From regional influencers to content-led commerce: This is how 2023's creator economy is shaping up

Dec 19, 2022
From regional influencers to content-led commerce: This is how 2023's creator economy is shaping up

Once considered just a trend, influencer marketing is now increasingly becoming a significant part of a brand’s marketing strategy. As per recent industry estimates, India’s influencer marketing industry will be worth Rs 2,200 crore by 2025. 

This projected growth can be attributed to increase in digital adoption and the number of influencers, and more brands looking to create a personal connect with their consumers. 

If consumer surveys are to be believed, the trust that influencers command, as far as campaigns go, is far more, as compared to traditional advertising or big-budget celebrities. 

Shailja Saraswati, chief content officer, Omnicom Media Group India, opines that with the increasing popularity of nano, micro and regional influencers, and their engagement rates and affordability, brands look at influencer marketing as a cost-effective solution to establish a greater reach and long-term engagement with consumers. 

“Now, brands engage with expert agencies that bring analytics and data into the picture. This makes influencer marketing more accountable with a defined set of KPIs," adds Saraswati

As per Kunal Sawant, business head, INCA, GroupM India, macro-influencers are the most preferred type of influencers. He says that regional influencers also command high credibility and engagement rates in specific sectors and geographies.

Besides new-age brands, legacy brands also look at influencer marketing as an important part of their digital marketing spends now. The trust factor also leads to more conversions for brands that ultimately means more sales. 

According to a recent INCA and Kantar Influencer Marketing report, about two out of five consumers follow more than five influencers on social media, and the average number of influencers followed is 7.5. The report reveals that Facebook, YouTube and Instagram are among the most popular platforms for consumers to connect with influencers.

Tech and data-led approach 

Brands today make use of data-led approach and automated tools to help in better decision-making, rather than go by intuition.

Social Catalyzers' co-founder Kalyan Kumar says that there is an interesting trend of science and data-based decision-making. Platforms can provide massive transparency to brands in their influencer marketing decisions, through audience authenticity, quality of engagement, relevance, etc. This has encouraged CMOs to take a bigger, but measured approach to influencer marketing.

These AI platforms will now help the brands to know whether influencers have fake or non-credible followers. 

“With almost 61% of all profiles on Instagram having over 70% 'credible' or 'useful' audience, the next layer is that all major brands will need help to get to the next level of ‘relevant’ influencers. While hoping to target moms, I have seen brands like Pampers working with new mom influencers, who have about 70% male followers ” adds Kumar.

GroupM’s Sawant says that the early adopters of influencer marketing are now in a better place to scale. “However, the engagement that creators get, will remain the common currency, layered with reach and resonance.”

Impact of increased regulations on influencer marketing

The Advertising Standards Council of India’s influencer guidelines states, “All ads published by social media influencers or their representatives, on such influencers’ accounts, must carry a disclosure label that clearly identifies it as an advertisement.”

‘Upfront’ and ‘prominent’ disclosure is required if any kind of material exchange takes place between a brand and an influencer. With great influence comes great responsibility and, hence, the influencers should try and ensure that the advertiser is able to substantiate any claims made in an ad.

Influencer violations contributed to about 29% of the ads complained against, revealed ASCI’s annual complaints report for 2021-22. Are these guidelines by ASCI and other regulatory bodies an added hassle for influencers and marketers? What do they need to keep in mind to avoid any violation? 

Shubham Singhal, CEO, Dot Media, says that these regulations are nothing, but a way to protect both consumers and creators from exploitation. He says that the audience on social media is widespread, across different demographics, and extremely gullible to trends. The regulations ensure that their integrity is protected, and false news and explicit content is regulated. 

Owing to these regulations, content, especially ads or promotional posts, can be put under scrutiny and be flagged off in case of violation of consumer interest.

Formalisation of creator ecosystem

With audiences getting access to a variety of influencers on social media platforms each day, there is a need to formalise the diverse creator economy to enable it to grow and remain profitable for all parties (brands, creators, influencers) over the long run.

In July 2022, the Central Board of Direct Taxes announced that a TDS of 10% would be levied on freebies and perks worth over Rs 20,000 received from brands for promotions, as per section 194R of the Income Tax Act. While some experts say that this is step in formalising the creator economy, others argue that it may hurt influencers. 

Indian creators and influencers are taking inspiration from their western counterparts by bringing in revenue directly from consumers and other channels. Hence, more than 90% of the Indian creator market relies on brand tie-ups. 

Singhal of Dot Media says that as influencers and their communities grow, they are likely to become brands. “These influencers may not be great at business, but they have been consumers all their lives. Their credibility and (consumer) mindset pushes them to make products that are good for their communities. Soon, these influencer-brands will replace small-scale brands on the shelves as well.” 

It is, indeed, true that with the formalisation of this economy, brands will realise the need for good quality marketing, instead of just focussing on quantity. Formalisation will also have a larger impact on creators. 

“A smooth regulatory intervention will require much more thinking. Multiple formats within each platform (Instagram alone has Static, Carousel, Mixed Carousel, Reels Video, Live, Story, etc.) need different consideration. Things like ‘not using filters’ is like asking a designer to not use the basic tools of their trade, like Photoshop,” believes Kumar.

The way forward

Short format videos, live streaming and content-led commerce will continue to be the dominant influencer marketing trends. Apart from this, AR/VR-led innovations will also see increased adoption by creators and brands, alike. 

Saraswati of Omnicom Media says, “We will inch closer towards the adoption of the Metaverse, which despite being in a nascent stage at the moment, will continue to develop and mature in the near future.”

With the organic reach of branded influencer content being limited, and the ever-evolving platform algorithms, Sawant of GroupM points out that it will become imperative for brands to amplify influencer content and draw better RoI from their content investments. 

Creative content will ensure that influencers target potential consumers in the right way. Innovative and unimagined pairs of influencers and brands will keep the audiences entertained in the coming year as well.

Source: afaqs