Brands bow to influencer marketing power, but look for tangible returns

Topics Marvel | YouTuber | Instagram

During a recent media preview of a Marvel superhero movie in an upscale neighbourhood in Mumbai, the lobby of a multiplex was stacked to the brim with media persons, actors, celebrities and such others on one side of a cordoned ring and a horde of screaming teens on the other. The crowd was restless, pointing out and waving to their favourite stars as they walked in; but then, in walked an unassuming young girl and within a moment, she had sucked all the air out of the room. Many (ignorant of the ways of new media) struggled to figure out who she was, but as a sea of young faces rushed for a selfie, her name made its way down the whisper trail.

Meet Prajakta Koli, a YouTuber who has amassed huge views for her home-made videos about growing up in a middle class family. She goes by the screen name MostlySane and is a sought after brand influencer.

Social media influencers are of immense interest to brands because they open up a demographic that most are uncertain about, offer long term engagement and a chance at ‘virality’ for ad campaigns. And as their sway over the young grows, influencers are also grabbing larger spots on the endorsement turf, even displacing some big actors and celebrities from their well-entrenched grooves.

Influencers thrive on creating a “tribe” of followers with specific interests and preferences, which in turn can be marketed to brands. And their ability to build bigger tribes has increased phenomenally with the rise of social media platforms and also with YouTube democratising the process of video and content sharing.

However, the community of influencers is drawing flak for its inability to sift the real from fake. Many influencers have built their reputations on fake followers, duping brands into a false sense of reach and impact over their campaigns. Marketers are therefore asking brands to exercise greater caution when it comes to spending on infleuncers.
“Influencer spends currently are campaign driven. However, more and more brands are moving towards business-driven influencer marketing. We are expecting incremental spends on influencers, however that increase will come when there is tangible ROI,” said Harsh Shah, senior vice president, Dentsu Webchutney.

A recent Influencer Market Outlook report by Buzzoka reported that the increasingly blurred lines between influencers with fake and real followers has meant that brands find it safer to engage with via agencies. Instead of signing them up directly, as was the case until recently. Most brands (especially the big consumer brands) want the agencies to measure returns on their investment on infleuncer-led campaigns. Especially since budgets have expanded significantly.    Most brands spend anywhere between $50,000 to $1,00,000 on influencer campaigns and in some cases, even go up to $5,00,000. The increased spending has come about as brands have come to value the power that influencers wield, 65 per cent respondents noted that influencers help find better quality customers.

According to the report, Instagram and Facebook are the most preferred influencer marketing channels. During a recent Instagram Experience event, Vishal Shah, its VP-Product said, “We are creating insights on both sides of the ecosystem, for influencers to figure out what may or may not work and for brands to figure out the reach they actually get.”  

The fears about influencer data being massaged or being simply cooked up has been exacerbated with the release of research reports such as the one by Swedish e-commerce start-up A Good Company and data analytics firm HypeAuditor. The report found that the three regions with the most fake accounts on Instagram are USA (49 million), Brazil (27 million) and India (16 million). Both brands and social media platforms are heeding the alarm bells.

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