India: Sponsored Content – The Indian Perspective

What encompasses "sponsored content" is still unclear in the Indian context. The phenomenon seems to be not very old, but, instances of the same are being witnessed at a fairly increasing rate. Having said that, the concept is relatively ambiguous, in so far as, one needs to clearly identify whether particular content is indeed sponsored.

Marketing professionals assert that there is continued shrinkage of the time-span for which an audience's attention can be captured, thus, the need for adopting innovative means to grab said attention. Blending of advertisement with editorial content, in the same space as the editorial, seems to be one such innovative way through which advertisers try to catch the attention of the reader. Some people designate the said blending as native advertising.

In the Indian context, some advertisers describe "native advertising" as an umbrella term which may include within its fold – sponsored content, branded content, sponsored posts/articles/blogs, promoted tweets, advertorials, product placement, in-feed ads etc., all being distinct from traditional direct sales advertisements.

One of the first instances in India when the concept of sponsored advertisement caught attention was the "Monsanto Controversy." A leading English daily, The Times of India, published an advertisement titled "REAPING GOLD THROUGH BT COTTON" on August 28, 2011. Eyebrows were raised only when it was realized that said advertisement had appeared as a news report, verbatim, in the same newspaper, three years earlier, on October 31, 2008. The controversy revealed the issue of advertisements being carried out in the guise of news reports based on field visits of reporters.

Thereafter, there have been numerous instances of sponsored content in India, general examples being "Impact Features" in electronic & print media; sponsoring of award ceremonies related to social causes by corporate, and their telecasting or reporting in the relevant media; writing sponsored articles, posts in newspapers, magazines or on social media, etc.

Another dimension of sponsored content in India is the issue of "paid news." A news report or analysis in any form of media, if present therein only because some consideration is paid to the publisher or broadcaster, in lieu of such publication, then, said news is commonly referred to as paid news.

Generally, the financial considerations beneath the paid news reporting remain hidden from the eyes of the public. To give a single example of how the arithmetic works, by virtue of secret agreement between a corporate house and a media house, the corporate house transfers a certain shareholding in any of its subsidiary company(ies) to the media house in return of advertising space and favourable reporting.

The issue of paid news came to haunt the Indian media space in 2008 when it was alleged that some media houses were paid large sums of money to carry favourable reports about politicians and political parties.

Thus, it may not be wrong to say that a nexus is being built between the corporate houses, politicians and the media, which is highly dangerous in a democracy like India where media is considered to be the fourth pillar of the State.

Having had a discussion on the instances, the issue of sponsored content raises two questions - within which category of advertisement would sponsored content strictly fall, and the regulations which govern said advertising.

The answers to the above questions seem to be not very clear and precise.

Sponsored Content in the online space including social media

As is the case globally, India has also seen a shift towards online media in so far as readership of newspapers and magazines is concerned. Considering the nature of online media, subscription revenues are not something which drives media companies having their presence online. Advertising revenues form the bulk of revenues, and in the circumstances when online consumers have started using ad-blocking software, and banner or display ads bring in negligible revenue, companies have to resort to native advertising to stay afloat. Online news providers are now using native advertising to earn a major part of their revenues.

Here again, the issue of regulation of native advertising in the online media arises. There is a certain set of Rules, Guidelines and Codes, which do provide for regulation of advertising content. A few prominent ones are as follows:

  1. Advertising Code in the Cable Television Rules, 1994, regulates advertising on cable TV;
  2. Advertising Standard Council of India (ASCI) Code regulates advertising in general in all forms of media;
  3. Guidelines of the Press Council of India govern the advertising content, particularly, in newspapers;
  4. Editor's Guild of India oversees the depiction of advertorial content in news publications in all forms such as print, visual and digital.

As there are no specific regulations or guidelines, we believe that the guidelines applicable to other forms of media should cover online media as well, i.e., there should be clear demarcation of news from advertisements using disclaimers; there should be clear demarcation of advertisements from newspaper editorials; there should be adequate disclosure or disclaimer as to the sponsor of news content; and finally, the general principles of ensuring honesty & truthfulness of representation and free and fair journalism should be followed.

The compliance of above-identified guidelines would involve the use of disclosures, which are currently rarely observed, but, if such disclosures are indeed provided, then, the concept of native advertisement would lose its meaning.

Thus, it is the need of the hour to have clear guidelines which regulate this recent field of advertisement, so that, the sanctity of news-reporting remains intact without compromising with the earning potential of media companies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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