Campaign India Team
Apr 7, 2024

Over 70% of brands are investing in influencer marketing in India, says new EY report

The report also finds that 77% of brands surveyed feel confident in their agencies' ability to execute influencer marketing campaigns effectively.

Photo: Shutterstock
Photo: Shutterstock

With over four million influencers reported in the country and as many as 100 million taking their shot at product pushing on digital channels, it's no surprise that the explosion of social media has taken over India.

Now a new report titled the 'State Of Influencer Marketing in India' by EY and Collective Artists Network’s Big Bang Social is forecasting a 25% growth in the country's influencer marketing sector in 2024, culminating in a reach of INR 2,344 crore. This surge is predominantly fueled by the lifestyle, fashion, and beauty industries.

Automobiles, e-commerce, and FMCG sectors, known for their intimate consumer connections, are also set to substantially increase their investment in influencer marketing. By 2026, the sector is expected to expand to INR 3,375 crore, according to the report's projections.

Derived from an EY survey involving 2,053 participants—encompassing 86 brands, 556 creators, and 1,411 industry professionals—the report offers a comprehensive overview of the current state and future prospects of influencer marketing.

With an anticipated 740 million active smartphones in India by 2030 and 50% of mobile usage dedicated to social media, integrating influencer marketing into communication strategies has become imperative for marketers.

The report also reveals that 56% of brands have already invested more than 2% in influencer marketing. Looking ahead, three-quarters of brand strategies are likely to incorporate influencer marketing, while 70% of brands intend to maintain or increase their influencer marketing budgets in 2024, with half of them planning a boost of up to 10%.

"The advent of transactional, live video commerce and short video has presented novel avenues for brands to connect with their audiences, simplifying the purchasing process. This surge, driven by content in Hindi and regional languages, particularly in entertainment and comedy, exemplifies the expanding horizons within the creator economy,” commented Tanmay Bhat, entrepreneur, comedian and Youtuber in the report.

Selecting influencers based on engagement rates and target audience quality has become the norm for brands, prioritising awareness and engagement over direct sales conversion. Interestingly, 47% of brands show a preference for micro and nano influencers due to their cost-effective reach, despite nano influencers registering the highest engagement rates among all categories. The report advises a balanced strategy, leveraging mega/macro influencers for awareness and brand loyalty while harnessing micro/nano influencers for enhanced engagement.

Brand ambassadors and influencers play a critical role in influencing purchase decisions, with 77% of brands confident in their agencies' ability to execute influencer marketing campaigns effectively.

Emerging platforms like Chingari and MX TakaTak are making headway, introducing novel engagement methods with new consumer segments. Nonetheless, Instagram and YouTube remain the top platforms for influencer content consumption, as per the report.

The compensation model for influencers is evolving, with 71% of brands favoring a fixed fee approach, while others explore performance-linked models to ensure accountability.

Now is also a key moment for influencers in India. The rise of short video platforms, especially popular among users from non-metro areas, introduces a fresh dimension to content consumption. Dominated by a younger, male demographic, these platforms have broadened the creator landscape significantly. Approximately 12% of Indian content creators earn between INR 1 lakh and INR 10 lakh monthly, with 86% anticipating a 10% income increase in the next two years. Meanwhile, 77% of creators report unspecified income growth over the past two years.

"In the world of digital marketing, where getting two to three minutes of attention from a consumer is a massive challenge, creators are able to capture undivided attention with their creativity,” Anurag Iyer, CEO, Big Bang Social said. “The new heroes” of India, being more accessible, more varied, more knowledgeable and more impactful than ever before.”

Marketers cite determining the ROI of influencer campaigns as their greatest challenge, while influencers focus on building a loyal audience and maintaining credibility.

 

Source:
Campaign India

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