The government has issued the 'National Advertising Policy, 2083' to bring advertising through social media and digital media under the purview of formal regulation. The policy, approved by the Council of Ministers on Thursday, has brought the challenges of modern technologies such as AI, deepfake, influencer marketing and sponsored content under the purview of regulation.

There is a provision for mandatory self-declaration of sponsored content and influencer marketing on social media. The policy states that the overall advertising market will be uplifted by encouraging the use of modern technology developed in the advertising sector and developing the capacity of individuals and organizations working in this sector.

Sponsored content and influencer marketing on social media should be self-declared mandatory 'Advertisements such as deepfake created using artificial intelligence and requiring self-declaration of sponsored content and influencer marketing will be regulated,' says Policy 9.13. According to this policy, the goal is to complete this plan within the next two years in collaboration with all three levels of government.

Although regulating the use of AI and deepfakes in the advertising market is necessary, its implementation and monitoring are important aspects, says Ranjit Acharya, Head of Prisma Advertising. ‘Regulating this when the identities of celebrities and influencers are being misused globally will be a big problem for our creators,’ he said, ‘But it is not enough for the government to just make rules. Its monitoring and implementation aspect is the most challenging and important.’

The government has brought social media, digital platforms and influencer marketing, which have become widespread in recent times, under the purview of formal regulation for the first time. The policy has given the responsibility of systematizing advertisements on social media and digital platforms to the Ministry of Information and Communications with the support of the Office of the Prime Minister and Council of Ministers. He pointed out that the Ministry of Information and Communications and the regulator, the Advertising Board, should be digitally enabled to monitor digital platforms. ‘If there is no necessary preparation and infrastructure, there is a fear that the policies and regulations will be limited to paper only,’ he said.

Former Chairman of the Advertising Board, Laxman Humagain, also emphasized that the policy itself is not everything and a strong law (act) is needed to implement it. ‘If the law is made and implemented correctly, Nepal’s advertising market will feel its positive impact within the next two to three years,’ he said. ‘It is a big deal in itself that such a comprehensive advertising policy has come up for the first time in Nepal. For the first time, the participation of all three levels of government has been ensured in the regulation and monitoring of advertising.’

The government plans to make arrangements to ban advertisements that are untrue, misleading, prohibited by law, and have a negative impact on consumers. ‘To systematize advertising on social media and digital platforms, the ratio of advertising on traditional and digital media will be determined,’ says Policy 9.15, ‘A system will be made to allow startup businesses and small entrepreneurs to advertise on social media and digital media up to a certain amount.’ The government aims to balance advertising on digital and traditional media.

The policy has made strict provisions to clarify the boundaries between advertising and news in the media. It has been said that the trend of giving advertisements on the cover of news and writing news based on advertisements will be stopped. ‘Presenting advertisements as news and news as advertisements and publishing and broadcasting positive or negative news based on whether advertisements are given or not will be discouraged,’ says Policy 9.8.

To protect the rights of consumers, those who make false advertisements have been brought under the ambit of compensation. It has been ensured that consumers will get compensation if they suffer losses due to misleading advertisements. The policy states, ‘If any harm is caused to consumers due to untrue and misleading advertisements, necessary compensation will be provided.’

It is mentioned that advertisements that are against national interest and sensitivity will be completely banned. Accordingly, advertisements that insult the flag, national anthem and dignitaries of Nepal will not be allowed. ‘Advertisements that undermine the sovereignty, geographical integrity, freedom, independence, ethnic and religious tolerance of Nepal, misuse the national flag, national anthem, Nepal’s emblem or any or all parts thereof, or insult or devalue national dignitaries will be banned,’ the policy states.

The government aims to make the Advertising Board more powerful to implement this policy. In the coming days, advertising will be regulated at all three levels, federal, provincial and local. The government aims to increase the contribution of the advertising sector to the gross domestic product (GDP) within the next five years. The policy states that an integrated information system and data bank will be established to prevent unhealthy competition in the advertising sector and to determine scientific rates.

The government plans to establish an advertising fund as per the law to implement the policy. It has been said that the fund will collect grants, fees, support from various agencies and donor organizations, and the amount received from advertising transactions.

The government has concluded that there is a need for a separate national policy on advertising to bring new trends such as social media, digital media, digital and influencer marketing, and AI under the ambit of regulation and to address the opportunities and challenges created by the advertising business by involving all three levels of government and stakeholders in advertising regulation.

Although regulating advertisements on social media made through AI or deepfakes is a challenging task worldwide, Nepal is capable of regulating it, said Humagain, former chairman of the Advertising Board. ‘It is necessary to bring in a monitoring system for this. An advertising fund has been arranged to cover its expenses,’ he said, ‘The amount collected in the fund will be managed through regulatory charges raised from the market. The policy has been designed so that there is no additional financial burden on the government’s coffers.’

Advertisers, however, are somewhat concerned about establishing an advertising fund. Acharya said it should be clear where the money in the fund comes from. ‘If additional taxes are imposed on advertising business or the facilities provided to agencies are reduced, it will discourage the market,’ he said. ‘Since the burden of such taxes will be on the consumers, it does not seem practical to collect money from advertising business.’