Spends in influencer marketing poised to grow by 40% in 2021, say experts

The influencer marketing industry has been increasing exponentially as a mode of communication for brands, especially in times of crisis. At the same time, it is also presenting new challenges and opportunities for influencer partnerships.

According to a recent Duff & Phelps and Kroll – Face Value Report, 85% of FMCG companies (in Europe) have had their brand negatively impacted due to an association with an influencer in the past few months. Some reports also questioned their ROI.

With rising concerns over brand safety, BuzzInContent.com asked some top influencer marketing agencies and a few brands of their experience amid the pandemic and what kinds of trends will shape up in the upcoming years.

Ratan Singh Rathore

The Indian market with respect to influencer marketing spends is considered under-penetrated with only 2% of overall digital spends (estimated $50-60 Mn of billings) as compared to other emerging/mature markets, which average at 6-12%.

While this year influencer marketing definitely became more relevant in the digital eco-system as a great enabler to reach out to their audiences, it is estimated to grow at 15-20% only by the end of the year, said Ratan Singh Rathore, Business Head, INCA India.

“The intermittent closure of TikTok also dented the billings apart from the negative sentiment of Covid-19. Branded content (part of content marketing) with respect to publishers, OTT, MCNs has seen a negative 20-30% degrowth. Clients are moving more from inventory to performance, especially in testing times. By 2021, we are hoping to see a 10% growth in the Indian economy and a 15-20% increase in the Indian adex. This is attributed to the growth we see in influencer ad spend by 30-40% and to the overall growth of digital ad spend by 25-30%,” he said.

Gautam Madhavan

The Indian market has recently seen a spark in influencer marketing and is yet to boom massively, unlike the European market, said Gautam Madhavan, Founder and CEO, MAD Influence.

“The spends during the pandemic have not increased as per the projections for this year because one of the major platforms was taken out of the market, i.e TikTok. Hence with the same budget they could only reach out to audiences through Instagram, Facebook and Twitter mostly. To maintain brand marketing hygiene, the ones who used influencer marketing did not stop. The spends increased overall but not as compared to the projections pre-Covid. 2020 was survival for everyone, 2021 will be the real game,” he added.

Much like other businesses, influencer marketing had taken a hit in the initial stages of Covid-19, but in the last few months, the industry has picked up and how.

Anuja Deora Sanctis

Since there are no physical events, or store level activations, a lot of luxury, lifestyle and self-care brands have jumped into the bandwagon of influencer marketing big time, with its demand going up by 40%, said Anuja Deora Sanctis, Founder and CEO, Filter Coffee Co.

She sees not only global brands vying for it, but even local Indian brands and small business are benefitting.

Heeru Dingra

Heeru Dingra, CEO, WATConsult, said brands have realised the value influencer marketing brings to the table and hence expects the market to grow at an even higher rate next year.

Divij Bajaj

Divij Bajaj, Founder and CEO of Power Gummies, has felt that in the past few months, consumer packaged goods, gaming verticals brands and OTT platforms have significantly made influencer marketing their core strategy.

“I would say this is only going to move ahead in a positive direction as consumers are getting habituated to this form of communication and we can see new interactive platforms being launched every now and then, giving more opportunities to brands especially with their targeting in tier 2 or tier 3 cities in our domestic markets,” he said.

However, he believes brands have significantly started giving leverage to the influencers to build content on their own, while significantly loosening their control over content, giving influencers much more leeway on the messaging.

But is this freedom firing back with negative experiences?

Raising concerns of brand safety

Brand safety is a rising concern for brands and marketers. All markets across the globe have had cases pertaining to fraud and India is no exception to this.

It is important to highlight these cases when forming content strategies and during influencer selection.

Dingra said, “I don’t think this issue is area specific and with the staggering number of influencers having sprung up in the recent past in the Indian marketing landscape, we won’t be totally immune to it.”

Madhavan, who has seen so many campaigns during Covid which was massive yet not impactful mainly due to the communication, doesn’t blame the influencers wholly but says the copywriters and the brand strategists who approve such scripts are at fault too. 

He added some other factors too, “Selecting the right influencer for your brand TG, selecting the right script for influencers, keeping it as organic as possible and choosing the right social media platform as per your brand to promote are important.”

