The Shape of the Influencer Economy
Insights into the current state of the Influencer Ecosystem
In Episode 5 of The Media Room, media expert and author Vanita Kohli-Khandekar speaks to 2 experts, Harikrishnan Pillai co-founder and chief executive officer of digital marketing agency The Small Big Idea as well as Kalyan Kumar, co-founder and CEO of influencer marketing platform KlugKlug. They discuss the influencer economy, how marketing campaigns utilise influencers, the duopoly of Meta and Google, breaking down parameters and levels within the ecosystem and the effect of recent events on current trends. Tune in for insights on how brands view influencers and how they capitalise on their influence.
NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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TRANSCRIPT
Vanita Kohli-Khandekar (Host): The Advertising Standards Council of India or ASCI defines an influencer as “Someone who has access to an audience and the power to affect their purchasing decisions or opinions about a product, service, brand or experience, because of the influencer’s authority, knowledge, position, or relationship with their audience.” There are estimated to be anywhere from 3.5 to 5 million influencers in India. Their rise has created a parallel media ecosystem of creators, digital agencies and platforms that has been getting a lot of attention and money. In 2023, the last year for which numbers are available, marketers spent about 10 to 12 per cent of overall digital advertising spends on influencers. That is Rs 5,700 crore to get influencers to push or sell products.
The reasons are not difficult to fathom.
There are about 524 million Indians online. They spend about 22 hours a month browsing through Instagram, YouTube, Facebook and other apps according to Comscore. This is data from late last year. Of all the things they watch on these, media and entertainment content is the top driver of engagement at 39 per cent. Influencer content comes second at 27 per cent. This then is the media on which marketers are trying to reach their consumers.
Footnote - Engagement is essentially defined by likes, reposts, comments and shares. For instance, Bhuvan Bam has 19.3 million followers on Instagram; but they engaged with his work only 3.2 million times in June 2024. In the same period, comic The Rebel Kid (Apoorva Makhija) had just 1.5 million followers on Instagram who engaged with her videos 5.2 million times.
Creators have been around since 2015-16. But the shift towards using influencers for marketing began during the pandemic when no new films, TV shows or series were being shot. And advertisers were looking for content to attach themselves to. That is when influencers started being used as media vehicles.
To talk more on how the whole influencer ecosystem works I have with me two very special guests. Harikrishnan Pillai co-founder and chief executive officer of The Small Big Idea, a Mumbai based digital agency which has done loads of work in the influencer marketing area. And Kalyan Kumar, co-founder and CEO of Klug Klug an influencer marketing platform that sits on tonnes of data on how this space operates. Over to Hari and Kalyan.
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Vanita Kohli-Khandekar: Hi Hari, hi Kalyan. Thank you for joining me for this one. You know, first thing I want to, and we've had this discussion before, but give my listeners a sense of what is this whole influencer ecosystem all about?
How is it used by marketers? Because to me, it looks like a parallel media ecosystem is developing, which brands are using to their end and very, very effectively. So Hari, from the agency perspective and Kalyan from the platform perspective, Hari, you want to take this first?
Harikrishnan Pillai: Yeah, absolutely. See, forget influencers or internet creators. Anybody with influence has always been used as a device to build up in it, right?
Politicians, cricketers, actors, your class CR, college school captain, you know, these are people with great influence and they've been always used by people to have certain impact. What internet obviously essentially did was it gave reach, it gave massive reach, it gave great speed, it gave results at such tectonic effects that people then started choosing it as careers and this became more structured, organised delivery mechanism for communication and building strong opinion. So that's really what this ecosystem is.
Now, what do we do as agencies is we try to find the right kind of opinion makers for the brands that we represent so that the messaging that is going out through your television ecosystem or a digital ad or a print ad or anything that the brand wants to do, can there be people and voices, right? Where the face is not a brand logo, the face is a relatable person that I've been speaking, consuming content for for the last few years. So let's talk about this campaign that we did recently for this brand which was looking at vaccination for adults.
