Why influencer marketing in India is a double-edged sword

India’s booming digital landscape has fostered a powerful marketing tool – influencer marketing. But with great power comes great responsibility, and navigating the influencer terrain can be tricky. In this indepth report, Adgully delves into the complexities of influencer marketing in the Indian market. We will explore the challenges that brands face – from inflated follower counts to murky sponsored content disclosures. Influencer marketing in India is a double-edged sword, handling it with care helps brands harness its power for brand success.

In today’s digital age, influencer marketing has become a powerful tool for brands to connect with consumers. However, navigating the influencer marketing landscape in India can be complex. This two-part series by Adgully dives deep, aiming to unravel the various aspects of influencer marketing and empower brands to navigate this maze successfully.

The Challenges

The world of influencer marketing in India is fraught with challenges, presenting complexities in many different areas.

Influencer marketing in India presents a complex yet promising landscape for brands aiming to connect with diverse audiences, points out Ritesh Ujjwal, Co-Founder, Kofluence.

“With the country’s rich linguistic and cultural diversity, effectively engaging consumers demands a nuanced strategy that acknowledges regional nuances with localized campaign solutions by tapping into the potential of regional nano and micro content creators. The democratization of content creation, fueled by major tech players like Google, Meta, Alphabet, and emerging entities such as OpenAI, has empowered individuals to share their creativity with a global audience. With just a camera in hand and a spark of creativity, one can turn pixels into influence and ideas into inspiration. However, despite this explosion of content, the influencer marketing industry remains largely disorganized and fragmented. Content creators still grapple with hurdles in generating sustainable revenue streams, often managing multiple communication channels and diligently following up with partners for timely remuneration,” he explains.

Cultivating trust and authenticity is central to the success of Indian influencer marketing endeavors. As audiences increasingly scrutinize sponsored content, establishing genuine connections with influencers becomes crucial. Brands must carefully select partners that authentically resonate with their values and target demographics while ensuring compliance with regulatory standards. Moreover, challenges such as the prevalence of bots and fake followers among influencers, coupled with the lack of standardized performance metrics, pose significant obstacles for brands seeking accurate campaign measurement.

Unlike conventional advertising channels, Ujjwal adds, influencer marketing operates within a less regulated framework, lacking a universal marketplace or standardized pricing structure.

“This lack of standardization is influenced by various factors, including the unique nature of campaigns, the wide spectrum of influencer niches, and the individualized approach to content creation. However, amidst these challenges, there exists an opportunity for brands to leverage technology and automation to overcome barriers and unlock the full scale of influencer marketing in India,” he says.

Anish Mehta, Founder, Animeta, points out that challenges include discovering suitable influencers due to the absence of a centralized database, performance-linked pricing, and comparative data. “Operational hurdles include transparency issues, multiple middlemen, and complex coordination. Process challenges involve delayed payments, double-dipping at agencies, and the lack of real-time performance tracking. Addressing these issues necessitates strategic solutions and industry collaboration,” he adds.

Manoj Jain, Founder & Chief Business Officer, ROI Guru, a data-driven marketing consultancy, lists out the following complexities:

• Anyone is selling anything:I have come across many channels with millions of subscribers. In the case of roasters, they are promoting financial products, which they themselves don’t understand. As the message is coming from the folks’ people love and admire, it becomes natural for the people to take their endorsement seriously and act on it.
• Fake likes and views:This is the biggest pain area. This practice is still rampant. You buy views from unauthentic sources and inflate social profiles so that you can turn into an influencer. The best way to trace such influencers is to check their engagement, such as their number of likes, views, comments, etc. Big corporations are smart enough to catch these fish, but smaller ones fall for this trap due to less awareness.
• Flood of influencers:The influencer wave started a few years back and is gaining momentum. Everybody wants to be an influencer, but they miss one point: i.e. content relevance and quality. In order to earn money fast and get celebrity status they create stingy and nonsensical content. Their loyal viewers are also following the same path. So, the internet is flooded with useless content just because “influencers” feel cool. It is more of a pandemic than a true strength.

According to Jain, influencer tactics may not have a long life because of the following reasons:

• Content aesthetic, relevance, quality and most importantly, ability to connect and inspire people to take actions.
• Too many influencers will influence each other. Something like, You influence me, and I influence You and make fools of companies. This is not going to happen.

When something is consumed in excess, it loses its relevance, so influencing marketing approaches are bound to bite the dust in the near future. In the 90’s, every youngster was opting for engineering or medical courses. Then came the flood of engineering and medical colleges. In today’s time, not many want to pursue these courses. Why? Because of over-consumption and poor quality of education.

