Paytm to become member of ASCI

It will be the first e-commerce major to take advertising regulatory body's membership

The country’s fast-growing e-commerce industry will finally mark its presence at the Advertising Standards Council of India (ASCI), with Paytm set to become a member of the self-regulatory voluntary organisation next month.

The move is significant because advertising violations by e-commerce companies, which are big spenders on television, print and digital media, have been on the rise in recent years. 

ASCI members include key advertisers from various sectors, such as fast-moving consumer goods (FMCG), media, auto and telecom, which spend heavily to stay visible in the marketplace. However, no e-commerce company is a member of the body yet.

According to the latest update, for November 2016, by ASCI on monthly action taken against errant advertisers, six complaints were upheld against e-commerce majors Paytm, Amazon, Cleartrip, Magicbricks, Freecharge and Pepperfry for making false and misleading claims.

Paytm had stated in one of its advertisements in November, that it was offering a “flat 50 per cent cashback”, which was found to be misleading because the cashback was limited to Rs 150 only. 

While Paytm did not respond to a mail seeking comment on why it chose to be a member of ASCI, persons in the know say the digital payments firm had approached the council about a month ago expressing its desire to do so.

By opting to be a member, companies submit themselves to the ASCI Advertising Code, conveying the message that they wish to be responsible advertisers. Any violation, upheld by ASCI, puts the onus on the member to abide by the regulator’s decision.

This implies quick modifications to advertisements, which, if not done, could attract stringent action, especially in the case of television ads.

Those who are not ASCI members use it as a lever to not abide by the regulator’s directives, choosing to continue with their original piece of communication.

This has, for instance, played out in the case of Patanjali, the ayurvedic consumer products major co-founded by Baba Ramdev and Acharya Balkrishna.

Patanjali was pulled up earlier by ASCI for making “misleading claims” in its ads, but the company refused to modify its ads, saying it was not a member of the body, taking the matter to court. It is currently being heard in the Bombay High Court. 

Paytm’s decision is expected to prompt others to follow suit.

Flipkart, according to sources, is also considering becoming a member of the advertising body.