OTT Advertising Comes Under Scrutiny for Misleading Claims

As OTT platforms continue to grow in popularity across Indian households, a new survey reveals a concerning rise in manipulative design practices, or “dark patterns,” across major services. These deceptive tactics, such as hidden charges and forced app installs, are leading to increased scrutiny from both consumers and regulators.

Key Developments

According to a recent survey by LocalCircles, Indian consumers are increasingly being misled by subscription tactics on OTT platforms. These tactics often include deceptive charges, forced sign-ups, and hidden fees that are not transparently disclosed.

The survey highlights the growing concern over “dark patterns” in digital advertising, which aim to manipulate users into making decisions they might not otherwise make. The practices, often designed to boost subscriptions or ad revenue, are being reported across platforms like Amazon Prime Video, Netflix, and Hotstar.

Regulators are now focusing on ensuring transparency and consumer protection, with efforts to enforce stricter advertising guidelines. The Central Government and the Ministry of Information and Broadcasting are reportedly in discussions to develop clear guidelines for OTT platforms and eliminate these misleading tactics.

Industry & Expert Context

OTT advertising has quickly become a prominent way for marketers to reach viewers in a highly targeted manner. Unlike traditional TV ads, OTT ads are shown during content consumption, making them part of the viewing experience rather than an interruption.

This unique format offers a wide range of targeting options based on viewer interests, previous purchases, and viewing habits. However, experts are raising concerns that some platforms are exploiting this format to deploy misleading tactics that exploit user behaviour without adequate disclosure.

According to Digilogy, a digital marketing agency tracking emerging trends, OTT advertising is facing increasing calls for greater regulatory oversight to protect consumers. The agency notes that while the shift toward personalized advertising has its benefits, the fine line between effective targeting and manipulation is becoming increasingly blurred.

Why This Matters

For consumers, misleading claims in OTT ads undermine trust in digital platforms, leading to frustration and potential financial loss. This impacts their experience, as many consumers are unknowingly subscribed to services or forced into app installs.

For advertisers, the rising scrutiny and potential for penalties means that the industry must focus more on ethical advertising practices that respect consumer autonomy. The issue also threatens the broader OTT ecosystem, where growth depends on consumer trust.

For the industry, regulators are beginning to tighten the reins on how OTT platforms can operate, with some platforms already facing significant pressure to comply with new transparency guidelines.

What Happens Next

As discussions continue between the government and OTT platforms, it is likely that more stringent advertising regulations will be introduced. This will include clearer guidelines for subscription disclosures, forced ad placements, and better consumer control over app installs and charges.

Platforms will be required to develop better transparency measures, including clearer subscription cancellation processes, upfront charge disclosure, and more visible consent mechanisms for app installs.

In the future, consumers can expect more user-friendly OTT environments with less manipulative advertising, aligning with global standards for digital marketing ethics.

Final Takeaway

OTT advertising in India is under increasing scrutiny for using deceptive tactics to manipulate consumer choices. While the ability to target audiences precisely offers significant advantages to advertisers, ethical guidelines must be enforced to maintain trust and protect consumers from exploitation.

Digilogy tracks these developments closely, providing insights into the evolution of digital marketing regulations. For further updates on OTT advertising and digital marketing trends, visit the Digilogy News page.