Is ASCI's new paid ads clause remoulding how media sells on social?

A month into the Advertising Standards Council of India’s (ASCI) implementation of Clause 1.8, the advertising ecosystem seems to be witnessing a quiet shift in how media companies present sponsored content on social media handles of influencers or content creators and portals of news publications. 

The new mandate, introduced this August, specifically targets the blurred lines between editorial credibility and paid promotions, a grey area that had been drawing consumer complaints and leading to eroding of trust on digital media platforms.

Read e4m report on ASCI updating social media code

While definitive compliance figures are still not known in public, the industry has started seeing a positive shift. Manisha Kapoor, CEO and Secretary General of ASCI, told e4m, "The inclusion of the new clause was prompted by consumer complaints around misleading or undisclosed promotions, particularly on platforms with high editorial credibility. Transparency is essential to protect both consumers and media brands."

The newly added clause under Chapter 1 of The Code for Self-Regulation of Advertising Content in India states that “Social media advertisements or promotions posted on the handles of media companies must be clearly identifiable and distinguishable from editorial or any other content. All such advertisements should add adequate disclosures upfront and prominently at the beginning of the post, such that audiences know they are interacting with an advertisement/promoted content”.

The clause also outlines permitted disclosure labels, including:

- Advertisement

- Partnership

- Ad

- Free Gift

- Sponsored

- Platform disclosure tags

- Collaboration

Read e4m post on ASCI's report on digital media compliance 

Mistaken Identity?

This mandate has come at a time when digital media serves as a primary news and information source. Several media outlets regularly post news and features on their social platforms, and ASCI has observed that ads with no or poorly visible disclosures sometimes make their way into such posts.

"With ASCI's Clause 1.8 now mandating that media companies label paid or sponsored posts shared on their social media handles, the intent is to ensure that advertisements are not mistaken for editorial content," Kapoor explains. "Digital media often serves as a primary news and information source and, hence, transparency is essential to protect both audiences and media brands." She adds that to maintain the integrity and trust of editorial content, it's important that consumers know whether they are engaging with sponsored material. "Ultimately, consumers have a right to know if they are viewing sponsored or editorial content, regardless of the platform."

The shift is particularly significant for creative agencies managing influencer marketing and native advertising mandates. Sharing how narratives are changing, Rosanlal Behera, Co-founder at Mashrise, a brand marketing agency, said: "Since audiences instantly recognise when content is sponsored, our focus has shifted toward stronger storytelling and value-driven narratives.

“By making authenticity the core of native advertising, we ensure campaigns feel engaging even when labelled. The rule has pushed us to elevate creativity instead of relying on subtle promotion."

Read more on ASCI cracking down on influencer violations

Performance Metrics 

Interestingly, according to industry players, transparency hasn't dented campaign effectiveness. "We have seen that clearly labelled posts perform on par with, and in some cases better than, unlabelled ones," Behera reveals. "Transparency builds credibility, which directly impacts trust and engagement metrics. Consumers respond well when they know upfront that a brand partnership exists. Strong creatives still drive clicks, views, and conversations, proving that honesty does not dilute performance."

"Consumers today are highly aware and appreciate brands that respect their intelligence," Behera further said. "Transparent sponsored content feels less intrusive and more authentic than traditional ads, which often disrupt the user journey. We consistently find audiences more open to engaging when the partnership is acknowledged."

For agencies, the mandate has also meant tightening operational workflows. "From creator onboarding and content briefing to pre-launch approvals and live audits, every partnership is reviewed for adherence to ASCI guidelines," Behera explains. "We see this not just as compliance but as a safeguard for brand reputation and consumer trust."

Disclosure anxiety?

Divisha Iyer, Vice President at Schbang's influencer marketing division Fluence and Represent, believes that it's not just the ASCI guidelines that determine engagement but the strength of the content itself. "It really comes down to the strength of the content and how seamlessly the brand is integrated into the creator's narrative," she says. "While the disclosures are now mandatory, audiences tend to engage with content that feels authentic, visually strong, and true to the creator's usual tone."

Iyer has seen many collaborations perform well despite being openly tagged as paid. "It is simply because the storytelling and creative fit were right. When the content adds value or entertainment, the presence of a label like #Ad doesn't take away from its impact."

Sharing the consumer perspective, Iyer further said, "Consumers today are far more aware and intuitive. They know what their favourite creators genuinely use or believe in. So even before the guidelines, audiences could often tell when something didn't align with a creator's personality. The ASCI guidelines have simply brought more clarity and transparency to this relationship."

She emphasises that "choosing collaborations that genuinely align with one's personal brand ensures that even sponsored content feels natural and credible, which is what truly drives positive audience response".

The creator's perspective

For creators on the ground, the shift has been more operational than creative. Ridey Behl, a content creator with 191K followers on Instagram, says his content strategy will remain unchanged. “I will simply begin adding the paid partnership tag, as all the promotions I do fall within my own genre,” Behl explains. "My approach has always been to create a distinct script first and then integrate the promotional element, so there's no need to alter the nature of my content."

He noted that brand attitudes have been evolving as well. "Earlier, many brands specifically requested that I avoid tagging their collaborations as paid partnerships. However, this has started to change: for instance, during my recent collaboration with Flipkart, they explicitly asked me to include the paid partnership tag."

Behl's observations align with what agencies are seeing across campaigns. "From my observation, many influencers often compromise on quality once they receive a paid promotion. They produce content that feels disconnected or poorly executed, leading viewers to skip the video altogether," he says.

He believes the industry needs to reset expectations around influencer ROI. "Expecting direct sales from a single reel is unrealistic. Awareness and reach come first. Audiences need to recognise and connect with the brand before any tangible conversions follow. The key is authenticity: when promotions are integrated naturally within a creator's regular content, engagement remains strong, and both the creator and the brand benefit in the long run."

Naman Kapoor, a content creator with 212K followers on Instagram, sees the regulation pushing creators toward better craft. "Since audiences often have a reflex to skip content as soon as they identify it as an advertisement, creators now have to work harder on storytelling and hooks to retain attention," he says. "This has pushed many of us to become more creative and strategic—focusing on crafting authentic narratives that seamlessly integrate the brand message."

He acknowledges the dip in engagement but views transparency as a long-term investment. "Yes, it does affect engagement to a certain extent. Viewers tend to scroll past content labeled as sponsored, regardless of its quality or relevance," Kapoor admits. "However, in the long run, being transparent can help strengthen trust between the creator and the audience."

The real risk, he warns, lies in avoidance. "Some creators avoid explicitly labeling content as an advertisement due to concerns about reduced engagement or reach," Kapoor observes. "However, concealing sponsored content can erode audience trust over time and create a perception of dishonesty. In a digital ecosystem built on authenticity, failing to disclose partnerships not only risks damaging a creator's reputation but can also lead to regulatory repercussions."

As media companies adjust to the new normal, the focus is shifting from concealment to authenticity, from clever camouflage to confident disclosure. For creative agencies, the challenge is no longer about making ads look like editorial content but about making branded content valuable enough that audiences engage with it regardless of the label.

After this fine recalibration, transparency isn't a barrier to performance but a foundation for lasting trust between brands, creators, and consumers.