Now, vaccination for kids is something that is pretty big, right? As soon as you're born, you know, the doctor will give you a big list and you have to get your kids when all those things done. Vaccination for adults is something that is not really a case.
2020 happened, COVID happened, vaccination for adults came back and that too with a bang, where we said that even adults need to be vaccines and they need to be taken care of. But that is just one, there are many such diseases that one can get after say 40, 50 that we can be protected through vaccines. So there is this disease called shingles, right?
And there is a vaccine that you can administer on yourself to ensure that you will be protected of that disease. Now, the problem is, I'm sure your listeners will resonate, not many would have heard about the disease called shingles, right? Or they would known about the disease for the last few years.
Vanita Kohli-Khandekar: Just to, just to the thing, it is your dormant influx virus which comes out in your 50s, correct? Because I have had it.
Harikrishnan Pillai: Correct, and you know about it, right?
Vanita Kohli-Khandekar: India, it's largely called shingles, yeah.
Harikrishnan Pillai: So Mr. Bachchan was the voice for this particular brand and he went on and said that listen, you could have this. Now, that's the ad. Now, how do you amplify that?
You can keep playing Mr. Bachchan again and again and again, but that's just one unit. How do you now get something a little more relatable to the audience? So there we got people, influencers slash creators, artists above 50 years and we got them to discuss their issues.
Now, the problem with shingles is that the co-morbidities kind of accelerate that disease. Now, I might not know shingles, but I know chickenpox. I don't know shingles, but I know diabetes.
I don't know shingles, but I know that if at some point of time as a kid, even if I had some dormant presence of chickenpox, I will get shingles. Then we casted those kind of influencers, the people who know that there have been history of diabetes with them and they are public figures who people know that they have had diabetes or they've had some heart issues or they have, for example, they've had cancer, they fought cancer sometime back. And then when they say it, the conversation becomes even more relatable.
So what Mr. Bachchan would give is, it gives you a larger reach and a voice of authority and what these customised people, influencers that we kind of brought on board would give you is, they'd give you more relatability, right? So that's like a quick example that I could give you.
Vanita Kohli-Khandekar: It's not difficult to guess the brand, assuming that is GlaxoSmithKline because that's the campaign I've seen on air. Could you give me some names of the smaller influencers, creators you use?
Harikrishnan Pillai: The ones that we use were relatively bigger, like for example, Remo D’Souza.
Vanita Kohli-Khandekar: I remember Manoj Pahwa was there.
Harikrishnan Pillai: Manoj Pahwa was a part of the ad. So for example, Visa, right? She had had cancer.
She was again a part of this campaign. So Archanapur at Singh, again, someone you can relate with. So these are some of the names that we did use for the campaign and it did deliver in terms of the chatter that we wanted to kind of start it.
Vanita Kohli-Khandekar: So this is a great example, Kalyan, because you and I have discussed this, but I find it, I will come back to how it works in more detail a bit, but I find this whole hierarchy of celebrities, creators, influencers, who will be a brand ambassador and who will be an influencer. Where are we on this. What are the differentiations?
Kalyan Kumar: So what's the difference between a brand ambassador, a celeb and an influencer? I think the starting point is, just to say, I'm going to take an agency response as well. I've started running my influencer marketing agency in 2015 before the word influencer marketing existed.
If you remember those days, it was all about Twitter trending and hacking that algo for some moment in the sun kind of visibility. Influencer marketing is about influence. Influence is about credibility.
And therefore, who are your brand advocates versus who are your visibility builders? Kind of builds into that hierarchy. And I think Hari, you said it very nicely.
If it's a large communication that wants a larger visibility, the role of the big influencers or celebs is more about visibility and to some extent, the credibility. But really, as you go deeper and deeper into the involvement, that's where the role of influencers was smaller. So I say the macro influencers is the term that you use, who are the mid-range guys, who are still wide and large enough, but slightly more credible to the conversation, to the smallest micros and nanos, who are people who I relate to, who I trust and who are specialists in this category to give it what the old term was, the RTB, the reason to believe that, hey, listen, I believe that this works for me. The other philosophical one I have in terms of approach is to say, look, celebs are your brand ambassador worthy largely. They are celebs.
