How is the festive season going for influencer marketing industry

The OND (Oct-Nov-Dec) period of the year is seen as the time for brands to get the best ROIs on their marketing investments, with no stone left unturned by companies to reach out to the consumers. Right from large campaigns to region-specific advertising, influencer marketing has become a crucial part of every brand’s marketing budget. This year, in an effort to reach audiences across the nation, numerous legacy companies too have partnered with influencers. 

With the creator economy poised to grow into a Rs 2,200-crore-strong industry in the next two years (as per GroupM), the space has become the cynosure of all eyes. An expert suggested that this year, brands have invested 2x more on influencer marketing compared to the last year. According to him, brands have become smart with their investment and have understood the game of influencer marketing which has resulted in an increase in investment. Another expert, quoting a report by Influencer Marketing Hub, shared that the BFSI sector has witnessed a 62% increase in influencer marketing spending, while e-commerce has seen a notable 63% surge.

e4m reached out to the influencer marketing industry to understand how is the season going for them and what is happening in this arena. 

Influencing the ad spends

Consumer behaviours have shifted massively during the pandemic and post-pandemic. Now, an average smartphone user spends up to 4-5 hours a day online, scrolling through numerous content on social media. Many consumers have switched to digital means to shop, and keeping this in mind, brands have also started adapting and paying heed to where the consumer is. Many e-commerce companies have seen a doubled growth in online spending and people being able to access products and services across geographies, have made it possible for online retailers to flourish. 

Seconding this, Tusharr Kumar COO of OML Entertainment, said, “This year has been notably dynamic for influencer marketing, witnessing both shifts and sustained growth compared to the previous year. The unique circumstances surrounding the pandemic significantly influenced the trajectory of influencer marketing, with a distinct pattern emerging in response to changing consumer behaviours and spending patterns.”

An expert suggested that this year, brands have increased their budget up to 2x in influencer marketing. He said that some big brands are likely to invest significantly, with figures running into several crores. For smaller, upcoming brands, influencer marketing can constitute around 30% of their total marketing spending.

Substantiating a growth in ad spending during the festive season, Yulia Aslamova, Head of Asia, DRIM Global, said, “This year has marked a significant leap in influencer marketing for us compared to last year. Our approach of building brand awareness through influencers on a CPA model has gained substantial traction. The industry has witnessed a remarkable shift, with brands increasingly allocating budgets to influencer marketing. In 2023, the spending surged impressively, boasting a robust 35-40% increase compared to 2022.”

Kalyan Kumar, Co-founder and CEO of KlugKlug said, “This year has seen a clear increase in influencer marketing investment compared to the previous year. Two key factors contribute to this growth. First, more brands are embracing influencer marketing, leading to an overall increase in investment. Second, existing brands are not only continuing their investments but are also allocating additional funds as they identify scalable models with influencers that deliver better ROI.”

However, giving an alternate view, some experts suggested that not much growth has happened this year owing to the diversification of media. Kumar of OML said, “In the current year, we've observed a normalization of influencer marketing investments as marketers and media planners have diversified their budgets across various media channels, including out-of-home (OOH) and experiential events. What's fascinating is that influencers continue to play a crucial role even in non-digital media”, he added.

Shivam Agarwal, co-founder, Kromium, said, “This year has been a little slower for influencers and influencer marketing owing to the World Cup. Brands are more focused on grabbing eyeballs there.”

ROI in place?

Experts suggested that even though the investment in influencer marketing is slow, the delivery by influencers has always been substantial to the business. Many brands also go for performance marketing when it comes to collaborating with influencers while many brands like Myntra and Nykaa have created their own influencer programmes in order to promote influencers and the business making it a win-win situation.

Agarwal of Kromium said that the average ROI on influencer marketing is 7x. To give an example he said that they have sold tea worth INR 2.75 lacs through a single YT video in which the brand invested only INR 45,000. While Kumar of OML said, "Our digital agency business - the Global Creator Network has driven over 6X ROI on digital marketing campaigns using influencers when compared to what other social media investments have delivered for brands."

Speaking about ROI Aslamova of DRIM Global quotes a survey by Influencer Marketing Benchmark Report reveals that businesses are earning an average of $5.20 for every dollar spent on influencer marketing, showcasing a compelling return on investment.

Kumar opined that notably, influencers are increasingly adopting incentive and affiliate models to enhance ROI, particularly on platforms like YouTube. “Surveys indicate a growing trend, with 47% of respondents attributing their product purchases to influencer recommendations in 2023, up from 27% in 2019”, he added.

While Preety Singh, Co-Founder and Managing Director of Boomlet Group had a different take on ROI, she said, “Beyond the quantitative measure of ROI, influencer marketing plays a pivotal role in shaping brand perception by establishing a direct and engaging communication channel between brands and their target audience through content creators. Influencer marketing fosters a strong brand presence and resonance to the audience. The heightened visibility achieved through influencer marketing on social media platforms contributes significantly to effective brand building.”