Celebrities and influencers in China may find this November more difficult than usual, as the "the Guidelines on Further Regulating Celebrity Endorsement in Advertising" (hereinafter referred to as "guideline") issued by 7 State authorities becomes effective recently. Like the Damocles Sword, the guideline provides clearer deterrence to the celebrities if they do not follow the instruction for the endorsement.
Why the authorities issued the guideline, how will the guideline change the celebrities' endorsement, and how to properly conduct the celebrities' endorsement under the guideline? This article would provide certain insight on relevant issues.
1. Why did the authorities issue the guideline?
The guideline is not a brand new regulation came out of nowhere, instead, it is a more detailed explanation of the existing "Advertising Law of the People's Republic of China" (hereinafter referred to as "Ad law"). The basic principles and general rules have been stipulated in the "Ad law", yet given that the celebrities endorsement on the internet developed rapidly which causes controversial incidents and may further damage the interest of the consumers, the authorities noticed the necessity to further regulate the celebrities endorsement with the issuance of the guideline.
By using the term "celebrities", the authorities refer to both traditional celebrities such as movies stars and singers, as well as internet influencers including key opinion leaders and livestreaming hosts. The celebrities often have huge group of fans who are willing to buy products merely based on their endorsement or follow their behaviors without careful consideration. If the celebrity endorsement does not comply with the Ad law, it will harm the interest of the consumer, in the meantime bring chaos to the market order or social order.
Under such circumstance, the guideline emphasizes the regulation from two aspects: one is the content of the ads, the other is the morality of the celebrities themselves. Many advertisers pay more and more attention on the ads content when conducting celebrity endorsement based on previous experience, but they may fail to conduct due diligence on the morality of the celebrities, which might also cause problem.
2. How will the guideline change the celebrities' endorsement? Enlarge the definition of endorsement
In the traditional endorsement celebrities often use their own image to promote the commodities, but as the practice has become more and more diversified, the guideline deems the following behaviors as "endorsement" as well:
1. Recommending the commodities with the name of the celebrities in the broadcast program.
2. Introducing the commodities during the internet program or livestreaming.
3. Using the role the celebrities have played in the film or television series in the advertisement to promote the commodity.
Therefore, if an influencer introduces certain commodity on the social media or during the livestreaming as entrusted by the advertisers, then such behavior will be seen as endorsement. The influencer and their agency need to be careful enough to avoid potential risk related to ads.
Stress on the morality of the celebrities
Besides ensuring the ads contents are in compliance with the guideline, the celebrities themselves need to obey the laws and social moralities, otherwise even if the ads content has no problem, the advertisers who continues the cooperation with the problematic celebrities will be punished as well.
Dior as advertiser has been alerted enough for similar situation. When the Chinese actress Ms. Jingtian was fined over RMB 4,642,200 by the Administration for Market Regulation (hereinafter referred to as "AMR") because of her false ads on the juice drink, Dior spotted such news and immediately hided the previous endorsement ads by Ms. Jingtian regardless of the fact that the content of the Dior ads does not violate the law, and such decision will certainly protect Dior from potential risk in the future.
Specified the obligation of the celebrities
The guideline clearly stipulates that the celebrities need to actually use the commodity before the endorsement, and ensure that the usage time or quantity is sufficient to produce daily consumption experience. Moreover, if the celebrities act as the brand ambassador, they need to specify the exact name of the product they have experienced.
For instance, some famous male influencers have a huge group of female fans so they get the chance to endorse female products like bras and pads, which they are impossible to experience by themselves. Under such circumstance, either the celebrities have to give up such endorsement, or they need to ask their close relatives to experience the product then provide detailed feedback.
Put more restriction on sensitive business field
Apart from common commodities, many sensitive business field are under stricter supervision, such as the medical treatment, pharmaceutical, medical equipment, healthcare food, etc; and other business fields including pesticides, veterinary drugs, grass seeds, livestock and poultry, aquatic seedlings and breeding industries have special requirements on the endorsement.
For the former, the guideline did not allow any celebrities endorsement on the relevant field of medical treatment, pharmaceutical, medical equipment, healthcare food; for the latter, the guideline bans relevant professionals to endorse on the pesticides and breeding industries. So a celebrity can endorse on the pesticides, even if such endorsement might not be convincing enough; but the professor on the pesticides field cannot endorse on the relevant commodities.
Emphasize the punishment on the celebrities
Most celebrities will use the name of their agency or company to enter the endorsement contract with the advertisers, but the guideline further emphasizes that if the ads violate the regulation, then celebrities themselves shall bear relevant responsibility as well.
As mentioned previously, given the Chinese actress Ms. Jingtian promoted the false ads of juice drink, so the AMR directly fined her over RMB 4,642,200, rather than imposing the fine to her company or agency. With such regulation, the celebrity will be difficult to escape from the potential punishment after breaching the Ad law.
3. How to properly conduct the celebrities endorsement under the guideline?
In general, the guideline raises higher standards for both the celebrities and the advertisers. To avoid potential risk, the advertisers need to carefully choose the celebrities they hope to cooperate with while pay enough attention to the content of the ads.
Cooperate with celebrity of good faith
The requirement of good faith can include both the legal compliance and the morality expectations in the society. Once a celebrity who gambles, is addictive to drugs or is punished by the authorities due to various reasons, he or she will certainly not be viewed as with good faith.
However, some controversial behaviors of the celebrities may also be deemed as morality issue which will influence the endorsement, such as the Chinese actress Zhengshuang who involved in the surrogacy and intended to abandon her surrogate babies when they are still fetus. So the investigation and due diligence on the celebrities conducted by the professionals who understand the local market will become more and more vital.
Advertise the "truth" with supporting materials
For the ad content itself, though we understand the creativity and exaggeration can be necessary in the celebrities endorsement, authenticity should be the key foundation of the ads. For instance, when the celebrities decide to promote any commodities, please use the true experience instead of fabricating the feedback; when the ads quotes certain statistics, please make sure the numbers are supported by materials to prove the authenticity.
Consult with professionals for uncertainties
To sum up, after the issuance of the guideline, the chaotic jungle of the current Chinese ads market shall adapt to the stricter and more detailed regulation, and the celebrities endorsement will face more challenges. If the advertisers or the celebrities are not sure about the compliance of the ads, asking the help of professionals such as a lawyer can be a wise solution.
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.