Are celebrities misleading consumers with endorsements on social media?

Kathmandu, September 1

In April, actor and movie director Nischal Basnet used  Instagram to share a photo of him browsing through hamrobazar’s website on his smartphone. In the backdrop, a laptop screen displayed a page of hamrobazar.com.

The photo caption read: “Hamrobazar, one of Nepal’s biggest  online shopping platforms. Select, buy and sell all types of goods from the comfort of home…. Feels good to see homegrown entrepreneurs making  it big.”

The post generated over 12,000 ‘likes’ and all but one comment was positive. A follower, mr_deuba, wrote: “I hope our brother has not received something in return for [promoting the website].” Turns out, mr_deuba’s suspicion was true.

“Yes, it was a sponsored post, and I was paid for it,” Basnet, who has  125,000 followers on Instagram, told The Himalayan Times.

Basnet is ‘very selective while promoting products’ and ‘gives priority to  domestic goods and services’, but the actor failed to mention in his  Instagram post it was a paid deal, an advertisement. This practice of advertising products on social media without disclosing compensation can mislead followers, prompting them to purchase. This could be outright breach of consumer rights.

Globally, brands seek celebrity endorsements and Nepal is no exception. Companies court celebrities to  promote clothing brands, footwear, beauty products, hotels, restaurants, education consultancy firms and a range of goods and services. Celebrities receive at least Rs 25,000 to Rs 30,000 per social media post and some are paid on the basis of ‘likes’ garnered by the post,  according to actors and actresses that THT talked to. Lately, the concept of social media brand ambassadors has also found its way into Nepal, under which celebrities enter into deals with advertisers and get paid accordingly.

Facebook and Instagram pages use celebrities such as Priyanka Karki, Malvika Subba and Samriddhi Rai to promote goods and services. Are they  promoting products because they like them or because they were paid in cash or kind?

It’s both,” said Karki, who has 2.1 million followers on Facebook and 597,000 followers on Instagram. “We sometimes promote products because we really like them and feel it’s worth a  shout-out and sometimes because we are paid.”

It’s not only celebrities who are engaged in promotional activities. The popularity of social media has given rise to a new  breed of endorsers — celebrities in their own circle. They are  called influencers because they have large following on social media. They may not be public figures, but brands use influencers to push their products.

Visit the Instagram page of Khusbu Gauchan, who has around  36,000 followers. You will find posts in which she endlessly talks about Livon  hair serum. Was she paid for those posts? Gauchan could not be contacted.

Confusion over motives of celebrities and social media influencers led the US government, last year, to make it mandatory for  endorsers to disclose ‘material connection’ between them and advertisers. The material connection could be ‘a business or family relationship, monetary payment, or the gift of a free product’. Since then, promotional posts shared by US celebrities on social media come with tags such as ‘paid partnership with’, ‘#sponsored’ or ‘#ad’,  which indicate they have been paid.

“It is unethical to keep our followers in the dark if we are paid to promote a product on social media,” said Malvika Subba, former Miss  Nepal, who has over 927,000 followers on Facebook and 209,000 followers on Instagram. Subba is one of the few Nepali celebrities who uses the tag, ‘#sponsored’ to flag paid posts. But she places the  tag at the end of the post, whereas, in the US, such signs have to be placed in the initial lines of the post so that social media users can see them.

Will the government introduce similar provisions to safeguard consumer interest? “We have heard of these cases but haven’t taken any action,”  said Yogendra Gauchan, director general of the Department of Commerce, Supplies and Protection of Consumers. “We’ll see if we can introduce a  regulation to curb this practice, as the Bill to Protect Rights of Consumers, currently in Parliament for approval, contains a  provision on ‘misleading advertisements’.”

The post Are celebrities misleading consumers with endorsements on social media? appeared first on The Himalayan Times.