The evolution of influencer marketing 3.0 in 2022

A report on India’s Influencer Marketing industry by GroupM and Exchange4media Group says more than 400 million Indians had access to social media before the pandemic. This number has skyrocketed and there is a significant shift in consumer behaviour Image: Shutterstock

As the world enters into an uncertain 2022, one fact is certain that our lives will increasingly and predominantly remain digital. An increase in digital spends means that India’s digital advertising market is expected to grow ~10x in the next 10 years. ‘Influencer marketing’ would play a significant role in this as it continues to dominate digital marketing plans. We may live in the metaverse, but it is the real influencers whose lives we follow to make hard decisions about where we spend our money.

Influencers create content—which is the panacea for standout success that marketers are after. The impact and reach of influencers have grown in 2021. As brands try and engage the consumers via influencers, Facebook said influencer marketing is set to reach $13.8 billion in spends in 2021.

Twelve studies of five verticals in the Asia-Pacific region done by Facebook found that pairing branded content ads with day-to-day campaigns led to a 40 percent higher click-through rate, 87 percent higher likelihood of more content views, and 80 percent likelihood of more purchase conversions 4X lift on purchase conversions, on average.

A report on India’s Influencer Marketing industry by GroupM and Exchange4media Group says more than 400 million Indians had access to social media before the pandemic. This number has skyrocketed and there is a significant shift in consumer behaviour. The top 4 categories i.e., Personal care (25 percent), F&B (20 percent), Fashion & Jewelry (15 percent) and Mobile and electronics (10 percent) contribute 70 percent volume of influencer marketing. Celebrities contribute 27 percent while influencers contribute 73 percent and nearly two-thirds of the Indian population follow an influencer.

How to find the right influencers?

This is reason enough for brands wanting to connect with consumers directly. The influencers are no longer a homogenous group of those with a humongous follower base. New research says that micro-influencers, which have less than 25,000 active influencers, are driving far more engagement than big-ticket accounts. Their followers trust them and assess them to be more authentic. The digital game is tricky to play and hard to maintain.

According to management consulting firm Redseer. there are about 210 million internet users in India who consume content in vernacular languages. Hence, brands are also focusing on working with regional influencers who communicate with the target group more effectively.

In conventional terms, an influencer is a person who gains a reputation within a community with which they can influence others in terms of the content they consume or the products they use. Anyone, with a significant social media following on Instagram or YouTube, with a dedicated and loyal follower base and a grasp of good content can become an influencer.

The growth pivots for influencer marketing can broadly be defined in three phases. The first phase involved the leveraging of social media to showcase talent in any area ranging from artistic skills or a great domain knowledge about any specific topic. This worked as a proving ground for many who wanted to test and enhance the skills with minimal effort or expense. The next phase was when brands started to track how these individuals could actually “influence” the opinion of their followers or fan base. This led to the monetisation of these platforms as companies started to realise this as a capitalising avenue by exhibiting their products or paid partnerships.

Influencers 3.0

The hunted now seems to be becoming the hunter. Realising that their own popularity can be capitalised better by peddling their own goods, some influencers have started to incubate their own brands beyond their endorsement gigs to gain a steady and continuous source of income.

These newly formed ‘influencer owned’ companies range from clothing, accessories and even to selling online courses and workshops in their area of expertise. These entrepreneurial influencers have built their own brand value and encash it through their line of products or services. This model helps them to uniquely engage with their community more effectively, especially when people are subconsciously driven towards products that give them a feeling of uniqueness. These products become a point of differentiation for their followers thus increasing their reach through word of mouth for both their content and their products.

The supply chain network is now so much easier and provides last-mile delivery at a much more affordable cost and with reliable infrastructure. This essentially provides small businesses to cater to a wider market without much concern or investment in logistics.

There are numerous examples of these influencer-entrepreneurs: Madhura Recipes by Madhura started as an Instagram page and a YouTube account where she would teach cooking through her videos. With over 5 million subscribers on YouTube and 350k+ Instagram followers, she has also launched her own spice mixes that she sells through her Instagram page and Amazon. Even micro-influencers are milking this trend. Neha Sood is an Instagram model with 25k+ followers. She also owns a fashion brand 'Your Mine Story' that she mainly retails through Instagram. Growth School is an online platform for upcoming digital marketers or individuals who want to learn brand building by Vaibhav Sisinity, a growth hacker with 3 Lakh+ followers on LinkedIn. And this is not just constrained to social media celebrities but has been a practice followed by some prominent celebrities such as Nushke by Paras, an ayurvedic cosmetic brand by actor Paras Tomar; Kay beauty by Katrina Kaif to name a few.

Even service network establishment through these channels is a common practice. Siddhant More, a marketing enthusiast and the founder of Mad Over Marketing, now has a consultancy firm and also takes online workshops and courses on how to better market penetration. Baba Ramdev started this trend when he used his own brand value to market Patanjali and made it the fastest-growing FMCG brand in India.

Influencer success can be transitory and the life cycle can remain fickle. However, the key element to influencer reputation is trust and the constant creation of good content. They make hay while the sun shines and burn the candle at both ends, churning content relentlessly while staying relevant and on-point, until someone more crackling comes about.

Vineeta Dwivedi teaches and is head of Digital Communication at Bhavan’s SPJIMR. Raghav Ralhan is pursuing PGDM at SPJIMR.

[This article has been reproduced with permission from SP Jain Institute of Management & Research, Mumbai. Views expressed by authors are personal.]