Influencer marketing to grow, despite millennial distrust

A recent study by social shopping and influencer marketing platform Dealspotr states that 52% millennials globally admit that they trust social media influencers less these days. This revelation comes at a time when Instagram has emerged as the leading platform for influencer marketing, boasting over one billion monthly active users and over five lakh influencers globally. According to Instagram planner and scheduling tool Hopper, Instagram influencer marketing is worth $2 billion and is estimated to zoom to $5-10 billion by the end of 2020. 

But despite the less trust that millennials seem to be levying upon influencers, brands admit that influencer marketing is a channel that they have to invest in. 

According to Kapil Mahtani, founder and chief executive of uber-chic footwear brand Tresmode, nowadays, consumers highly trust and look up to influencers more than anybody else. “The power game has shifted to influencers as they have the control to forge strong ties with followers and experience a more engaged audience than direct advertising. Investments will increase for influencer marketing as consumers expect brands to bring the conversation to them.”

According to influencer marketing agency Mediakix, almost 65% brands and marketers are planning to increase influencer marketing budgets in 2019. Presently, about 34-35% brands spend up to or less than 10% of their marketing budgets on influencer marketing, as per Mediakix estimates. Influencer marketing is an expensive affair for brands. While micro influencers (those with 10,000 Instagram followers) can charge as little as $5-10 per post, high-profile influencers like Kylie Jenner have charged even up to $1 million for a product-related Instagram post. 

Says Elisha Saigal, founder and CEO, El Sol Strategic Consultants, “Influencer marketing is impactful for a new brand. However, it can be an expensive proposition for an established brand. Until there is a direct link back to sales via an influencer marketing campaign, it remains an expensive outreach programme.”

Experts admit that influencer marketing does not often guarantee good returns. According to Kaabia Grewal, co-founder of bespoke jewellery brand Outhouse, although it is hard to figure out the returns on investment, there are times when people visit stores and say that they saw this on an influencer's page and now want it too''. What's crucial for brands is to choose the right Instagram influencers, especially at a time when influencers with fake followers are costing brands as much as $100 million as per market estimates.

Factors like the kind of content, their audience, engagement rate, etc. come into picture when looking at an influencer, says Grewal, who feels that an influencer should resonate with the brand style, should have the right brand fit and share similar aesthetics. “We feel micro influencers work much better for us. They might have a smaller circle but offer qualitative work. This helps in building a stronger brand image,'' adds Grewal.

Brands are laying much thrust on the content factor. Especially in the wake of a recent trial by Instagram which is hiding the number of 'likes' received for posts, in an attempt to make the platform less competitive and to enhance true engagement with the followers. As part of the trial, though Instagrammers can look at who all have 'liked' their posts, they cannot count the number of likes received by the competitors' posts. This trial is expected to give more weightage to content and engagement than mere likes that a post garners.

According to Mahtani, they are approaching influencer marketing with a content-driven strategy, “wherein we use high-quality content generated by our set of influencers for our social media pages and this drives followers to our website. Additionally, we are fetching desired returns from this investment as it appeals to their set of audience.''

Saigal says they recently launched an organic make-up brand in India only via a digital influencer programme and “we had an excellent response on awareness and sales. The brand was launched only via a popular e-commerce beauty platform and we ensured instead of an on-ground activation, we utilised our spends on digital, supported by emailer and traditional. It resulted in a remarkable launch with sales and a host of products going out of stock in the first month itself.”