India’s influencer marketing industry to swell to ₹34 billion by 2026

  • Massive digitization, a surge in internet access and high social media penetration have fuelled growth in consumer affinity to influencer marketing. But with the growth of micro influencers, the stage is set for these creators to be compensated based on how their content drives specific outcomes.

Lata Jha
First Published12 May 2024
With the growth of regional and micro-influencers, the stage is set for these creators to start receiving compensation based on how individual posts and videos drive specific outcomes like say, brand sales.
With the growth of regional and micro-influencers, the stage is set for these creators to start receiving compensation based on how individual posts and videos drive specific outcomes like say, brand sales.

India’s influencer marketing industry is expected to swell to 34 billion by 2026, from 19 billion in 2023, as businesses increasingly turn to social-media influencers to drive sales and deepen brand connect, a recent Ficci EY report said.

While Instagram and YouTube are the platforms of choice, smaller platforms such as Snapchat will also increasingly be used to reach out to niche audiences.

Massive digitization, a surge in Internet access and high social media penetration have all fuelled growth in consumer affinity to influencer marketing. However, with the growth of regional and micro-influencers, the stage is set for these creators to start receiving compensation based on how individual posts and videos drive specific outcomes like, say, brand sales.

Also read |  India’s surging influencer marketing industry to hit 3,375 cr by 2026

“Influencers are uniquely positioned to provide audiences with exactly what they want compared to brand-led advertising. The space of celebrityhood in the world of advertising and entertainment that was primarily dominated by actors, sportspeople, models, musicians and so on, has given way to include people who started their careers as creators and influencers,” said Tusharr Kumar, chief operating officer of media and entertainment organisation OML Entertainment. 

Dedicated budgets

Brands are working with influencers to create regular content and collaborate on product launches, with dedicated teams and budgets for influencers, said Rushabh Shah, lead, paid collaboration at OPPORTUNE, a data-driven influencer-marketing platform. Instead of solely focusing on macro influencers, brands are now tapping into the power of region-specific influencers who hold a strong sway within a particular geographic area, Shah said.

Also read | Politics meets podcasts in influencer universe

“Brands and streaming platforms are fully embracing influencer partnerships. They're cost-effective, reach the right audiences, and feel genuine—like receiving recommendations from a friend. Influencers are also adept at crafting stories that resonate and go viral, while instant feedback enables brands to adjust strategies swiftly,” Rahul Khanna, founder of influencer marketing agency Barcode, said.

As more MNCs realise the importance of the creator economy, the segment could turn into a must-have for larger corporations, said Vijay Subramaniam, founder and group CEO of talent management agency Collective Artists Network, who sees more creators from beyond the top 10 metros making their presence felt.

Also read | Streaming platforms, influencers tie up for ad-led model

While influencers are already reaping the benefits of social e-commerce, gifting, subscription-based content and livestream shopping, there could also be an increase in offline communities that come together thanks to online conversations, such as health and fitness groups, influencers creating their own podcasts, closed group chats and fan meets. 

Open to explore

Mayank Vora, co-founder of digital marketing agency Logicloop, said influencers can explore emerging sectors such as sustainable living, mental health advocacy, or digital wellness, promoting relevance through partnerships with mental health groups, digital detox retreats, and eco-friendly enterprises.

To be sure, apart from Instagram and YouTube, several niche platforms are gaining popularity in the Indian influencer market. Apps like Snapchat, and Moj are making waves, especially among younger audiences of different niches by offering short-form video content and augmented reality filters.

“Additionally, platforms like Reddit and Discord are becoming increasingly popular for gaming influencers and communities, providing avenues for gamers to connect, share content, and build their audiences,” said Pranav Agarwal, co-founder, SW Network (Sociowash), a digital marketing agency.

Also read |  Influencers turn entrepreneurs banking on digital fame

Industry experts point out that currently, brands typically evaluate influencers based on several key metrics, including the influencer's audience demographics, views, average engagement rate, likes, and comments.

These factors contribute to determining the influencer's worth, often calculated through a cost-per-view (CPV) or engagement-based model. However, as competition heats up, the revenue model would pivoting towards performance and smaller influencers are demanding an equitable chance with a focus on results, Mitesh Kothari, co-founder and chief creative officer at digital agency White Rivers Media, said.

Growing trend

“There's a growing trend towards a more performance-based remuneration model, especially for smaller influencers. This shift could involve compensating influencers based on their ability to drive specific outcomes, such as clicks, conversions, or sales. However, implementing such a model may face challenges within the industry, particularly if influencers, especially those who are market leaders, are hesitant to adopt it,” said Arpan Soni, founding member, and vice-president of creators management, IPLIX Media, an influencer marketing and talent management agency.

 

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