Manish Aggarwal contemplates whether the pandemic is making marketing influencers more influential
The onslaught of the pandemic and its financial implications has had brands scrambling to redistribute their budgetary allocations, revise ad expenditure, shuffle marketing mix and recast promotional strategies in general. With businesses making an all-around pivot, to digital formats and channels, in tandem with the increased stay-at-home habit of end-consumers, due to the pandemic, the surge in digital uptake of content has been substantial in India. And amid this explosion in digital channels and platforms, social media has been a star performer with influencer marketing getting traction from brands and influencers' standpoints alike. However, as brands increasingly trim their marketing budgets, what does it spell for marketing influencers? Does it imply that when the brands are under a financial strain, the balance of power is more in favour of the influencers vis-Ã -vis the brands? In other words, has Covid provided more leeway to influencers when they negotiate terms and conditions with brands?
The drop in ad expenditure across platforms
There is no doubt that there has been an across-the-media ad spend cut in the country last year. From cinema to audio to print to Out of Home (OOH) to television, every one of these platforms has witnessed a decline. According to a GroupM report, while cinema underwent the steepest drop at 83 per cent, it was 73 per cent for outdoor, 49 per cent for audio, 43 per cent for print and 14 per cent for television. Against these figures, it is important to note that digital registered a relatively modest two per cent drop. At a time when production was low and supply chain networks were struggling to place products timely in the marketplace, cutting down on advertisement and promotional budgets was not out of order.
The rise of new-age influencers as well as their following
Against the backdrop of COVID-19, several new-age influencers who hitherto had relatively lower social profiles have made their presence felt resoundingly. Galvanised by the public need for information and guidance on health, nutrition, food, fitness, diet, mental counselling and assistance, and even beauty, fashion and lifestyle et al, the new crop of influencers have witnessed a sudden leap in their following during the last one and half years. Unlike the traditional celebrity endorsements wherein an established celebrity, typically a film star or a sporting icon, becomes the face of a diverse set of products and services, promoting them indiscriminately on different platforms, the influencers mostly certify a niche product/service segment stemming from their own well-recognised experience and expertise on a given subject while commanding a highly dedicated set of audience, typically lower in numbers than a celebrity (although not always). In a highly cluttered marketplace dotted with ceaseless advertisements and promotions especially when celebrity endorsements have increasingly become more suspect for their lack of authenticity and genuineness, guided by commercial reasons, influencers are filling in that gap and helping a product or service stand out for brands. Although these online influencers may not be so famous in offline settings, their enormous online following can determine the difference between a successful and a not-so-successful product in a digital or even offline marketplace. This applies, especially, in a Covid-driven financially-strained business environment. A few thousand influencers have been able to connect a brand with millions of consumers in no time. According to a study, 78 per cent of marketing leaders employed influencer marketing in 2020 with around 13 per cent of them taking to influencer activity for the first time last year. In another estimate, there was a four-five time rise in influencer marketing during the Covid period until last year with particularly impressive action during the festivities.
How are the influencers adapting to the new normal?
Needless to say, influencers have come up with their own strategies and tool kits to navigate through the tough times. While it is natural to assume that they would subject themselves to lower fees and tougher terms and conditions, it is not as simple as it seems. Given the differences within the influencer community in terms of the number of followers and their so-called standing with respect to a particular category of product or service, a macro influencer is more likely to call the shots in his/her negotiations with a brand than say, a nano influencer.
However, this doesn't hold in all cases. It is possible that a brand would rather connect with a nano influencer with a higher engagement rate than a macro influencer with low activity and engagement. This would also be contingent on the exigent needs in terms of time and context from a brand's perspective when it would have to accommodate an influencer more than usual. For their part, driven by Covid-induced mobility restrictions and faced with cancellation of sponsored travel and event-based programmes, apart from displaying flexibility during negotiations, they have adjusted their sails by creating ad content from home instead of depending on outdoor commercial shoots.
Brands becoming more demanding
As marketing technologies evolve powered by AI and big data, brands have no longer been content with clicks, impressions and visits, but expect their influencers to catalyse conversion in the forms of actual leads and sales. In other words, brands would expect data-driven concrete and measurable ROI when negotiating with influencers.
In sum, even as there has been a profusion of influencer posts and equally remarkable impression counts during the Covid period, the ad fees would have largely come down for the influencer community. However, the lasting effects in terms of online shopping behaviour, social media usage and the ever-rising popularity of OTT platforms would ensure that influencers would regain their mojo. Remember, in the early phases of Covid, brands were spending about 50 per cent of digital marketing budgets on influencers. Is this poised to rise even more? Only time will tell.
(The author is the director of Bikano, the packaged products brand of Bikanervala Foods Pvt Ltd.)