EY'S Amiya Swarup dissects influencer marketing, role of ASCI and media agencies
Amiya Swarup, EY partner says that sectors like automobile, FMCG, ecommerce, BFSI will majorly foray into influencer marketing.
Highlighting the influencer marketing trends in India, the latest report by EY and Collective Artists Network’s Big Bang Social indicates that the industry is poised for significant growth. Influencer marketing in India is expected to surge by 25 percent in 2024, reaching Rs 2,344 crore, and further expand to Rs 3,375 crore by 2026, according to the 'The State Of Influencer Marketing in India' report.
The report highlights a crucial insight: with 50 percent of mobile usage dedicated to social media platforms, integrating influencer marketing into communication strategies is essential for marketers. In addition, it is expected that there will be 740 million active smartphones in India by 2030. Consequently, three out of our brand strategies are expected to include influencer marketing.
In an exclusive interview with EY partner Amiya Swarup, Storyboard18 digs deeper to dissect how marketers are leveraging both large/macro and micro/nano influencers equally, and brand ambassadors and influencers are significantly influencing purchase decisions.
Edited excerpts:
What are some key revelations in the report?
With 50 percent plus of the time spent on mobile phones and on social media, influencers act as a very critical aspect for a marketing strategy. About five years back, digital marketing used to be 2 percent of the media investment or media share. Currently, for established brands, it's upwards of 20 percent and the digital first brands, it's as high as 80-90 percent on digital marketing. About 40 percent of the brands which we interviewed have less than 2 percent of media spends share on influencer marketing and equal number of brands have in the range of 2 to 10 percent. A lot of brands who are not investing in influencer marketing will foray into influencer marketing and a lot of brands who are investing a minimum of 2 percent will move to the higher bucket and the brands which have really evolved and understand the influencer marketing landscape will move even further up.
Which sectors will increase their spending on influencer marketing the most?
Our study has shown that lifestyle is one sector, which is really high on investment. But what we really anticipate is automobile, FMCG, ecommerce, BFSI. These are all brands sectors which require a lot of level 2 and Level 3 of conversations or to create engagement with their consumers. Going forward, we see substantial rise in these sectors.
How significant is the role of agencies in implementing influencer marketing strategy?
Media agencies play a very critical role; these are media and strategic advisers to the brand and they are in the forefront of newer solutions and newer products. They understand how influencer marketing is evolving across sectors, choose the best practices and best outcomes because at the end of the day, the marketing outcome has to be measured. A media agency plays a very critical role in driving an influencer marketing agency. Agencies are in the best position to demonstrate integrated marketing for incremental reach. Agencies understand the impact of television, digital, and print on influencer marketing.
Could you share some insights on this trend of brands approaching nano influencers to drive campaigns?
Historically, we've always seen brands wanting to reach out to tier 2 and tier 3 cities in India. There has been a lot of upswing on regional media, which the brands are now using to reach to the non-urban landscape and that's where I think influencers especially micro and nano influencers play a very critical role. A lot of mediums are really realizing that they have a lot of influencers.
Take radio for example; there the radio jockeys (RJ)are influencers. These RJs are talking to a very local population and they have a very strong loyalty to the RJs thus turning them into huge influencers. Macro influencers have a very high reach because they create a lot of buzz and very high decibel campaigns. But micro and nano influencers are playing a very critical role in creating the engagement in non-urban cities. Our study really shows that micro and nano influencers have very high level of engagement rate when compared to macro influencers.
What factors do you see contributing to the growth of influencer marketing?
For any media investment, one needs to consider measurement and outcome. It will only make sense for a brand to invest in any medium provided there is a major outcome, thus the ecosystem has to evolve into going beyond just posting. Secondly, the mass is spending over 50 percent of the time on social media; the brands are really looking for avenues to reach out to people like you and me within the digital marketing domain. One can really slice and create multiple cohorts with very specific marketing communications which will probably get us excited to know more about the product and influencer marketing is something where that domain really works very well.
Thirdly, there are about 3 and half to four million influencers creators in India today. Our study has been on the influencers who have a little over 100 followers because we think that those are the kind of influencer who will be able to monetize their content. There is a huge bunch of influencers who are sitting on the other side of this fence who are waiting to get into monetization of content, the ones who are already doing that, they want to up their game by increasing their followers get more brand partnerships to drive their business and with a lot of support, which the government is giving, there's a lot of support with the brands as well. All these factors will contribute tremendously towards the growth of influencer marketing economy in India.
What are some key challenges that need to be addressed currently in influencer marketing?
The most critical aspect is really driving authenticity on the influencer marketing content. You see a sponsored ad and suddenly you do have a level of distrust. However, you will not have that when you see the ad on a television commercial with a brand celebrity.
Over a period of time, the influencer marketing landscape will evolve in terms of the influencers gaining trust of the audience.
We surveyed more than 100 brands and 500 influencers and we also surveyed 1500 individuals like you and I. 92 percent of said of them said that they actually follow what the influencers are saying. 77 percent of the respondents said that the influencers actually help them decide on buying a product or not. These are very credible and strong indicators that influencers are purely driving a lot on the commerce side as well.
It is important that the influencers stay authentic and drive transparency. ACSI is playing a very critical role in building regulations; they have a guideline which clearly says that if there is a product awareness or engagement which is created, it should be tagged as AD or sponsored paid partnership so that the audience is aware that the influencer is getting paid for it.
In the past few years, we have seen some celebrities buying followers. Thus, brands always take a back seat in this case; they don't really trust the numbers which an influencer is claiming to have. Therefore authentic engagement is crucial.
