Business of social: Inside the financial world of social media influencers

May 06, 2024
Business of social: Inside the financial world of social media influencers
Social media influencers, as disclosed by the influencers themselves, can earn as much as Rs 3.5 lakh per post, enjoying a lifestyle that rivals, and in some cases, surpasses that of many corporate employees.

According to Statista, the influencer marketing industry is projected to reach Rs 2,800 crore by 2026. Moreover, a collaborative report by EY and Collective Artists Network’s Big Bang Social suggests an even more substantial growth, with influencer marketing in India expected to expand to Rs 3,375 crore by the same year. Despite the slight difference in the numbers, both reports highlight a notable rise in the field's potential in India.

In 2022, the Indian influencer marketing industry was valued at over Rs 1,200 crore and it was projected to grow at an annual rate of 25 per cent over the next five years.

"Influencers have evolved into pivotal channels for brands, fostering genuine connections with their audiences through engaging content. They influence consumer purchasing decisions and product research across various sectors, including food, fashion, jewellery, and mobile/electronics," Anushka Rathod, a fin-fluencer told Republic Business.

Short-form videos like reels have emerged as the most popular content format, offering influencers a platform to deliver concise and impactful messages to their followers.

"Additionally, live-streaming has gained significant momentum, leading e-commerce giants like Amazon and Flipkart to introduce live commerce features on their platforms," she emphasised.

Brands and the art of picking influencers

The EY report stresses that with an expected 740 million active smartphones in India by 2030, three out of four brand strategies should include influencer marketing. Brands are all about engagement rates and quality when picking influencers, seeing how important genuine connections are to reach the right audience.

In 2024, influencer marketing continues to solidify its position as a cornerstone of brand strategies, with a notable 75 per cent of brands integrating it into their marketing approach. More than half of these brands, specifically 56 per cent, are allocating over 2 per cent of their budgets towards influencer marketing initiatives.

Furthermore, a substantial 70 per cent of brands intend to either maintain or increase their investment in influencer marketing this year, with approximately half planning to boost their budgets by up to 10 per cent.

Income sources for influencers

Anushka Rathod revealed that most of her income comes from social media activities, given her full-time commitment to the field. She also generates income by leveraging her network to promote other products and services, creating a diversified revenue stream.

Shift in trends

In recent years, there has been a shift in the types of brands collaborating with influencers. At the start of 2021-2022, start-ups dominated the influencer marketing scene. However, the field has evolved, with traditional organisations increasingly recognising the impact of social media marketing. Well-funded start-ups have also notably increased their spending on social media marketing strategies.

Demonstrating confidence in their agency partnerships, 77 per cent of brands believe their agencies possess the necessary capabilities to execute influencer marketing campaigns effectively.

In terms of compensation models, a majority of brands, accounting for 71 per cent, opt for fixed fee arrangements with influencers, while an increasing 29 per cent are exploring performance-based models to enhance influencer accountability.

Measuring influencer campaign success

Creators highlighted the importance of tailoring key performance indicators (KPIs) to the specific goals of each brand collaboration. For branding-focused campaigns, they monitor impressions, views, and engagement on their content. In contrast, campaigns aimed at conversion are evaluated based on metrics such as link clicks and downloads.

Aditya Jangid, Founder, Voohoo Live provided additional insights into influencer earnings. He mentioned that earnings can vary significantly based on factors such as follower count and niche.

"The sources of income for social influencers have grown beyond endorsements and paid content. Many influencers have dabbled in producing their own goods, including apparel, e-books, and online courses," Jangid said.

"Some influencers have tapped into the affiliate marketing sector to make money by endorsing goods they genuinely believe in. Influencers have been able to create stable income streams and develop their personal brands considering this entrepreneurial mindset," he further added.

"For a creator it's essential to diversify income streams beyond brand deals, such as merchandise sales, affiliate marketing, and content creation," Finfluencer Rathod said.

Financial realities

The compensation structure for influencer partnerships often includes fees for sponsored posts, affiliate commissions, and product exchanges. Long-term partnerships may involve monthly retainers or performance-based bonuses.

"Maintaining a social media presence and influencer career entails expenses such as equipment, software, and potentially outsourcing tasks like content creation or management. Creators also need to consider taxes and legal fees as part of their financial responsibilities," Balar highlighted.

On the influencer side, the field remains lucrative, as evidenced by 77 per cent reporting income growth in the past two years, with an overwhelming 86 per cent anticipating a further double-digit increase in their income over the next two years.

Avenues of monetising influence

Influencers have various options to monetise their influence, including sponsored posts, affiliate marketing, brand ambassadorships, product reviews, creating and selling their own products, earnings from social platforms, paid speaking engagements, offering consulting services, selling advertising space, and creating sponsored content featuring brands.

Earnings on different social media platforms

Facebook: To be eligible for monetisation, creators should have a Page with a minimum of 10,000 followers for live videos or 5,000 for video on-demand and maintain 5 active videos on their Page.

YouTube: To begin monetising on YouTube, creators need a minimum of 1,000 subscribers, along with either 4,000 public watch hours on long-form videos in the last 365 days or 10 million public Shorts views in the last 90 days.

Twitter: Twitter introduced a subscription model where influencers can offer exclusive content to subscribers, providing a new avenue for monetisation.

Instagram: Instagram remains a lucrative platform for influencers. Revenue depends on factors like follower count, engagement rates, niche, and posting frequency, with influencers potentially making Rs 5,000 to Rs 3 lakhs or more per post.

"The world of social media influencers in India is not just about likes and followers; it's a thriving business with multiple revenue streams, offering influencers a path to fame and significant financial rewards," Rathod emphasised.

Source: republicworld