The influencer marketing industry is in the news again. This time courtesy of rapper-singer Badshah (Aditya Sisodia) who is being investigated by the police for allegedly paying money to get fake followers and likes to promote his music, as uncovered by the Mumbai Mirror, published by the Times Group.
Fake followers and fake influencers — users who’ve gained popularity only on the back of fake followers — are not new concepts to this industry as some would rightly argue. “But a celebrity’s name coming up in a fake views scam can potentially raise doubts on the follower count of several content creators who’ve built their fanbase organically through years of work,” says a content professional at a new economy brand who wishes to stay anonymous.
Further, the issue comes at a time when influencer marketing is coming up as the fastest-growing category in the Rs 21,000 crore digital advertising space, for advertisers like PepsiCo, Under Armour, Lava, Sugar Cosmetics and upGrad, among others.
“Influencer marketing has effectively taken over the entire digital marketing space in the last few years,” says a PepsiCo India spokesperson.
Companies, especially in categories like tech and electronics, spend upwards of Rs 10 crore a year on influencer outreach campaigns, twice as much as those in the personal care and food sectors, according to influencer analytics companies.
Even as many companies in fashion, automobiles and travel — whose business took a hit due to Covid-19 — have halted ad spends, “consumption across edtech, fintech and FMCG has gone through the roof during this period,” notes Viraj Sheth, cofounder of Monk Entertainment, a Mumbai-based talent management and influencer marketing firm. “Brands in these categories that have not been able to do proper ad shoots have hiked their influencer spends by 20%-30% and some of the influencer videos have been used for digital promotions across social media accounts,” he adds.
However, the rapid growth of the industry does not, unfortunately, compensate for the issues it faces in the absence of standard industry practices and regulations. These include issues such as the lack of pricing and measurement standards, absence of contracts between many agencies and influencers, unprofessional behaviour by some creators, obsessive focus on reach instead of impact, and the tendency of advertisers to run after the same top influencers that everyone else is trying to rope in, among others.
The Chaos
Five years ago, there were just five-odd reputed agencies in this space. Today, there are as many influencer marketing firms as there are influencers.
Influencer pricing is an elaborate mess.
“A tech influencer can say they charge Rs 2 lakh per tweet and give whatever rationale they want. It could be more or even less than what they deserve, but nobody challenges it,” says Karthik Nagarajan, chief content officer at Wavemaker, a GroupM media agency.
Getting into a bidding war to rope in a particular influencer is also common if they work with multiple influencer marketing agencies. “People involved in this process end up doing more bargaining than content creation,” says a digital agency head.
Because there are no pricing standards, most influencers from tier 2, 3 cities do end up charging less than their worth, says Nikunj Lotia aka popular content creator Be YouNick. “These content creators get duped by agents who get the job of representing them just because they approached them first. They pay them a fraction of what they charge the advertisers. Because of no set pricing benchmarks, even I have both over-quoted my price and been underpaid in the past,” he adds.
The influencer industry is also notorious for its lack of paperwork, says a content professional who likens the unorganised and unstructured traits of the ecosystem to the Wild Wild West.
Many fly-by-night operators don’t sign contracts with influencers, often due to lack of resources to do all the paperwork. Then there are instances where some brands loop in unsuspecting creators into “shady contracts” as the latter can’t afford legal advice or just don’t know any better. “These contracts could say the client owns their IP. The client can use it for a lifetime without giving them a licensing fee,” says Monk Entertainment’s Sheth.
In these cases, competitors are unable to sign the influencer in future as their content is still being used by a rival company. Things get ugly sometimes as influencers don’t have the means to fight legal battles with giant companies.
Influencers can give brands a hard time, too, though. “A lot of the new influencers are young and inexperienced. Sometimes that leads to them behaving unprofessionally,” says Lakshmi Balasubramanian, cofounder of Greenroom, a Bengaluru-based influencer marketing platform.
Influencer marketing agencies also need to be operationally equipped to handle such influencers, she says. “Sometimes, a creator refuses to return the product after doing a campaign and threatens to malign the brand if they insist on returning it. Brands end up giving in fearing bad publicity.” Many influencer marketing agencies, as well as advertisers, blacklist at least 1%-2% such influencers every year.
The Order
Things are changing though. “Three years ago, approximately 70% of the brands would do blanket hiring of influencers focusing on reach and quantity. Now, only close to 30% of them do it perhaps, and the rest go for quality and higher engagement” says Gurjot Singh, SVP and national media head at Dentsu Webchutney.
Siddharth Pal, head of marketing at sportswear brand Under Armour says that brands are also realising there are too many of them in the market and consumers keep track of which influencer works with how many brands. “I would rather go with the sniper philosophy and hit 3-4 direct shots than hit 300 with a machine gun,” he says, referring to an influencer strategy focused on working with fewer creators who are deeply engaged with his brand.
The ecosystem is slowly getting over its obsession with the number of followers, too, as brands start working with macro and nano influencers who grow their social clout along with the brand’s growth.
As Madhur Acharya, senior business development manager at beauty brand Wow Skin Science says, “A large number of followers does not guarantee conversion. The selection of influencers should focus on their rate of engagement, the demographic and psychographic information, and the purchasing habits of the influencers and their followers.”
Advertisers are also increasingly favouring influencer marketing firms equipped with tech-enabled tools. It’s a big shift given that so far, this business has relied solely on the strength of the relationship between the advertiser and its influencer marketing agency, and the agency and the influencers it works with.
“With fake followers and bots being so prevalent, if an agency is able to incorporate any software to identify those bots, our preference would really increase for them,” says Mugdh Rajit, head of marketing, sales and distribution strategy at mobile handset company Lava International.
Tech also potentially gives vendors the “ability to match influencers and brands with measurable outcomes, which will lead to greater success for brands, agencies, and influencers,” says a Snapdeal spokesperson.
The New Order
Vendors are taking note and adapting.
Popular companies in the space like Eleve Media, Greenroom, Mad Influence, and a few others have developed proprietary tech tools to suit advertiser needs and deliver measurable influencer campaigns. Three years ago, influencer data analytics firm, Qoruz, developed a tech tool to help companies discover the right influencers based on their relevance, perception and engagement rate. “We now work with over 120 brands either directly or by licensing our tool for their influencer marketing campaigns,” says Praanesh Bhuvaneswar, the firm’s CEO.
Some, like Kalyan Kumar, CEO of Social Catalyzers, are even conscientiously starting their client meeting by asking the advertiser: “Should the brand be doing ANY influencer marketing at all? Does the Brand need advocacy”
Lotia, of the Be YouNick fame, seems to have found somewhat of a solution for the eternal pricing tussle after all. “When I started over three years ago, I didn’t have the option to say “no” to any price. I didn’t know how much to charge. Then I started talking to people in the industry.”
Now, when a new creator approaches him with a query around pricing, he tells them: “Think of an amount you ‘think’ you deserve and ask for four times that.”
(Illustration and graphics by Rahul Awasthi)
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