Prashant Sinha

At this point, there is no standardised way of selecting suitable influencers and mostly brands end up choosing influencers who have the biggest following or who are "seen" to be the biggest influencers, Prashant Sinha, Co-Founder and COO, Momspresso, said.

“Brands need to do their research to make sure they are partnering with relevant influencers best suited to deliver their marketing objective, who can bring the highest ROI with their reach, engagement, and follower base,” he added.

In India, clients are usually working with three-four multiple agencies and data reporting is generally aggregated rather than using an authentic tech interface.

With more than 600+ social, digital, publisher, digital and talent agencies present, the huge fragmentation in the country can also cause a bit of concern, said Rathore.

 “Companies need to be mindful of the partners they work with. They need to check the authenticity of their agencies by demanding higher-level insights during campaign planning,” he added.

Bajaj believes this is also an aspect of influencer marketing that a brand majorly depends on the influencer regarding how they incorporate the concept and maintain brand standards when putting any sponsored communication.

Also, a sure shot negative side to this is that influencer communication works as customer testimonies for people to read, understand or view their personal experience and correlate to the same. This allows a lot many competitors to create negative word of mouth, especially in these times when all the brands are using this particular marketing mode. Brands are finding marketing strategies colliding with each other, whether creating communication with niche influencers or in the fitness category, he added. For example, everyone is trying to build on the necessity of increasing immunity.

There is also another negative stance as a highly followed account of an influencer does not guarantee the right fit for a brand.

Bajaj advised, “Brands need to look at metrics around engagement and then track it downstream to see if it generates any leads. Also, the brands need to evaluate the right platforms for their strategy and the type of content too.”

There isn't much that has changed except for the fact that influencers are probably biting more than they can chew, which is affecting the quality and some influencers are not able to sustain it, said Sanctis.

“With demand being very high, there are certain restrictions when it comes to creating content. Secondly, the industry itself is not professional and there is no process in place where you can get influencers at certain KPIs. If you are planning a campaign at X cost, the rates may get increased while executing it, so that becomes a challenge for any brand. Thirdly, with the rising demand, more and more people are turning to be influencers and it gets difficult to filter genuine influencers, who bring in value to the brand,” she explained.

Shuchi Sethi

Shuchi Sethi India Lead, Casting Asia, said the influencer space being dynamic and led by human intervention, there will be instances when each stakeholder will not be on the same page, but there are ways to curtail this and get each member on a common ground.

“We wouldn't call this as a negative experience but rather a learning, we need to understand that we are working with content creators who have their creative input in place while as an agency, we need to also maintain the brand guardrails. There always has to be a healthy mix of each component for a better output,” she added.

Learnings from 2020 to be carried forward in 2021 for better opportunities

Sinha believes many brands will be more strategic with their use of influencers for their campaigns.

“Brands are learning how to keep things real, letting influencers make authentic content that drives relatability and engagement,” he said.

As influencer marketing industry continues to rise, brands are looking at engaging more customised content topics through influencers. Boosting that part would give a huge flip to reaching out a balance of audience with the same interest, said Rathore.

He said, “The other opportunity is the regional focus story which may catapult growth for the community using language / geo-targeting options. Brands need to change their mindsets in treating creators as a dominant channel in their media-mix. The use of artificial intelligence (AI) technologies can empower brands and marketers in ensuring intelligent integration of influencers in their content strategies which can mitigate the risk of potential fraud.”

The excessive content available on platforms is making the brands rethink how to present their association content in an organic manner.

“The spends per brand over influencer marketing is surely going to increase. However, the brands will vary their strategy as they would have been through the experimental stage,” said Bajaj.

According to Sanctis, brands need to be more cognisant of picking the right kind of influencer and tribe for them because the marketers will now be wary of the sanctions they could face in case their sponsored content is interpreted as misleading, thereby decreasing its face value.

“Outreach is not going to get engagement or sales, so brands will have to use a right mix of influencers. Also, how to leverage on their skills will be important. Thirdly, with increased budgets in this area, brands are now building long-term associations and focusing on maintaining healthy relations, so this brings in credibility, which helps in image building,” she shared.

Some of the huge untapped potential of this mode of marketing probably got discovered this year, but Dingra feels there is still so much in reserve just waiting to be utilised.

“When used wisely, influencer marketing has the potential to provide a very high return on investments. We can assume that the next year will prove to be more fine-tuned in this aspect as both the influencers and the brands will carry forward their experiences from this year and improve upon them,” she said.