Let's say they have large picture. They're cricketers or they're actors or what they are. And they incidentally have large social media profiles.
So they've come in from the other end of the spectrum versus to me, an influencer or a creator is someone who stuck their teeth online, started with stepping up for a piece of kind of content that they believed in or whatever it is by the genre and happened to start becoming bigger, bigger and really large. And maybe some have even crossed over to the other side of the screen and said, now they are celebrities. So that's the other bit.
And all of this influencer marketing business really, while it was Twitter, I think the world changed with Instagram and then the world really changed actually with TikTok. It just truly democratised content versus for the few elites on Instagram, which was a small platform versus YouTuber content, which was again, few elites to a truly democratised version that everyone from Chhapra to Ernakulam could come online. And then the wisdom of marketing started sinking in to say, hey, we need to find this influencer by this role, by this logic.
In fact, even at Klug Klug today, when we speak about the platform, we say that, look, why are you doing any influencer marketing? And trust me, I think we have been the evangelists, but we also feel a lot of influencer marketing has grown on the power of FOMO. L'Oreal does it.
So Lakme does it. So Mamad does it to everyone. But the sciencing of it is why are we doing?
What is the role of influencer marketing in your media mix? Strategic question. And you do your inciting and content and everything.
And then you test that communication and all of that when you build a brand ad. A lot of that science is thrown on the side and just fixed in for the cultural thing. I need a brand ambassador.
Unless I'll keep looking at influences from a brand ambassador perspective versus an influencer perspective. So fitments can be anything, but is the influencer doing the job of influencing?
Vanita Kohli-Khandekar: You mentioned that Klug Klug sits on data for how many influencers, you said, and you mine that for insights. Could you take us through that? Because there's a question then attached to that.
Kalyan Kumar: So the database size now exceeds 418 million across 150 plus countries, 35,000 cities across Instagram, Tik Tok, YouTube, Snapchat, LinkedIn. But the promise of Klug is not just scale and size. We're saying that look, the reason we've gone and pressed the hard button on saying anybody can be an influencer to Hari's point.
Can I find an influencer in Meerut with followers in Meerut who talk about health and wellness and I want to promote a product like Muscle Grace? I think that is a very difficult question to ask an agency and then not pack that up with data for thinking. So we have brought in that thinking saying that look, all your marketing, all your performance marketing and online marketing is about defining your audiences and then targeting them, right?
In the case of influencers, we're bringing the same logic saying that look, define your audiences. I want an influencer from anywhere in the world for that matter, whose followers should be from Guwahati, who should be female, who should be interested in beauty. Can you help me with that media-like thinking?
And Klug Klug will tell you who satisfies those media audiences before you bring in your subjective lens of does he or she fit in with my brand, persona, engagement rate, content genre. I said, you know, target your audience, build for success and that is a massive gap which is largely being very quickly now being absorbed by CMOs across the planet to say, hey, we need to science this stuff now.
Vanita Kohli-Khandekar: Super. Hari, I want you in here on the how's and why's of it.
You know, a brand comes to you, they don't come to you saying that we want an influencer to endorse. They come to you because they have a communication question or a problem to be solved, you know, or a communication objective.how do you decide? Again, if you could share an example, how does it work precisely?
Harikrishnan Pillai: Let me give you something that we did recently for the Champions Trophy in Dubai. So Red Label came to us and they said that, listen, we want to look at chai as the connector between all countries, right? So it was an India-Pakistan match and they didn't want to say that, listen, you need to be divided.
We are saying that, listen, you might disagree on multiple things but chai is one thing that this community agrees. the first thing is content and context, right? So the content and context comes through where, you know, what is the narrative that you want to say.
So Red Label will say, release an ad which says that, hey, you know, it's cricket and it's India-Pakistan, come together, let's do it. Now, you see, anybody and everybody who understands or likes chai will get aware about it for sure. But what will make it relevant, right?
