Brands consider that the OND (Oct., Nov., Dec.) period of the year offers the best returns on their marketing expenditures, with businesses making every effort to connect with consumers. Influencer marketing is now an essential component of any brand’s marketing budget, from expansive campaigns to targeted advertising in particular regions. This year, a lot of heritage brands have also teamed up with influencers to reach audiences across the country.
With the creator economy expected to expand into a Rs 2,200-crore-strong business in the next two years (as per GroupM), the space has become the cynosure of all eyes. According to an expert, corporations have doubled their influencer marketing budgets this year over last. According to him, brands have grown savvy with their investment and have learned the game of influencer marketing which has resulted in a rise in spending.
According to a survey from Influencer Marketing Hub, as reported by another expert, influencer marketing spending has increased 62% in the BFSI sector and 63% in e-commerce.
Influencing the Ad Spends
Between the pandemic and the aftermath, there has been a significant change in consumer behavior. Nowadays, the typical smartphone user browses social media for up to four or five hours per day. Due to the widespread shift in consumer purchasing habits, brands have begun to adjust and pay attention to the needs and preferences of their target audience.
People’s ability to access goods and services from anywhere in the world has allowed online retailers to develop, and many e-commerce enterprises have witnessed a double increase in online expenditure.
“This year has been particularly dynamic for influencer marketing, witnessing both shifts and sustained growth compared to the previous year,” stated Tusharr Kumar, COO of OML Entertainment. Influencer marketing’s development was greatly impacted by the particular conditions surrounding the pandemic, and a clear pattern emerged in reaction to shifting consumer purchasing and behavior patterns.
According to an analyst, corporations have doubled their influencer marketing budgets this year. According to him, some major brands are probably going to make large investments totaling several crores. Influencer marketing can account for as much as 30% of a smaller, emerging brand’s overall marketing budget.
“This year has marked a significant leap in influencer marketing for us compared to last year,” stated Yulia Aslamova, Head of Asia, DRIM Global. In 2023, spending increased significantly, with a 35-40% rise over 2022.”
More brands are embracing influencer marketing, resulting in an increase in overall investment. Furthermore, current companies are not only continuing to invest but also investing additional dollars as they uncover scalable models with influencers that give superior ROI.
“This year has been a little slower for influencers and influencer marketing due to the World Cup,” said Shivam Agarwal, co-founder of Kromium. Brands are more concerned about capturing eyeballs there.
ROI in Place
According to experts, even while investment in influencer marketing is small, the value delivered by influencers has always been significant to the firm. When it comes to cooperating with influencers, many firms opt for performance marketing, and several brands, such as Myntra and Nykaa, have formed their own influencer programs in order to promote influencers and the business, creating a win-win situation.
In terms of ROI, Aslamova of DRIM Global mentions an Influencer Marketing Benchmark Report survey, which shows that firms gain an average of $5.20 for every dollar spent on influencer marketing, demonstrating a compelling return on investment.
According to Kumar, influencers are increasingly using incentive and affiliate models to boost ROI, particularly on platforms like YouTube. “Surveys indicate a growing trend, with 47% of respondents attributing their product purchases to influencer recommendations in 2023, up from 27% in 2019”, he said.
“Beyond the quantitative measure of ROI, influencer marketing plays a pivotal role in shaping brand perception by establishing a direct and engaging communication channel between brands and their target audience through content creators,” said Preety Singh, Co-Founder and Managing Director of Boomlet Group.
Influencer marketing promotes a strong brand presence and audience resonance. The increased visibility gained through influencer marketing on social media platforms greatly adds to effective brand building.