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Influencer marketing poised to hit $405 million by 2026

Lifestyle, fashion and beauty categories will drive industry’s growth, says EY-Big Bang Social report

Influencer marketing poised to hit $405 million by 2026
[Source photo: Chetan Jha/Press Insider]

India’s influencer marketing industry is poised to reach ₹3,375 crore, or about $405 million, by 2026, driven primarily by lifestyle, fashion and beauty categories, a survey has projected.

Influencer marketing is projected to grow by 25% to become a ₹2,344 crore (about $290 million) industry by the end of the year, the study, which reflects the findings from a survey of chief marketing officers, content creators, agencies, and individuals, said.

The joint study by consulting firm EY and creator super-app Big Bang Social said as half of people’s mobile time is spent on social media platforms, using influencers in marketing is critical for brands. Big Bang Social is backed by talent management firm Collective Artists Network.

Brands are also increasingly recognizing the potential of the creator economy and are investing in influencer marketing, especially in sectors such as packaged consumer goods, automobiles and consumer durables, the ‘State of Influencer Marketing in India’ report said.

The study found engagement rate and quality of target audience as the top criteria for brands to select influencers, making it imperative for companies to select influencers that are aligned to their respective campaign objectives.

A little more than half of the brands currently set aside about 2% of their promotion budgets for influencer marketing, with nearly three-fourths of them planning to maintain or increase their budgets for the vertical this year.

Nearly half of the brands are leveraging both macro and nano influencers alike because of their cost-effectiveness and impressive engagement rates.  While macro influencers amplify brand awareness and help build loyalty, micro or nano influencers foster a deeper engagement and connect with highly targeted audiences.

Notably, nano influencers, which are accounts with a following between 1,000 and 10,000, boast the highest engagement compared to their peers.

The study also found Instagram and YouTube to be the most preferred platforms to consume content from influencers, with new and upcoming platforms also gaining momentum and offering innovative ways to engage with consumers.

The fixed fee model remains the most popular approach with nearly three-fourths of brands opting for it because of the predictability and ease of budgeting. On the other hand, three-tenths of firms prefer the performance-linked model as it incentivizes influencers to deliver results and drive greater accountability.

All in all, this is a great time to be an influencer in India as more than three-fourths of influencers reported an increase in incomes in the past two years, with one-tenths of them taking home between ₹1-10 lakh.

Optimism also abounds as close to nine-tenths of the influencers surveyed are expecting their incomes to rise by over 10% over the next two years.

About three-fourths of the influencers in India also spend under 10 hours a week for influencer work, much lower than the higher time commitment required by influencers abroad.

Tanmay Bhat, entrepreneur and comedian, said the influencer marketing industry has provided a launchpad for startups and direct-to-consumer brands, especially in sectors such as beauty, fashion, health and lifestyle.

“As a creator who has witnessed the evolution of this space, I see immense promise and potential. India, a key player in the global creator economy, holds the promise of an exhilarating future shaped by creativity, collaboration and innovation,” Bhat said.

Anurag Iyer, CEO of Big Bang Social, said, “In the world of digital marketing, where getting 2-3 mins of attention from a consumer is a massive challenge, creators are able to capture undivided attention with their creativity.”

“In today’s rapidly changing Indian society, citizens face transformations in various aspects – be it societal norms, career paths, financial strategies, or cultural shifts. Influencers are stepping in to provide guidance, reassurance, and advice, effectively assuming the role of contemporary heroes,” Amiya Swarup, partner, marketing advisory, EY India, said.

“Coupled with the projected growth in influencer marketing, it’s clear that influencers now define an unprecedented era of knowledge and impact, while also unlocking vast opportunities for brands and marketers,” Swarup said.

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