Buying Under Influence

How many of us have purchased a product simply because it looked pretty in a photo on Instagram? Or maybe some lifestyle blogger mentioned it in their ‘August’s Favourites’ video? With the increase in the use of social media, users are daily bombarded with a plethora of content. To avoid getting lost in the sea of information, it is becoming quintessential for the brands to grab the attention of their potential customers by identifying the most relevant and meaningful content. To do so, brands have to constantly think of novel ways to market their products. Accordingly, they have started to increasingly dip their feet in influencer marketing, thereby making the influencers a huge part of their marketing mix.

Influencer marketing has reinvented the concept of celebrity endorsement, by tapping online influencers for contemporary and content-driven marketing campaigns. With 80% of marketers using influencer marketing, it has become the fastest-growing category within the realm of marketing. The spending in the field is estimated to reach $8 billion this year. According to a 2018 survey conducted by CivicScience, a consumer intelligence research platform, 19% of the American consumers purchased a product or service because a social media influencer recommended it. To successfully generate sales conversions, a brand needs to look for the perfect influencer, the one whose content aligns with the brand’s ideologies, allowing it to target a consumer base that also echoes and understands the brand.

On the surface, influencer-driven marketing offers unique advantages to the brands, which have led to an increase in their demand. Endorsements by influencers are not created as traditional advertisements but, as recommendations, attaching authenticity to them. Additionally, a large audience of followers fosters a belief that the influencer is likeable and popular, and thus, the brand can benefit from their social capital by targeting a large consumer base. The content continues to be picked up during Search Engine Optimisation (SEO) searches, even after the campaign is over, creating a significant long-tail effect.

However, on poking deeper into the issue, various disadvantages have also started coming to light. While the large audience and reach of the influencer are the biggest selling points, however, many are paying people to get fake followers on their social media accounts. This option is becoming increasingly accessible due to its low cost. Social King, a Delhi-based marketing agency offers 100 followers for ₹255 ($3.99). In fact, the Mumbai Police has identified an additional 100 websites in India known to sell ghost followers. However, a large follower count doesn’t necessarily mean that the quality of the content created will be up to the mark and lead to successful conversions. Secondarily, it has been found that an increased follower count, that has been generated by bots leads to a decrease in the engagement, making the Click Through Rate (CTR) fall.

To bypass the issue of fake followers, brands started paying influencers based on the performance of their posts, assuming a direct correlation between the quality of content and the engagement on the posts. However, this led to the creation of a market for likes and comments, as well.

The success of a campaign is contingent on metrics like trending and views. However, when these numbers can be skewed by spending little money, it becomes tough to analyse the actual reach. To prevent artificial inflation of followers and engagement, Jim Tobin, President of Carusele, a marketing agency based out of North Carolina suggests implementing flat-fee compensation or sales-based compensation models.

Secondly, advertisers tend to run after the same top influencers to partner with them. While this guarantees the quality and reach, the overexposure of paid content for various brands soon leads to saturation, harming the influencers’ following. This is because people follow influencers to keep up with trends and to find inspiration. As a result, if their feed is advertisement dominant, their influence is most likely to plunge.

Lastly, with it being a novel industry, influencer marketing lacks standard industry practices and regulations. For example, the lack of pricing and measurement standards, and the absence of contracts between agencies and influencers. Generally, small scale operators lack the resources to do the paperwork, failing to sign contracts with influencers. On the flip side, there are also instances of big brands getting small influencers on board, misleading them to sign void/voidable contracts.

There is also strong evidence of an ethnicity wage gap wherein the Black, Asian, and Middle Eastern influencers are being paid significantly lesser as compared to their White counterparts. Such wage gaps also exist along the intersections of age, disability, religion, and sexual orientation. Not only are the opportunities available for them far too low, but they are at a double disadvantage in monetary terms too.

To release itself from the spiral of doom, influencer marketing needs to reinvent itself by putting in good practices in place. The first becomes a standardised model for pricing and compensation. Second, to formalise the system by putting legal contracts in place. Third, brands must shift their focus from the number of followers or attractive content to the rate of audience engagement, the demographic of the influencers’ followers, the purchasing habits of the followers, and the influence of the influencer to drive sales. It’s not all about reach, but about relevance, resonance and real impact. To this end, harnessing the untapped potential of ‘micro-influencers’ has been known to garner better results.

Micro-influencers are people who have a more loyal and active follower base, despite a low number of followers. The increased influence is driven by the expertise and specific interest for a particular topic. What distinguishes these micro-influencers from social media celebrities is the personal touch and relationships they have established with their followers. According to a study conducted by Dr Jonah Berger, a marketing professor at the Wharton School of the University of Pennsylvania, micro-influencers have up to 22.2 times more sales conversions each week than an average consumer.

While the category of influencer marketing adds much value to a brand’s marketing mix, without continuous iteration, it will become tougher for the brands to harness the model to its full potential. The power in the industry lies primarily in the hands of the brands, agencies, and platforms that content curators work with. Thus, both parties need to meet at the negotiation table to develop practices that will lead to a win-win situation for all.


Devyani Arora

I am a nineteen-year-old student in Delhi University, pursuing bachelor's in commerce. You will find me having an existential crisis almost every two days and listening to The Local Train on loop.

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