They also stressed that agencies would also benefit from the revision, given that many advertisers had outsourced SDC to agencies, freeing up ad firms.

The CMO of a major FMCG company said that while it was a mess earlier, now there seems to be some clarity and a more sensible approach. However, advertisers are looking for more clarity on what products and services fall under Food and Health, as the latter can also include wellness products and services. More clarity is also required on publishers’ obligations to obtain SDC.

But the SDC alone won’t guarantee there won’t be misleading ads, the food brand’s marketing chief said. “Nothing will change until the focus shifts to the bad actors,” he said, referring to rogue advertisers and repeat offenders. They added that the challenge has always been enforcing advertising regulations and laws. “We have to punish rogue advertisers, impose advertising bans on them… Until that’s fixed, there will always be people breaking the rules.”

Business strategist and investor Lloyd Mathias said the question that needs to be asked is how to strengthen integrity and how to punish dishonest advertisers. He said: “There has to be a method by which advertisers who make false statements or misleading advertisements are punished quickly. If you have deliberately made a false statement, even though there are laws about it, will you be banned from the media? So no advertiser registered in this country will be able to receive your communication for a period of six months. This will make advertisers much more aware of their responsibility to society.”

He added that “there will always be roguish elements, as in every society. But I think the problem that needs to be solved is at that end.”