Experts say not all advertising should require an SDC

The Supreme Court issued a directive on May 7, 2024, stating that all advertisers and advertising agencies must submit a ‘Self-Declaration Certificate’ before publishing or broadcasting any advertisement. The Ministry of Information and Broadcasting (MIB) mentioned that the SDC mandate would be implemented on June 18, 2024, aiming to foster transparency in the advertising industry. 

The press release notes, “The self-declaration certificate is to certify that the advertisement (i) does not contain misleading claims, and (ii) complies with all relevant regulatory guidelines, including those stipulated in Rule 7 of the Cable Television Networks Rules, 1994 and the Norms of Journalistic Conduct of Press Council of India.”

This mandate comes after advertisers like Patanjali have come under the scanner for making misleading claims in their advertisements. As per the Advertising Standards Council of India (ASCI)’s Annual Complaints Report for the fiscal year 2023–24, 81% of complaints regarding advertisements were because of misleading claims, with healthcare emerging as the most violative sector, contributing to 19% of cases. Digital ads accounted for 85% of ads processed and had a lower compliance rate of 75%, compared to 97% for print and TV, raising questions about the online safety of consumers.

Now, with the SDC, advertisers need to provide proof of uploading the Self-Declaration Certificate to the relevant broadcaster, printer, publisher, or electronic media platform for their records, and no advertisement will be permitted to run on television, print media, or the internet without a valid SDC. 

The advertisers need to provide the following details about the advertisements: 

i. Product/service being advertised

ii. Advertisement Title

iii. Brief description of advertisement in approximately 100-200 words, highlighting any

specific features or claims made in the advertisement

iv. Full script of advertisement (in pdf file)

v. URL of advertisement audio/video for TV/radio/internet advertisement OR PDF of actual

advertisement for print/static internet advertisement

vi. Proposed date of first broadcast/publishing of advertisement

Moreover, they must submit a Letter of Authorisation, Full script of advertisement, Advertisement video/audio file and CBFC Certificate (if available) for the SDC. 

The regulation has sparked mixed reactions from industry leaders, who have weighed in on its implications for the future of advertising in India.

Clarity is needed on the mandate

Harish Bijoor, Brand Guru, Founder, Harish Bijoor Consults Inc states, “There is a huge bit of paperwork that would hit the system if this is implemented,” emphasising on the millions of advertisements made in the country. 

Bijoor notes that many advertisements are created by small-time players who often produce an ad and then move on quickly and having to complete paperwork at the last minute could be counterproductive. While the primary objective of the SDC mandate is to protect consumers from misleading advertisements, Bijoor suggests that subjecting all advertising to an SDC may not be necessary. 

“Not all advertising is claim-oriented; not all advertising pieces make a claim. If the SDC is required only for advertising pieces that make a claim, it may be a good way to filter out the numbers and reduce it from millions to thousands.”

- Harish Bijoor

Nisha Sampath, Managing Partner, Bright Angles Consulting LLP, shares her concerns about the new mandate. She believes that the guidelines currently create more confusion than clarity. 

“I believe that the guidelines create more ambiguity than they provide clarity and may effectively hinder or delay communication altogether, rather than prevent misleading claims.” 

- Nisha Sampath

Sampath hopes that interactions with the Ministry will lead to more detailed guidelines and mandates in the coming days. On June 11, the Ministry of Information and Broadcasting (MIB) and advertising and media industry bodies held a meeting to discuss concerns regarding the mandate, which ended in a stalemate.

Considering the ambiguity in implementing the mandate, further clarity on this issue is expected to emerge only after July 9, when the matter will be presented before the Supreme Court, as per a report. Moreover, the Indian Society of Advertisers (ISA), the Indian Broadcasting and Digital Foundation (IBDF), and the Indian Newspaper Society (INS) had requested that the information ministry delay the implementation of the mandate, allowing the industry sufficient time to comply with the new regulatory norms.

Challenges 

While the mandate is yet to provide further clarity, industry leaders believe it could enforce stricter guidelines, marking a positive step towards ensuring transparency. 

Rishabh Mahendru, VP, Client Success & Growth, AdLift, however, notes, “Advertisers and agencies may face challenges such as increased compliance costs and potential delays in campaign launches.”

