The advertising & media landscape in the country is evolving every day, especially with the exponential growth of all things digital during the pandemic. According to market research firm Statista, the influencer marketing industry in India- a relatively new-age advertising segment- has grown robustly and is worth Rs 9 billion, as of 2021. It is projected to grow at a compound annual growth rate (CAGR) of 25 per cent over the next five years to reach Rs 22 billion by 2025. There has also been a perceptible paradigm shift from banking on celebrity endorsers to engaging influencers for product placements in recent years.
On the sidelines of its flagship content summit Brew, IndianTelevision.com had an in-depth conversation with GroupM's president of partnerships and trading Ashwin Padmanabhan, to find out whether influencer marketing has finally come of age in India.
Padmanabhan also weighs in on the importance of responsible advertising, while sharing insights on the marketing & advertising strategies brands and OTT platforms are adopting to improve the bottom lines in today’s uncertain inflationary times, with consumers tightening their purses.
Edited Excerpts:
On has influencer marketing reached a stage in India where brands are now keeping aside a substantial part of its annual adspend towards it
Absolutely. If we look at our clients in the GroupM universe, currently, close to 150 odd brands actively use influencer marketing as a strategy to reach their consumers. Importantly, they are using it in more than one area. One is to drive consideration because the nature of influencer marketing is such that influencers create content which their followers are highly engaged with. That’s one of the reasons that influencers are becoming very relevant in a brand’s marketing mix: to drive engagement.
We are also seeing some brands now moving from driving consideration to engagement to actual action, as the tech infrastructure becomes increasingly better, to enable a call-to-action where the consumer can directly click on a link to buy a service or product. So we are seeing that shift too with brands in a mid-to-lower funnel.
In fact, during the lockdown, nobody could go out & shoot content or create TVCs, etc. That’s when we started working with a lot of brands as an alternative to traditional television commercials or traditional web commercials, and influencers became very relevant in that environment. But as brands started working with them, they realised that they can start working with influencers on a standalone basis- as an integral part of their marketing strategy, and not just because they can’t do something else. And that’s the shift that has happened in the last two years.
On how much percentage of a brand’s annual marketing/ ad spends is allocated today to influencer marketing
The way we look at brands right now we see three buckets of clients: There are brands which have become native to influencer marketing who allocate close to 25-30 per cent of their budgets to influencer marketing. It’s a very integral part of their marketing strategy. D2C brands make up a large mix within this, but we are seeing even FMCG and especially, personal care brands allocating more than 15-20 percent of their budgets on influencer marketing. They may not be in the top four or five, but they are surely in the mid to lower funnel range. These brands have realised that it’s a great way to create ‘Share of Voice’ (SOV). They can’t fight the ‘big boys’ in the media space, especially in the CPG (consumer packaged goods) category, SOV is very critical. And influencer marketing becomes a great tool to drive SOV. And hence these brands are over-indexed in influencer marketing than their peers, which are the larger organisations.
Loreal- one of our clients- although a big name, in specific categories like personal care and especially in cosmetics range like Maybelline, they are highly over-indexed in influencer marketing. They had an ‘always-on’ influencer marketing strategy throughout the year. And that’s the other shift we are seeing from stand-alone campaigns. It also allows you to have a threshold level of visibility, engagement, and driving action from the consumer through the year- that’s the beauty of influencer marketing.
Also, there’s the middle bucket of the brands which have become mature, that would have anywhere from 10 to 25 per cent of its ad spend allocation. These are brands which have tried using influencer marketing and continue using it but it’s not part of their ‘always on’ strategy for them. They look at it very tactically, a lot of their influencer marketing is around events that they do. And then the set of influencers they work with amplifies the work they do. So, they use it differently as a strategic mix. But even here we see anywhere from five to ten per cent spending allocation.
And then there’s still a very large bucket of clients who are curious and they are wondering how to work with influencer marketing. They are trying to gauge and test the waters & see what's in it for them, and what kind of metrics they can work with. So they have a lot of questions in their mind on how they quantify their investment, how they define ROI in this case, is there some kind of measurement that’s credible. And that is where we come in with INCA. With the tech that we have built, today we can analyse anywhere close to 45,000 influencers in India & have a very detailed understanding of not only what space they create content in. We also have a detailed understanding of their audiences, their demographic, and what part of geography they come from. Stuff like this has not been organised in many years as it’s an evolving space, which is also why we took out the INCA influencer marketing report- the first edition of which came out last year.
Our estimate about the industry last year was close to Rs 900 crore, and this is not the money being spent on media or the money being spent on boosting the content being created. This is money being spent specifically and directly on influencers, which is a significant number. And it's only growing 25-30 per cent YoY.
And not just data, but also a lot of qualitative research as well that’s going into it, to quantify the ROI or shift that’s happening when we work with an influencer or celebrity influencers. And the more we do it, the more we see brands getting warmed up to it. It's suddenly moving out of a space they didn’t understand to a space they can make sense of their investment.
