Introduction

As per govt. data India is expected to have over 880 million internet users, making it a major market for online advertisements. In today’s digital age, advertising in India is rapidly growing due to affordable smartphones, better internet access, and advancement in technologies like AI and blockchain. Even today there are advancements within AI with recently Deep Seek coming into picture. Companies are finding new and creative ways to connect with customers. However, as everything has its positives as well as negatives and to address these challenges that new technologies bring along, the Ministry of Information and Broadcasting has launched the Digital Advertisement Policy 2023, effective from June 4, 2024. This policy  provides a robust framework designed to promote ethical, transparent, and effective practices in digital advertising.

The objectives of the Policy

The Digital Advertisement Policy 2023 paves the way towards a more organised and accountable environment with the objectives as follows:
• Digital advertisements enable precise targeting based on user behaviour by leveraging different technologies that track, allowing advertisers to connect with their audience more effectively.
• By leveraging the use of data analytics, advertisers can optimize their spending on such resources, reducing wastage typically associated with traditional media advertisements.
• With a large youth demographic consuming online content, the policy seeks to enhance youth engagement through digital platforms by allowing creative ways to digital advertisement.
• The policy facilitates better information distribution from government bodies to its citizens, encouraging greater participation in public initiatives. As today we can experience how different ministries raise awareness regarding different issues in society through phones.
• Transparency and ethical advertising practices to empower customers and enable them to make informed choices, fostering greater trust in digital campaigns.
• The tier-based system allows emerging and regional platforms to participate in government campaigns, promoting inclusivity, support and diversity in the digital space.

Understanding the Digital Advertisement Policy 2023

The policy lays the groundwork for leveraging India’s extensive digital ecosystem for impactful public communication. Key Provisions are as follows:
• Nodal Agency: To streamline processes and enhance accountability the Central Bureau of Communication (CBC) has now been designated as the nodal agency for managing advertisements across empanelled internet websites, mobile applications, OTT platforms, and digital audio platforms.
• Empanelment Criteria: The policy ensures standardized participation across a range of digital media, enabling smaller platforms to compete effectively with industry leaders by having a qualifying criteria for empanelment of platforms. For instance:
o Websites must have been operational for at least one year.
o They must achieve a minimum average unique user count per month, categorized into four tiers (A+, A, B, C) based on the traffic volume.
• Performance Metrics: Metrics like Click-Through Rates (CTR) for web ads, View-Through Rate (VTR) for video based ads and Listen-Through Rates (LTR) for audio ads are enforced to ensure campaign efficiency. A minimum CTR of 0.30 and LTR & VTR should be at least 80% has been established across all the categories to ensure that advertisements are not only seen but also engaged with by users. This metric will influence billing amounts based on performance. It also includes penalties for Non-compliance with benchmarks will result in billing deductions, holding advertisers accountable.
• Advertisement Properties: The policy specifies various advertisement formats available for platforms that an advertiser need to adhere to, including standard banners, video ads, and push notifications. Rates are determined on a Cost Per Thousand Impressions (CPTI) basis, promoting transparency and competition among advertisers. Ad formats include:
o Standard banner ads (e.g., 300×250 pixels), video ads (10-second spots), and push notifications are defined with cost-per-thousand-impression (CPTI) pricing.
o OTT platforms allow in-film promotions, while digital audio platforms include podcast sponsorships and audio ads.
• Consumer Protection: Safeguards against misleading advertisements and violations of data privacy are made integral to the policy by enabling transparency in ad disclosures and targeting methods to ensure that users are informed about the nature and source of advertisements. Advertisers must comply with the Guidelines for Prevention of Misleading Advertisements, 2022 and the Consumer Protection Act, 2019.
• Transparency and Certification: All advertisements now must be pre-certified by the CBC to ensure compliance with ethical and legal standards before they are published. Platforms are also required to provide real-time campaign dashboards and detailed post-campaign reports to maintain transparency.
• Encouraging Innovation: The framework supports the development of emerging ad technologies and formats while adhering to ethical advertising practices. Blockchain, AI, and augmented reality (AR) technologies are promoted for their potential to improve transparency, targeting, and user engagement.
• Multi-Stakeholder Collaboration: Effective regulation is achieved through collaboration between government agencies, industry stakeholders, and civil society.

Impact of the Policy

The introduction of this policy helps shape India’s digital advertising and brings both opportunities and challenges for advertisers in India:

• With the implementation of this policy consumers can be reassured regarding the authenticity of the advertisement by bringing in ethical practices and continuous monitoring mechanisms.

• Also, it is now easier for businesses both in India and abroad to allocate sufficient fund towards advertisement in different platforms with clear regulatory structure and compliance mechanism.

• Allowing new and creative way of advertising make it even easier for both the business and consumer as performance benchmarks can now be used towards more improved user experience and reducing spam and intrusive marketing tactics.

• Advertisers can now reach more audience through targeted campaigns that utilize data analytics. Also, organised empanelment process encourages competition among platforms, leading to better rates and services.

• Compliance with stringent performance metrics may require advertisers to invest more in optimizing their campaigns and rapid adaptation to changing digital trends and consumer preference will be essential for achieving success which could incur huge cost for the business.

  Conclusion

  The future of digital advertising in India looks promising with the introduction of policies that not only encourage innovation but also enhance effective communication between government entities and its citizens. The Digital Advertisement Policy 2023 represents a forward-thinking approach for regulating India’s dynamic and vibrant digital advertising ecosystem. By addressing critical challenges such as transparency, data privacy, and ethical practices, the policy lays the groundwork for sustainable growth. With the rise of emerging trends like AI, AR, and blockchain, India’s digital advertising industry is on the path to becoming more innovative, accountable, and consumer-centric. By striking a balance between innovation and trust, this framework serves as a guide for the future, ensuring that the digital advertising environment develops in a responsible and effective manner.