Indian companies are finally tapping into a digital goldmine: Social media influencers.
“From celebrities to the rising class of micro-influencers—experts in a specific topic with smaller but more highly engaged audiences—influencers are emerging as a critical marketing tool for brands,” according to a new report by Gurugram-based influencer-marketing firm Buzzoka. “Influencers help brands grow awareness and consideration. Increasingly, they’re also helping drive sales.”
For the research, the company surveyed over 500 brand custodians—including top ad agencies as well as startups—and content creators like bloggers, YouTubers, Twitter influencers and Instagram influencers.
Over half the respondents said the biggest draw to invest in influencer marketing is “better reach and engagement.”
In fact, now spreading word-of-mouth through influencers is considered a more lucrative option than organic search and even paid marketing.
In 2018, most companies spent between 5% and 7% of their overall marketing budgets on online influencers. This year, 73% of firms plan to increase the share of spending on influencer marketing.
An upside of using influencers to market a brand is that it is not time-consuming like most other modes of advertising. Most respondents spend less than 10 hours on a campaign.
Instagram was the top choice in influencer marketing among Indian companies in 2018, Buzzoka revealed.
The photo-sharing site will continue to reign in 2019 with 69% of respondents listing it as the top platform they will bet on this year. LinkedIn (8%) and TikTok (8%) are the second-most preferred options.
For Indian companies, quality is more important than the reach of an influencer. Content quality is the top criteria that companies consider before bringing an influencer on board.
In addition, models and movie stars aren’t the only ones brands are courting. Over eight in 10 survey respondents said the role of commoners is “important” or “extremely important.” These are ordinary citizens who’ve built up an online fan-following of thousands and in some cases millions of people.
For instance, 25-year-old YouTuber Prajakta Koliwa, who has more than 21 million subscribers on her channel “mostlysane,” was signed up as the face of H&M India’s online store. She also tied up with Yatra.com to create relatable content about travel and collaborates with Samsung often. Recently, she even appeared in a television commercial for WhatsApp late last year because she had previously spoken about fake news on her channel.
These online personalities are raking in big bucks.
Somya Gupta, an Instagram celebrity with over 500,000 followers at the age of 21, earns almost Rs200,000 each month from advertising for over 50 brands including Calvin Klein, Loreal, Lakme, Garnier, Maybelline and One Plus. Fashion blogger Aashna Shroff earns between Rs5 lakh and Rs10 lakh monthly just from her Instagram posts.
Nano-influencers, whose follower counts are in the low thousands, are another breed of online celebrity that is sought-after because when they market a product to their small audience, the recommendation almost seems like it came from a friend. And these people also don’t encash huge cheques. Often, they’ll advertise in exchange for free products or experiences—the most preferred method of payment among Indian firms.
Despite the apparent promise of social media marketing, brands are taking things slowly.
Players in the ecosystem are still conservative because this mode of advertising is still nascent. On average, over two-thirds of branding companies spend $50,000 on influencer campaigns per year per brand.
The biggest roadblock is that brands are still struggling with figuring out the return on investment from influencer marketing–the top concern listed by 46% of brand experts. The flooding of fake followers across these platforms make it hard to assess the real impact of influencers.