RULES BREAKDOWN: Making Crypto Ads Less Enigmatic
ASCI has established guidelines to regulate advertisements of virtual digital assets and services
Advertisements of virtual digital assets and services will fall under the jurisdiction of the Advertising Standards Council of India (ASCI), the advertising industry self-regulatory body, from 1 April 2022. In accordance with the guidelines of the ‘ASCI, crypto products and NFTs can no longer minimize the risks associated with investing in virtual digital assets (VDAs). The guidelines state that promotional communication for VDAs must now carry the disclaimer “Crypto products and NFTs are unregulated and can be very risky. There may be no regulatory recourse for any loss resulting from such transactions,” prominently.
Manisha Kapoor, Secretary General of ASCI, said, “While other asset classes like mutual funds are regulated by SEBI, cryptocurrencies and NFTs are still unregulated in India. As long as ads for VDAs are allowed, safeguards need to be put in place. »
Besides cryptocurrency exchanges such as CoinSwitch and CoinDCX, the VDA space now includes NFT platforms. These include NFT markets set up by cryptocurrency exchanges such as WazirX and others like Viacom18 (Fully Faltoo), Jupiter Meta, etc. VDAs can also be traded within the Metaverse, which is another new creation in the tech world.
Into the crypto verse
Companies that provide services in the VDA space try to publicize their brands and product category with their advertising. According to the Pitch-Madison 2022 report, cryptocurrency exchanges CoinSwitch and CoinDCX spent `200-300 crore each on advertising in 2021 and were associated with sporting events and reality TV shows. Both were top announcers in cricket events in 2021.
High-decibel advertising for a category that is not well understood by the masses and not yet regulated by the government has raised concerns in 2021. “The VDA category is still emerging and is not like the traditional financial instruments. There is a lot of hype and uncertainty surrounding this space. The ASCI guidelines impose accountability on both brands and the ambassadors who promote those brands,” says business strategist Lloyd Mathias.
VDAs appeal to millennial consumers who are digital natives. “For these consumers, crypto products are presented as a way to get rich quick, which they are not. Therefore, the need for caution is very high,” adds Mathias.
Shrenik Gandhi, CEO and co-founder of White Rivers Media, says there has been a decline in cryptocurrency brand advertising since the end of 2021. “During this period, brands have focused on communication with existing customers through educational and informative content,” he says. .
Crypto exchanges have embarked on a journey to educate people about the category and demystify it for those who wish to jump on the decentralized finance (DeFi) bandwagon. To attract attention, they appealed to celebrities. In an advertisement for CoinSwitch, for example, Bollywood actor Ranveer Singh claims that trading crypto is “simple”, while his counterpart Ayushmann Khurrana tells viewers that investing in crypto through the CoinDCX platform is ” sure”.
ASCI guidelines state that “no advertisement may show that understanding VDA products is so easy that consumers need not think twice before investing. Nothing in the advertisement should minimize the risks associated with the category.
Amit Wadhwa, CEO of dentsu Creative India, said, “Brands now need to focus on building excitement around the category while clearly communicating the characteristics that differentiate one brand from another.” Since these brands target a wide audience, Wadhwa expects brand ambassadors to play an important role in promoting VDAs.
Other product categories for which advertising is regulated are alcoholic beverages and games. While the former simply cannot advertise in India and therefore resort to surrogate advertising, gaming platforms address the issue of addiction in advertisements and largely position apps as fun ways to spend time. time. ASCI introduced regulations for real-money gambling advertising in November 2020. Wadhwa points out that unlike alcoholic beverages or real-money gambling which are understood by people, cryptocurrency is still a largely unknown concept. for the majority.
At the end of 2021, the Board of Control for Cricket in India asked IPL teams to avoid partnerships with crypto products for IPL 2022. Gandhi expects that with ASCI regulations for the advertising of VDA, these brands could generate renewed interest.
Also Read: Mantras for Marketing in a Metaverse Market
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