71% of brands pay influencers on fixed fee model; 29% based on performance-linked model: Report

71% of brands engage with influencers on a fixed fee model and 29% are exploring performance-linked models to drive influencer accountability, according to a recent report by EY and Collective Artists Network’s Big Bang Social.

The report titled 'The State Of Influencer Marketing in India' said that 56% of the brands invested more than 2% on influencer marketing. 

According to the report, 70% of brands plan to keep their influencer marketing budget the same or increase it in 2024, with half planning to increase it by up to 10%.

As per the report, influencer marketing in India is expected to surge by 25% in 2024, reaching Rs 2,344 crore, and further expand to Rs 3,375 crore by 2026.

7% of influencers reported income growth in the past two years and 86% of influencers expected over 10% increase in their income over the next two years.

The report also stated that 12% of influencers earn between Rs 1 and 10 lakhs. 73% of influencers work for less than 10 hours a week, compared to up to 39 hours abroad, highlighted the report. 

The report further reveals that the growth of influencer marketing is anticipated to be driven by lifestyle, fashion, and beauty categories. Further insights from the survey indicate that sectors such as automobiles, e-commerce and FMCG are expected to increase spending on influencer marketing the most.

It was found that marketers must strike a strategic balance between mega/ macro influencers to drive awareness and brand loyalty, while also tapping into the power of micro/ nano influencers to drive engagement. 

Interestingly, nano influencers had the highest engagement rate compared to other influencer categories. It is important to note that 47% of brands preferred driving influencer campaigns with micro and nano influencers due to the lower cost per reach.

Challenges were reported from both the brand side and the influencer side. The biggest challenge for marketers was determining the ROI of their influencer marketing campaigns while building a loyal audience and maintaining credibility were the top two challenges for influencers.