To address concerns, brands should implement stringent vetting processes to authenticate influencers, enforce transparent disclosure guidelines for sponsored content, and leverage advanced analytics tools to accurately measure ROI and campaign effectiveness, says Ramya Ramachandran, Founder & CEO, Whoppl. Today, there are several tools which show the active followership of influencers and their engagement with recent campaign performance metrics.

Navigating influencer marketing in India involves grappling with diverse cultural nuances, language barriers, and varying levels of digital adoption, posing challenges in effectively reaching and engaging target audiences, says  Ramachandran.

Brands need to know...

Brands face a multitude of issues when it comes to engaging influencer marketers. They needs to address concerns about fake followers, sponsored content disclosures, and measure the effectiveness of influencer campaigns.

Nowadays, points out Ritesh Ujjwal, it has become increasingly effortless for influencers to purchase fake followers, ultimately creating an inflated impression of their reach and engagement. “Such activities can go unnoticed, especially with the emergence of bots. Brands often discover that they have collaborated with influencers who possess fake followers only after selecting them for campaigns. However, the advent of influencer marketing platforms incorporating AI-powered matchmaking has made it feasible to analyze and choose influencers more effectively, detecting such abnormalities and rendering the industry more reliable for brands. Platforms like these have the potential to increase transparency in the industry,” says Ujjwal.

According to him, promoting transparency and ethical marketing practices not only safeguards the reputation of brands but also aligns with India’s evolving regulatory landscape.

“While India has made significant strides in developing compliance requirements for influencer advertising, understanding the impact, implementation, and enforcement of ASCI’s Guidelines and CCPA’s directives will require time. Moreover, to maximize the effectiveness of campaigns, brands can also explore actionable insights derived from relevant performance metrics. Using performance-based campaign models incentivises influencers to deliver results aligned with campaign objectives, going beyond vanity metrics to uncover more profound insights into engagement and return on investment. By leveraging advanced analytics to track key performance indicators such as engagement rate and conversion rate, brands can accurately assess the impact of influencer collaborations and make data-driven decisions to refine future strategies.”

“The only parameter is to check engagement (likes, comments, and views), and that should be in comparison to traffic. For example, if a particular video is seen by 100,000 people, but the number of likes are around 100–200 and 50 comments. It is a clear indication that these followers are fake. Companies need to be vigilant and do homework before selecting influencers,” says Manoj Jain.

“If YouTube or other streaming platforms can reveal the IDs of viewers, then measurement can be moderately accurate. Also, it will show that who has watched the entire video, it implies that new and potential prospects data is available. Get in touch with them and do the needful. Having this data will help determine the ROI moderately. Unfortunately, we need data to ensure the effectiveness of the campaign. But these leading social platforms won’t share it. Even if they try to do so, the government won’t let them do so to ensure that privacy compliance is not falling apart,” he adds.

“Currently, for identifying fake followers we employ a metric called ‘authentic audiences’ for each creator,” informs Anish Mehta, adding, “This metric integrated into our platform’s filtering system, assigns a percentage to each creator representing the authenticity of their followers. For instance, a creator with 88% authentic followers indicates that 88% are genuine, while 12% may consist of fake, farmed, or bot followers. Detecting such non-genuine followers involves a comprehensive scientific process to ensure accuracy and reliability.”

“As far as sponsored content disclosures are concerned, we are committed to adhering to government-mandated requirements and disclosures for sponsored content in our influencer marketing campaigns at Animeta. To ensure compliance, we incorporate mandatory tags/hashtags such as #paidCampaign or #Sponsorship during the briefing stage. These tags are not only added on the platform, but also included in the content creator’s actual post,” adds Anish Mehta.

“Measuring the effectiveness of influencer campaigns is pivotal in our focus on ROI at Animeta. ROI, or Return on Investment, and ROAS, Return on Advertising Spend, are central to understanding a brand's objectives in content marketing. Brands typically aim to target various stages of the marketing sales funnel, from building awareness to driving product purchases. For campaigns focused on awareness, key performance indicators (KPIs) may include metrics such as views, engagement costs, brand recall, share of voice, and brand lift. By aligning with brands to define objectives and KPIs tailored to their marketing funnel stage, we facilitate efficient and impactful campaign measurement, ensuring a clear focus on ROI,” Mehta adds.

(Part 2 of this report will explore the best practices brands need to follow to foster trust and build genuine connections with their target audience.)