Influencer marketing: The potential and potential problems for the brands

The industry which grew 40 percent in 2021, is keeping up its growth in 2022 with increasing revenue from Rs 900 crore to Rs 1,200-1,300 crore

Influencer marketing: The potential and potential problems for the brands
Another potential that marketers expect from influencer marketing is generating sales and conversions.

By Shiva Bhavani

Influencer Marketing, formerly seen as a trend, is quickly becoming a vital arsenal in a brand’s marketing war. Recent estimates of Indian spending are a walking testimony that shows how influencer marketing is evolving into an increasingly mainstream strategy for modern brands. The industry which grew 40 percent in 2021, is keeping up its growth in 2022 with increasing revenue from Rs 900 crore to Rs 1,200-1,300 crore.

Understanding Influencer Marketing

Influencer marketing employs leading and niche content creators and when executed properly, it is an effective way to drive quality traffic, improve brand awareness, and convey messages to a brand’s target audience. This new era of ‘mimetic’ marketing is helping customers to simplify their decision-making and inform what they think they want via their role models. This democratic media consumption is increasingly ranking high in the domain; in fact, in the name of “role models”, celebrities only accounted for 27% of influencer marketing spending. The rest of the 73% included nano, micro and mid-tier influencers because of the high relatability quotient and trust that they share with their audience.

It is becoming a huge hit in the B2C space but as millennials are one of the bigger online shopper segments, and trust influencers 12% more than celebrities, it is hard for B2B businesses as well to ignore influencer marketing’s role and as a result, many have begun applying it, too.

Now a multi-billion-dollar powerhouse, influencer marketing is a global industry table stakes for any business hoping for sustainable growth. However, in the name of influencer marketing, many are engaging in misleading advertising, resulting in the loss for both brands as well as influencer marketing stakes. To combat such issues the Department of Consumer Affairs is expected to introduce its guidelines on social media influencers, making it mandatory for them to declare the exact nature of their association with the products they endorse. And if they’re not able to prove their association, the new provisions will include a penalty of 10 lakh for first-time offenders, which could extend to 20-50 lakh for repeat offenders. The market that is poised to grow at a compound annual growth rate (CAGR) of 25% till 2025 to reach a size of `2,200 crores, this new framework will not only ring-fence the credibility of the brand and the interest of the content creator but also help to keep walking in the direction of achieving this growth rate.

Potential of Influencer Marketing

As this pay-for-performance model is empowering millions of consumers to make better purchasing decisions every day, companies can leverage this channel to build their own advertising ecosystems and create numerous revenue drivers across multimedia touchpoints.

This model is proving to be most effective because of the high level of trust social influencers have with their followers. So, when they recommend products or services, it not only leads to social validation but also drives their decision-making power.

Another potential that marketers expect from influencer marketing is generating sales and conversions. According to research, every $1 they spend on sending a message to the customer via influencers, ends up with companies earning about $18 and this number can be higher and vary for many other brands. This is the impact of influencers and that is why it is exceptionally viable for businesses to create, manage, and create messages via influencers to generate a massive uptick in sales.

Doing advertising via influencer marketing is relatively reasonable as compared with other forms of advertising. Along with opening new opportunities for brands to compete with a more efficient and optimised strategy, its benefits outweigh the cost spent on it, which in result help the brands in earning huge ROIs, boost sales and save more money.

Heavy-handed promotions and sales campaigns have simply become an outdated model for brands. Collaborating with influencers who can seamlessly combine brand campaigns into their style and expression is becoming the new norm. They offer a viable, unobtrusive way to communicate and enhance a brand’s visibility.

Potential problems of Influencer marketing

As influencer platforms are so easily accessible that they have become nothing more than a competitive arena where brands have to compete dollar after dollar to get the perfect influencer for their campaign. It results in making brands compete with each other, which ultimately ends in raising the price of campaigns.

The selection of influencers plays a very important role in influencer marketing as the performance of your campaigns depends on it. But the high number of fake influencers on social media platforms not only questions the brand’s credibility but also takes users for a ride.

One of the major concerns of about 65% of marketers is to measure performance and ROI and it takes a significant amount of time to run influencer campaigns. Hence, the only optimal way for brands to measure ROI depends on what goals they have set for any particular influencer marketing campaign. For instance, if the brand is looking to improve brand awareness, it needs to track performance indicators such as impressions and page views, if it is lead generation, the brand may have to track the number of new email subscribers.

Instead of followers, the brands should shift their focus to the quality of engagement influencers get from their audience. This not only ensures avoiding working with fraudulent influencers who artificially inflate their numbers but also ensures that the campaign they are running is reaching the right audience.

In many cases sponsored content also fails to generate the desired engagement rates as when influencers are pushing products on them, audiences tend to ignore whatever the influencer says about the brand they partnered with. This is partly the reason why brands are willing to shift to investing their money with micro or nano influencers as they would much rather see an honest review of a product than a sponsored post.


Influencer marketing is facing several problems nowadays, but with the right research and usage of influencer marketing tools, it is possible to overcome the challenges of influencer marketing. Being diligent with research, knowing what to expect price-wise, and hiring a professional Influencer Marketing Agency is essential in today’s climate. After all, brands face challenges all the time but how they react and approach these challenges determines whether they are successful.

The author is CEO and founder, Wing Communications

Also Read: Why brands should use memes for customer engagement and not product selling

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First published on: 25-09-2022 at 10:20 IST