Lack of price standardisation is the biggest challenge brands face in influencer marketing: Report

Delhi: Lack of price standardisation, inability to measure ROI and finding the right influencers are the three biggest challenges faced by over 64% of brands, according to a report by Kofluence, a social media influencer marketing tech platform.

The report further stated that growing an audience and finding time to create content are the major hurdles for almost 50% of creators.

Listing below challenges for brands and creators separately found in the survey: 

Challenges for brands

• 10% of respondents attribute difficulties to a lack of knowledge about market-level insights due to an inadequate understanding of what customers want or what’s happening in the market.
• 7% still rely on manual marketing aids for operational methods. Using hands-on tools for marketing instead of efficient automated solutions, slowing down processes.
• 9% of respondents confront the challenge of high turnaround time for executing campaigns since traditional agencies usually take longer to manage campaigns, especially during busy seasons, making it hard to keep up with business demands.
• 6% face challenges in executing only small-scale campaigns. Most brands stick to small advertising efforts and hence cannot reach a larger audience.

Challenges for content creators

• Monetisation or figuring out how to make money through brand collabs, especially due to lack of standardised pricing is a hurdle for 17% of influencers. 
• In the dynamic world of social media, influencers often find themselves subject to online criticism, a challenge that demands strategic and thoughtful responses. Approximately 7% of influencers acknowledge the difficulty in managing professional online criticism effectively. 
• 10% of creators face challenges due to a lack of knowledge or resources that help them to make the best use of their social influence.

Other findings of the report: 

• 2.5-3.5 million creators make up the Indian creator economy, with a substantial majority on Instagram, followed by YouTube. 
• Over 110-170K YouTube content creators are actively monetising their content, out of a vast community of 350-600K creators, underscoring the platform’s significant monetisation opportunities for content creators.
• Nano creators earn between Rs 500 to 5K per Instagram reel. Mega and celebrity creators earn Rs 2 lakhs and more. “India’s Instagram influencers exhibit a wide range of earnings, reflecting the diversity in the influencer ecosystem and the potential for high earnings among top-tier creators,” stated the report. 
• Geographically, North India emerges as the dominant hub for content creation, housing 37% of creators. Central India follows with a substantial 23%. The East, The West, and The South regions follow in succession.
• Creators with average views between 1k to 10k earn up to Rs 7,000 per YouTube Shorts. Mega creators earn over Rs 3 lakhs from Shorts.
• With 60-70% male and 30-40% female creators, Instagram exhibits a balanced yet slightly skewed gender distribution. In contrast, YouTube shows 50-60% male and 40-50% female creators.
• E-commerce leads in influencer marketing spending with 27%, followed by FMCG at 20%, highlighting a strategic emphasis on influencer collaborations within these sectors to drive brand visibility and consumer engagement.
• Instagram creators aged between 18 to 25 make up over 49% of the demographic, followed closely by 42% in the 26 to 35 age bracket, reflecting a youthful dominance in content creation, significantly influencing content trends and preferences.
• 72% of brand marketers and over 56% of content creators support advertising guidelines, mandating creators to disclose all material connections.
• Brand reputation and long-term partnerships are pivotal, influencing over 40% of creators when deciding on brand collaboration opportunities.
• Short-form videos lead with 30% preference among creators, while GIFs memes and audio formats are least preferred.
• 50% of brand marketers focus on authenticity and social proof as the two main reasons to choose influencer marketing.
• Instagram and YouTube take the lead as the go-to social media platforms for 75% of brand marketers seeking effective influencer engagement.
• Micro and Macro-influencers excel at collaborative comfort, with a total of 70% of brands preferring them over other creator categories.
• Over 70% of creators actively opt for influencer marketing platforms/agencies to explore and secure brand collaborations.

Ritesh Ujjwal, Co-founder of Kofluence, said, "In today's digital age, customer acquisition costs are constantly spiralling and, combined with customer retention D30 retention rates at 5%, Brands are facing formidable challenges across customers lifecycle. They are responding strategically by leveraging trust through influencer collaborations, a marked departure from the traditional approach, particularly in an online environment where ad-fatigued consumers allocate a substantial portion of their time. Our report meticulously examines platform dynamics and the evolving preferences of creators and brands, offering readers a centralized resource containing exclusive insights and proven strategies sourced from top brands and industry experts."

Sreeram Reddy Vanga, CEO & Co-Founder of Kofluence, shared his perspective, remarking, "At Kofluence, we hold steadfast in our belief in the influence wielded by content creators as they shape the very fabric of online engagement. The growing emphasis on creator monetization over the last few years underscores that sentiment. I envision a future where standardized metrics and regulatory guidelines will bolster transparency and efficiency, with data-driven platforms at the helm. In this 2024 edition of the Influencer Marketing Report, we draw upon the insights of over 1000 content creators, brands, and industry professionals, encapsulating the prevailing sentiments within the current Indian influencer marketing industry."

The research methodology is thoughtfully designed, incorporating both primary and secondary data sources.

Secondary Research 

To establish a comprehensive understanding of the influencer marketing landscape, an extensive review of secondary sources was conducted. This involved examining existing literature, industry reports, and relevant studies to gain insights into historical trends, industry benchmarks, and best practices. Secondary research serves as a foundational framework, providing context for the primary data collection process.

Primary research

Kofluence leveraged statistical models and analytics, fuelled by data from its Kofluence repository with over 2 million content creators. 

The platform said that the data acquisition process prioritised ethical considerations, ensuring user privacy, obtaining necessary permissions and adhering to legal and ethical standards set by the data providers. In conjunction, surveys and interviews played crucial roles as integral components of the primary research methodology.

Two distinct surveys were meticulously designed— one for content creators and another for brand managers and industry professionals.

Primary data was gathered through targeted surveys distributed to a broad audience. Over 1000 content creators representing various niches, were invited to participate, ensuring a diverse and representative sample. Additionally, brand managers and industry professionals were included to provide insights into the brand perspective.