What opportunities lie ahead in India's influencer marketing boom?

In the bustling world of social media, our favorite influencers are more than just faces on a screen. They are the voices we trust, the trendsetters we follow, and increasingly, the brand ambassadors we look to for recommendations.

As they seamlessly weave endorsements into their content, showcasing products we both admire and use, a new era of consumer engagement is unfolding. This partnership between influencers and brands isn't just about marketing, it's about forging genuine connections and driving real impact.

Let's explore how important brands and influencers are for each other and for consumers and viewers moving forward.

As per the EY report, the Indian influencer marketing will grow at an 18% CAGR. This industry will grow from Rs 19 billion in 2023 to Rs 34 billion by 2026.

While Instagram and YouTube are the platforms of choice, smaller platforms will also be used for niche audiences.

Moreover, the remuneration mechanism will evolve, and move to a more performance-based model for smaller influencers.

“We expect a majority of large brands to use influencers by 2026,” the report stated.

Although influencer marketing is thriving in India, numerous creators are consistently seeking a stable monetisation stream beyond advertisements.

Speaking on the same, Ankush Sachdeva, Co-founder and CEO, Sharechat and Moj, said, "In the next few years, there will be a massive increase in micropayment-led monetisation for digital influencers through livestream gifting. This will help grow the creator ecosystem in the country by allowing creators to have a steady monetisation stream beyond ads."

According to the report, apart from the growth in smartphone users in India of over 30 million, low data charges and increasing per capita income, the popularity of gaming influencers, which attract significant followers on social media and short video platforms, has contributed to attracting new cohorts of players.

As the influencer marketing industry grows, the music segment can provide a scalable set of ‘musicfluencers’ for brands to partner with, the report stated.

Moving on, Abe Thomas, CEO of Big FM, said, "The fusion of content and tech has redefined how consumers engage with content, delivering solutions for brands. Through AI-driven personalisation, virtual influencers, experiential AR/ VR, on-ground activation and micro marketing, a new era unfolds, creating precisely tailored authentic content and connections with audiences."

As digital media consumption rises, the future seems brighter for influencers in India. However, many industry leaders believe that amid all this, there is a pressing need for certain guidelines for content creators when it comes to promoting or endorsing products.

Earlier, the Ministry of Consumer Affairs issued additional guidelines for celebrities, influencers

and virtual influencers in the field of health and wellness (Influencer Guidelines). The press release accompanying the Influencer Guidelines states that they are an extension to the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022.

The Influencer Guidelines aim to prevent misleading advertisements, unsubstantiated claims and ensure transparency in health and wellness endorsements by celebrities, influencers and virtual influencers.

Meanwhile, the Advertising Standards Council of India (ASCI) also introduced guidelines for Influencer Advertising in Digital Media in August 2023.

The Guidelines are applicable to all the influencers and virtual influencers who have a material connection with an advertiser.

“Material connection” has been defined as any connection between an advertiser and an influencer that may affect the weight or credibility of the representation made by the influencer. It can include benefits or incentives such as monetary or other forms of compensation, free products with/ without any condition to include those received unsolicited, discounts, gifts, contest or sweepstake entries, trips/ hotel stays, etc. If such a material connection can be established, then disclosures are required.

Moreover, the Department of Consumer Affairs has released a guide “Endorsement Know-Hows!” for celebrities, influencers and virtual influencers highlighting the requirements of disclosing material connection and the due diligence requirement as provided in the Guidelines for Prevention of Misleading Advertisements and Endorsements for Misleading Advertisements, 2022 (Misleading Ads Guidelines).

Industry leaders believe that as influencers continue collaborating with brands in the future, they'll need to follow specific guidelines to promote products ethically. These guidelines will serve as tools to ensure their endorsements are done responsibly.