Given the fast-paced nature of advertising, Mahendru thinks that the compliance might impact creativity and agility, necessitating streamlined processes. 

“To make the SDC mandate more practical, periodic reviews and flexible provisions could be introduced, ensuring it remains adaptable without compromising its core objectives.”

- Rishabh Mahendru

Ambika Sharma, Founder and MD of Pulp Strategy highlights that the SDC mandate presents several challenges, especially for digital advertisers including agencies. 

“Digital advertising involves numerous simultaneous creative tests and campaigns, making it difficult to manage multiple declarations efficiently. The requirement to provide extensive information for each ad can delay campaign launches, impacting their timeliness and relevance in a fast-paced digital environment.”

- Ambika Sharma

She further comments that smaller businesses with limited budgets and manpower might find it challenging to comply with the detailed submission process, potentially hindering their ability to compete with larger companies. 

The practicalities of implementing the SDC mandate are a significant concern among professionals.

Preeti Nihalani, Chief Operating Officer, ENIL mentions that the proposed strict measures is “highly impractical”. 

“Many practical aspects appear to have been overlooked, including the direct financial implications caused by the increased time and effort required to comply with the SDC process, and the potential loss of revenue due to advertisers lacking the time and resources to do so,” says Nihalani.

Currently, 60% of radio advertisers are local businesses that may not have the resources to adhere to complex processes. Nihalani emphasises the impact on local businesses and small-scale radio channels, stating that they could face closure due to rising costs and a lack of advertisers.

Benefits & Potential Adjustments

To make the SDC mandate more practical and less burdensome for advertisers, several adjustments could be considered. Pulp Strategy’s Ambika Sharma says that simplifying the process for submitting declarations through more automated and user-friendly online portals can help reduce the time and effort required. 

Further, allowing flexible deadlines in the submission and approval process can help accommodate the fast-paced nature of digital advertising, according to her. 

“Providing additional support and resources for small and medium-sized enterprises (SMEs) can help them comply with the mandate without overburdening their limited resources. Introducing the mandate in phases can help advertisers gradually adapt to the new requirements without disrupting their ongoing operations.”

To make the SDC mandate more practical, Nisha Sampath advocates for more precise guidelines on what is considered to be misleading claims across different categories. 

She cites an example of beauty advertising, wherein the advertisers in the category cannot advertise fairness which is a clear mandate. Emphasising on the need for clear mandates, Sampath continues, “Governments have immense power to bring change, but only when they bring clarity to what they seek, not when they just impose constraints and paperwork.”

The mandate is applicable across broadcast, print and digital advertising. When it comes to the radio industry, Preeti Nihalani of ENIL says that the radio industry is already strongly regulated by the Commercial Advertising Code of All India Radio and maintains high standards despite the high volume of ads. 

“We believe that a more effective solution would be to empower and strengthen existing agencies like FSSAI, ASCI, and others to monitor and take proactive actions to curb such practices.”

She is of the opinion that introducing stringent penalties and criminal actions under Consumer Protection Laws against advertisers resorting to misleading advertisements would be more effective than the SDC mechanism.

However, she continues, “If the SDC system is to be implemented, it should primarily target high-risk areas such as health-related products, where false claims could significantly impact consumer health.”

Future of advertising

Pulp Strategy’s Ambika Sharma opines that in the future, advertisers may need to rethink their strategies, focusing on fewer, longer-term campaigns to minimise the administrative burden. This shift could impact the diversity and creativity of digital advertisements, she continues. 

Brand Guru Harish Bijoor highlights the mandate to be applied to political advertising before an election. 

He refers to the recent elections, where various political parties made numerous claims.

“Who holds the responsibility for these claims? Maybe an SDC for political advertising is a great idea,” Bijoor states. 

Nisha Sampath concludes that ultimately, advertisers are responsible for the claims that they make on their products. When they feel their claims are not differentiated, they push advertising agencies to strengthen them creatively. 

“But ultimately, it is they and their R&D teams, who know what the product can and can’t do. I feel that the rules are draconian from the perspective of agencies, and advertisers are the ones who need to be accountable.”

As the industry awaits further clarity from the Supreme Court and potential modifications to the mandate, the SDC mandate effective from today, could change advertising practices, but its success will depend on thoughtful implementation.