Regulations on dishonest marketing strategies online

Have you ever tried a product or service highly recommended by your favourite blogger or influencer? You had high expections, but the product was the total opposite of what they said.

Well, this is one example of false advertising.

To regulate deceitful marketing, the Advertising Standard Authority of Singapore (ASAS) has proposed guidelines. Under these guidelines, individuals who endorse products and services on behalf of companies have to be transparent about posting messages which are sponsored.

These guidelines will be implemented on 8 Jan 2016. From now till then, these guidelines are open to feedback by the general public.

The big question is: what do these guidelines mean?

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1. Bloggers/influencers have to state if it is their personal opinion or a marketing ploy

These guidelines proposed would require people hired by companies to advertise their products or services through social media to differentiate their opinion from what the company wants them to say and promote.

2 The relationship between the poster and the company should be declared

This means that even when bloggers are stating their honest opinion, they would have to clearly state their commercial relationship with the company in the post.

For example, bloggers who are doing a review on products would have to state clearly that they are sponsored by that particular company even if the opinions are completely theirs.

In addition, bloggers paid to wear a particular brand will have to state their sponsorship details too.

3. Bloggers have to ensure that the information provided is accurate

Bloggers have to accurately disclose all the costs and procedures to purchase the goods or services in their post.

For example, when reviewing a service — such as eyelash extensions, manicures etc. — influencers have to clearly state all costs, including the hidden costs which are usually not included or purposely left out in posts.

Additionally, the method or process to acquire the goods or services must be accurately spelled out.

Why are these guidelines in place?

Due to the lack of regulations in new media, these guidelines exist to fill in the gap not covered by the Singapore Code of Advertisement Practice (SCAP). These regulations on dishonest advertising would effectively help to protect consumers from being deceived by inaccurate information from bloggers or influencers.

Information asymmetry is a problem caused by such dishonest marketing practices, where producers know more about the product than consumers. With these guidelines, consumers would get more accurate information about the product or service and thus, be able to make better decisions.

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Featured image via The Next Web
With reference to Today