By next year, the global influencer marketing industry will cross the USD20 billion benchmark.
The 4th Industrial Revolution cataclysmically altered the way people engage with each other and the way brands engage with the consumer. One transformation was the rise of platforms like Instagram, YouTube and Twitter. With their growth, marketing or rather advertising was democratised, i.e., individuals began to hold more power than traditional ambassadors.
Unless you’ve been living under a rock, you know what I’m talking about – Influencer Marketing.
What’s Influencer Marketing?
Using a person (or persona) to drive a brand’s message to a broader audience in an organic manner is influencer marketing. The person is a social media influencer with the power to alter the purchasing decision of other individuals. Their influence arises from their expert knowledge, skill, and experience in a niche.
How Did Influencer Marketing Came To Be?
There’s nothing new to it. For as long as people have been selling, there have been ways to manipulate buying decision. What’s changed is the platform. Earlier it was big-screen actors influencing the end-user, now it is online content creators.
The shift occurred due to two reasons.
● Millennials began consuming media online instead of radio, print or television. In other words, they started listening to what folks were saying on the internet.
● The current generation became too savvy by half. They could sniff a paid advert in seconds, which meant traditional marketing lost its touch and word-of-mouth references took precedence.
All in all, consumers realised that recommendations from online influencers were far more authentic and brands woke up to the fact that networking sites promoted sales. Combined, the two exploded influencer marketing.
What’s The Current Market Scenario?
By next year, the global influencer marketing industry will cross the $20 billion benchmark. Of this massive pie, the Indian niche is worth about USD75 to 150 million. Arguably, influencer marketing is one division of digital advertising that’s growing at the speed of light.
Brands are finally becoming serious about it. The allocation of funds is moving from “might-try” to planned spends. As per our observation and trends in the coming years, more than 70% of firms in the country will boost their spends on social media influencers.
Why, you ask?
Influencer marketing increases the visibility of a product/service/brand to the most coveted demographic – those between the ages of 16 to 34. When done right, a digital campaign results in 4 to 5 times the ROI of a traditional promotion.
So, Where’s The Money?
Instagram is the leading platform for influencer marketing, closely followed by YouTube. India woke up to the power of Twitter a little late, so the micro-blogging site is lagging slightly behind. Facebook is somewhat ad-led so it tends to drown out the organic reach of creators.
How Is The Market Evolving?
Influencer marketing is undergoing a sea-change. It isn’t quantity that pays the big bucks anymore. The emphasis is on authenticity and quality. As a result, the tiny, yet potent voices of micro-influencers are taking centre stage.
Micro or nano-influencers are everyday social media users with follower-numbers as low as in hundreds. These content creators have credibility, are trustworthy and come with a loyal following. Consequently, they generate a much higher engagement rate than mega-celebrities.
Another transformation the industry is experiencing is how creative campaigns are designed. Previously, creators were an afterthought. A tool that brands could employ to amplify their campaign. Now, campaign and content are brainstormed with the influencer as the focal point.
What Are The Challenges Faced?
Think of influencer marketing as a bustling street of Janpath where vendors chaotically hawk their wares with no regulations in place. Shorn of verbiage, the absence of adequate organisation has seeded three challenges in the sector.
First, companies don’t understand the true influencer marketing paradigm. Therefore, they are unable to identify a befitting content creator who resonates with their brand message and audience.
Second, India is far behind when it comes to laws, codes or guides for social media influencers, brands and marketing agencies. The US-based Federal Trade Commission (FTC) published a clear list of ‘Do’s & Don’ts’ for online influencers years back. The UK has its codes to be followed by social media influencers. On the other hand, the Advertising Standards Council of India has just commenced working on disclosure rules. It makes advertising online a grey and murky territory.
Third, with significant influence comes great responsibility. That’s the last hurdle influencer marketing must jump through. When a single word from a content creator can influence thousands, if not more, they need to be more honest, genuine and real in their conversations.
What’s Next For Influencer Marketing?
Both the creator and the brand side of influencer marketing are conscious of its profound potential. What needs working is the collaboration process. It has to be more transparent where both parties can profit while building a long-term relationship.
[This is an authored article by Ankit Agarwal, Founder of Do Your Thng (DYT). All views, opinions and expressions are personal and limited to the author.]