Influencer marketing gets a new leash

What we are seeing work best are messages woven into the influencer's discourse. But that is also the problem regulators are trying to fix

While on the jury panel for an ad award competition, I was floored by the number of brands that use influencers. From soft drinks and snacks to skincare and fashion, the brand communication playbook is now incomplete without a significant influencer marketing component. If so much of this is happening, why should the government issue new rules (“Endorsement disclosures”, January 24) and even threaten influencers with a jail sentence for non-compliance?

Celebrities endorsing brands has been something that this country has had an overdose of, over the last two decades. If a film star or a cricket celebrity can feature in an ad and goad you to take a sip of a cola brand, drive a car or buy an apartment, why are the authorities worried about the damage influencer-based messages may cause?

Marshall McLuhan, in his classic Understanding Media, categorised media as “hot” and “cool”. He explained that a “hot” medium is high-definition and engages the consumer deeply like cinema; while a “cool” medium like a comic book is low-definition and requires the consumer to participate to extract value. If truth be told, the book was published in 1964 way before social media and the digital onslaught on our senses. If you extrapolate this theory, a video ad featuring a film star is clearly an ad; it is high-definition and delivers the message sharply. In contrast, an influencer-led video message is cool, it may or may not sell actively; it calls for the viewer to engage with the brand and the influencer. This is especially true when it comes to providing stock tips. Influencers are experts in building a loyal follower base by engaging with them regularly. You can ask them a question and get an answer. So consumers see influencers as “friends”. When that friend suggests that you buy a particular TV or stock, you take it more seriously; you engage with the message since you think that the influencer is your friend. Two years ago, the Advertising Standards Council of India and the government brought out guidelines to ensure that all paid content was tagged “sponsored” or “promotion”. Obviously that is not being seen in the same light as a celebrity-led ad. Hence the need for tighter measures.

While consumers are being warned about influencer ads, companies are also struggling with the task of managing the growing battalion of influencers. In an article in the HBR (“Does Influencer Marketing Really Pay Off”, November 24, 2022), the authors present a framework on how brands should select and use influencers. They say that 75 per cent of brands are using or planning to use influencers. After analysing social media posts by influencers (in China) numbering an astounding 5,800, the researchers have arrived at a way brands can use influencer-led marketing better. The posts in their dataset were written by 2,412 influencers for 861 brands across 29 product categories, at costs ranging from $200 to almost $100,000 per post. The researchers found that on average 1 per cent increase in influencer marketing spend led to an increase in engagement of 0.46 per cent, suggesting that the strategy can in fact yield positive RoI. So obviously influencer marketing is working, at one level. But they say that there are seven levers that brands have to use. The obvious one: the bigger the following of the influencer, the better the effect on RoI. Also, the more original the posts, the better the response. Then comes a few surprises. An influencer, who posts too frequently, does not help the brand. Similarly, brands should not obsess over the influencer-follower fit; if an influencer has a diverse set of followers that may actually be a positive. Links to the brand pages obviously work, no prizes for guessing that. But what came as a surprise is that pushing new products does not seem to help and has a negative effect. Is it possible that the followers don’t want their influencers to become empty mouthpieces for brand: “New cream from brand X works miracles”? Unlike a celebrity ad that screams “ad”, an influencer-led post is seen as more engaging and personal.

There are four sides to this equation: the brand, the influencer, the consumer and the regulators. What we are seeing work best are messages that are woven into the influencer’s natural discourse. But that is also the problem regulators have identified and are trying to fix. It is likely to assume that consumers will slowly realise that influencers are not really “friends” and when they endorse a brand, they too have received monetary or other inducements, just like a celebrity. Till that happens, some leash would be helpful to protect or at least alert the consumers.

Ambi Parameswaran is a best-selling author, independent brand stategist and founder Brand-building.com . He can be reached at ambimgp@brand-building.com