It’s a great time to be an influencer on Instagram or TikTok in India

Move over Bollywood stars, social media celebrities are taking the advertising world by storm.

By 2020, global influencer marketing is poised to be a $20 billion industry. Of this, India accounts for a fledgling chunk of between $75 and $150 million.

In a way, it is a modern-day version of traditional celebrity endorsement. Brands collaborate with “influencers” who have a loyal following and could sway their followers by plugging ads into their content.

Most brands in India have allocated between Rs 1 lakh and Rs 10 lakh ($1,409-$14,091) each as their influencer marketing budgets this year, according to a recent survey. The sizeable splurge is only going up, with 72% of Indian firms planning to increase their spends on social media influencers, big and small, in 2020, the report said.

The survey, conducted by American social listening and analytics software firm Talkwalker and social media news portal Social Samosa, included 800 respondents between July and September 2019.

A brand’s main draw? Increasing brand visibility.

“Influencer-led marketing is the fastest-growing segment under digital (advertising), and we’re seeing brands in India, across sectors, becoming serious about it. Budgets are moving from experimental to planned/dedicated spends, which is great for the ecosystem to grow,” said Pranay Swarup, co-founder of Mumbai-based influencer marketing company Chtrbox. “(The) year 2020 is when it becomes a lot more strategic than tactical, with creative campaigns and content being built around influencers versus influencers being an almost afterthought to amplify content.”

While the model for influencer marketing remains malleable from industry-to-industry and brand-to-brand, the trend is only set to explode.

Influencing brands

Due to the personal review and recommendation aspect, beauty and fashion firms are among the top spenders on influencers, experts say. But the concept isn’t limited to these sectors. Recently, even fintech and gaming companies, like Paytm and Junglee Games, have jumped on the bandwagon.

And different brands have different goals. “Brands expect either user acquisition or quality content. For (food-tech firm) Zomato, it’s user acquisition. For (footwear brand) Bata, it’s great quality content. For (consumer goods company) Marico, it’s again content. For Junglee or other gaming brands, it’s user acquisition,” said Apaksh Gupta, founder and CEO of Gurugram-based influencer marketing company One Impression.

When it comes to choosing the right platform for influencer marketing, Instagram, YouTube, and TikTok are the favourites, Gupta said. Even the vernacular content sharing app ShareChat is doing well – especially among fintech companies that are using it to reach tier-2 and tier-3 cities.

Meanwhile, Facebook and Twitter are losing traction, as brands look for returns from the campaigns. “Facebook has become a very ad-led platform with little organic reach for influencers and content creators. Twitter is a very niche category, and it’s too opinion led,” he added.

Tracking progress

A few years ago, Gupta would’ve described the influencer marketing industry as “painful and disorganised”. Even now, nearly two-thirds of brands from the Talkwalker-Social Samosa research said they lack the tools to measure the returns on their investments.

Firms like Gupta’s One Impression, though, are working with brands to make the game more strategy and less gamble.

On Instagram, brands can track clickable links through people’s stories or bios to see the source of traffic clearly. On other platforms, a coupon-code mechanism works. “For a Zomato-Tiktok campaign, influencers shared an exclusive coupon code to make their first purchase,” said Gupta. “We could see 1,500-2,000 people using the code in a matter of two days. So, you can say ‘we spent X amount of money to get Y amount of new users’.”

Besides this direct quantifiable performance, it’s assumed that everything has a ripple effect on the internet. To assess that, there’s Google Analytics that tracks organic brand search. Sometimes, brands can see their user base increase right after a campaign goes live, compared to the week before.

Sometimes, you can’t put an exact number on it, but you see it as engagement through likes, views, shares, and comments, and the word-of-mouth it generates.

But one thing is certain – for the desired results, picking the influencer is crucial.

Choosing talent

Historically, brands have selected influencers on the basis of their fan following. However, this has changed recently, particularly in light of the fact that followers can be bought. A study has found that Indian influencers on Instagram have 16 million fake followers.

What’s more, the bigger the celebrity, the more the cost. Celebrities such as actor Priyanka Chopra, and national cricket team captain Virat Kohli, with 45 million and 42 million followers on Instagram, respectively, charge well above Rs 1 crore per post. Meanwhile, influencers with over 500,000 followers charge up to Rs 7 lakh per post and nano- and micro-influencers, who have less than 5,000 and 30,000 followers respectively, charge Rs 8,000 and Rs 18,000 per post.

Of course, with great power comes great responsibility. Since influencers with avid fanbases have the ability to sway large audiences, the Advertising Standards Council of India is keeping a close watch. The ad regulator is working on guidelines for social media influencers who promote products on the internet to help end-users make informed decisions regarding their online purchases.

At this time, quality and creativity are taking precedence over follower counts for brands, too.

“A Nat Geo photographer may be credible enough to shape someone’s decisions related to travel but maybe not for beauty products,” said Amaresh Godbole, CEO of marketing and technology agency Digitas. “A consumer who is an avid brand advocate may not have many followers, but their story could be compelling enough to promote.”

For this reason, regional languages are also gaining traction. “A year ago, no brand was looking for an influencer who speaks Tamil or Kannada,” said Gupta. “Right now, we’re extensively doing content for different brands in different languages.”

To find the right fit for a brand, One Impression is relying on data.

Its data science team serves up a platter of suitable influencers using APIs for social media platforms to filter on various levels – predicting success of future campaigns based on past ones, using pricing algorithms to figure out costs, checking engagement rates, running category, and image searches to make sure the influencer suits the product, checking for keywords in bios, and so on.

Instead of collaborating with one influencer for a one-off campaign, brands have also started creating long-term associations for bigger and more meaningful impacts.

Despite the awakening, experts feel authenticity is still lacking.

“Right now, it (influencer marketing) resembles a busy street where vendors are hawking products and services left, right and centre,” said Karthik Srinivasan, an independent communications consultant. “Hopefully, it can be more experiential, where influencers offer their views on products and services after their personal experience, without bias.”

This article first appeared on Quartz.