On ASCI stricture of ‘paid sponsorship’ tag affecting the influencer marketing revenue
Not really because the way we advise our clients to work with influences is not to force the influencer to post your content. The idea is to create content that’s organic to the influencer and has a brand message embedded. As long as brands do that, there’s content for their followers to consume that’s in line with their expectations. The moment you stray from that and you start using the influencer purely as a reach medium then I think we are moving away from the basic principles of influencer marketing. So it's not really about the guidelines, which are only making it clear that whatever content you are consuming is sponsored by someone. It’s a disclaimer or statement we are making upfront so it's transparent. That’s a good thing, and as long as the content remains true to what the influencer makes regularly there’s no difference. On the other hand, even without that paid content tag if you stray away from this principle you’ll not get the required reach.
On how GroupM ensures it stays in the realm of “responsible advertising”
Creativity doesn’t mean a licence to abuse or licence to harm someone. Creativity is about connecting with people in ways that surprise them positively, not negatively. And for us “responsible investment” is a very huge part of what we do at GroupM. We have something called the Responsible Investment (RI) framework that we started applying to the content that we produce.
One is the content that we produce with influencers around INCA. Then there is the long-form content we produce in the motion content group, such as web series, films as well as TV shows where we are bringing RI.
From this perspective we have defined four goals or areas for us: The first is around sustainability, second is DEI (Diversity, equity and inclusion) with a magnifying glass into gender equality. The third is around primary education, because in India about 40 percent of kids drop out of school after fifth grade, and there are a lot of companies which are trying to do something to change this. The fourth is around financial inclusion. So these are the four pillars that we have defined.
So the question we are asking is how can we bring any of these themes into the shows we are doing. And we believe that if we need to truly make a difference in the world then habits have to change. And I think “content” is the most powerful way to do that. Content creates cultures, passion and habits, even the way we behave with each other. And one of the routes to driving RI is how we create this content. We believe as an organisation we have to be the catalyst for the world to come around these four principles.
Creators and platforms are forever chasing a formula that they think works. Today, there’s a conflict in the creative space when it comes to content. Where at one level we are probably becoming more regressive because we have seen that certain regressive content has worked, and everybody wants to do the same kind of thing. On the other side, we see a lot of independent creators who want to create content which makes a positive difference. That’s why we are committed to them and putting our money behind them. These productions are investments done by GroupM, as we believe as such an important player in the media space in India if we don’t do it then we can’t expect others to do it.
On how Netflix introducing ad-supported plans impacts OTT viewership
The fact is that there’s some great content being produced today, but the access to that content is limited today because of the sheer investment a subscriber/ audience has to make to watch that content.
On OTTs, unlike on TV, if somebody wants to watch content across different platforms and different languages, then they need to be in the top one per cent in the country, otherwise, nobody can afford it. So clearly, from an economic perspective while it does make sense for the channels as they will be able to get more viewership. But from the audience’s perspective, it makes the content more democratic. So I think it’s great if more platforms open up to that and understand that.
On getting brands to achieve cost efficient & strategic ad spends during these times of rising inflation, and the impact on AdEx
We don’t anticipate it to impact AdEx as much, it's more about how those spends can stretch longer or do more for me. What it is potentially doing is, forcing organisations to go back to the question of efficiency. So, you start moving towards value communication at such times. But the value in the equation is being driven by questions such as how can we make it reach more people, are there different ways to reach them, and can I engage with them more and drive more actions?
One big trend I’m seeing is that it's forcing organisations to look inwards. And ask what are those systems and processes that they can build more efficiency to save cost, so as to reduce impact on the consumer. Be it in the way they are packaging their products, or the way they are distributing them physically. So, they are trying to build more efficiencies into their own processes to be able to cut costs, so they don’t need to pass on the burden of inflationary pressure they are facing onto the consumers.
The other question is, how do they help the consumer get to their product in different ways which are not necessarily the way in which they have been used to buying the product. So new distribution channels, whether its D2C or e-marketplaces or whether its small kiosks or QSRs that have been set up to create a physical space as well. So there’s a lot of innovation happening at the ‘point of sale’ and how the consumer accesses the product.
Yes, there is some part of the pressure which gets passed onto the consumer but that’s being done in different ways. Like, probably reducing the size of the product while keeping the price same as before, so it won’t pinch your monthly budget as much. The reality is that outside of the one per cent of the country’s population, these pressures that we are going through mean a lot to everybody else. If you are not sensitive to what consumers are going through, it's not good business as well. And honestly, we are seeing this sensitivity very clearly across our clients. These are some of the biggest CPGs (consumer packaged goods) that we manage. And CPG is where one feels the pinch the most because these are staple, everyday items which you need to run your home. These organisations are being extremely realistic about the fact that they need to start at home before they start putting pressure on the consumer.
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