How regulations can help build a safer ecosystem for influencer marketing
October 2, 2020 6:47 AM
It has been observed that various international influencers have less than 1% audience engagement, although they have a huge fan following
Globally, the influencer marketing industry is expected to reach $10 billion by the end of 2020
By Neel Gogia
There are barely a few industries that have grown during the pandemic, and influencer marketing is one of them. Globally, the influencer marketing industry is expected to reach $10 billion by the end of 2020. It clearly shows how advertisers are increasing their spending on influencer marketing every year.
This is the only medium that can provide brands with brand awareness, reusable content, traffic, conversions, help in establishing credibility, and build trust via one single content piece. That’s why, the average earned media value for every $1 spent is approximately $5-$6; and thus, brands across categories, especially in India, have started using influencer marketing in the last couple of years on a bigger scale.
Owing to the exponential growth every year, many people are joining the race of becoming an ‘influencer’. Though most of them have an agenda — to provide value and grow their audience organically — there are others who want to attract brands and start making money soon. Since brands have little information and there are no systems or mechanics to shortlist an influencer, various influencers have taken unethical steps like buying followers/likes/views, etc, to attract brands.
A few more regulations and changes can help build a safer ecosystem for influencer marketing. Brands and agencies should have a checklist, and must use digital tools to analyse every profile they plan to shortlist, and make sure that their reach is organic. Even if your influencer has millions of followers, a blue tick, or has worked with top brands in the past, if their reach is paid, you are ultimately wasting your money to get visibility of dummy profiles or bots. One should not assume the authenticity of any profile on the basis of the points I mentioned above; however, most brands and agencies are still not aware of this and end up spending on such influencers.
YouTube is another platform that attracts brands, because of the number of views and subscribers of a channel. But buying paid views on YouTube is as simple as sending a WhatsApp message to your friend. Any experienced agency can easily figure this out via video insights of every creator, and analyse that data to figure out the authenticity of their views.
It has been observed that various international influencers have less than 1% audience engagement, although they have a huge fan following. This check-up needs to be done at a global level, since the problem exists worldwide.
Fair and square
Apart from checking authenticity, transparency in pricing is another parameter that can be implemented. The fee charged by two influencers with the same amount of views and reach could vary by 100-200%, depending upon their content and the kind of audience each of them is targeting. Influencers with great organic reach undercharge, since they are not aware of market prices and their impact. But it’s important for brands to get an idea of the actual cost of an influencer. Since there are many middlemen involved — from talent-management agencies to influencer marketing agencies — brands might not have clarity on the fee charged by an influencer.
The rapidly growing influencer marketing industry has now caught the government’s attention. The new guidelines mention that endorsements must be based on either adequate information about or experience with the service or product being endorsed. What this means is that influencers and brands will now have to take more accountability for their claims, guaranteeing, and strengthening the authenticity of the products. In the long run, this will lead to more accountability in the digital marketing industry.