So that C is content and context, R is relevance, is where these creators and influencers come through. Now, what happens is today we're discussing chai but I cannot use Sachin Tendulkar as a relatable element. I will use Varun Chakravorty as a relatable element because he's really having a go at what is happening.
That is my relevance piece, correct? So that is your R that kind of comes in. I might do the Sachin for the larger ad but I use Varun for relevance.
And then A is amplification, right? So wherein what you do here is, can I build something that is replicable? So for example, what we did was there was a chai and we did chai with two handles, right?
Now, if you have two people holding it, it looks like a cup but it's actually also a cup of chai, right? So that's where amplification kind of comes in. So that's A.
And then P is ensuring that that narrative is scaled up to a massive level wherein that initial thought that you had was that chai is one thing that brings you together. So we call this strategy CRAP, right? C-R-A-P, which basically uses this entire piece of building the main messaging, building alliances and references through people that you relate to it, amplifying it and then pulling that story back in.
So hence the red label example, right? So you came in with that unit, they did not want to spend to create a big ad but they wanted to build in relevant pieces. So what you avoid and do is, where can I find Indian and Pakistani creators and influencers who are used to creating content about each other's countries, right?
And who consume cricket, who do talk about cinema, who do talk about, you know, people coming together because they're living on a neutral land in any which way and then you get them to build that conversation. So that is your mid-level influencers but there will be five of them. Then you get 200 such people who are lower to bring in the mass.
So as a user, I'm on my phone, I see one big creator doing this but suddenly I'm seeing 30 other creators doing it, right? So it increases my OTS.
Vanita Kohli-Khandekar: These influencers are called something mega, nano, macro, nano, micro. In your parlance, they have been categorised. This is more for my listeners benefit actually.
Harikrishnan Pillai: No, no, absolutely and I'm sure Kalyan will put better perspective.
Vanita Kohli-Khandekar: So at the top, you have the big guy, the Sachin Tendulkar. Then at the second level, you will have Varun Chakraborty and then at third level, you'll have probably dozens.
Harikrishnan Pillai: You have probably one more level macro which is the influencers. Then you have a micro which will give you more reach and then nano. Nano are like really even smaller than that but it looks like a movement.
It's like the prime minister coming to a city to address the crowd. There is a chief minister, you know, candidate who's there but there is a party workers who are actually making it look big, you know. Just imagine if it's just the prime minister and the chief minister sat in the room.
It's really like that, yeah.
Vanita Kohli-Khandekar: So the nano and the micro also double as audience, correct?
Harikrishnan Pillai: Double as audience and they show volume. They are the ones who drive the fact that oh, this audio is trending, right? Oh, this particular ad seems to be trending because it's not one or two people doing it.
There are hundreds and 200 and 500 people doing it, right? So they give you the mirage of scale.
Vanita Kohli-Khandekar: But Kalyan, I want to get in on the macro, micro, nano thingy but also on the whole, you know, Hari's brought a couple of brands on the whole reach versus engagement thing because, you know, our social media penetration is huge. 96% of all internet browsing people are on some huge number of hours. I think 20-22 hours a month we do.
But the point is, you know, how real or how sustained is this? And then later a question for both of you on how useful this is for brand building or is it very category specific? So first off, macro, micro, nano and what are the metrics?
How do you tackle that?
Kalyan Kumar: Hey, thanks, Vanita. And also I'm just going to segue from what Hari said, which is that cascading pyramid is very important. You need one celeb.
You need 20 of those sub-celeb of 10. Then you need or let's say moving into the macros, which is to say, hey, I need 50 micros and 300 nanos and so on. That pretty much summarises it.
What it gives you is saying that, look, someone triggers the conversation, the others build the resonance around it and the lowest category builds resonance and relevance in the category of spin. The other advantage really, and to your, I think your pointed question was efficacy, which is depending on a category, let's say, you know what, I would, like, I'm going to make some rather provocative statements here. Like, if you are Lakme, you've got Deepika Padukone talking about your product.
I would say just ditch the entire mega-influencer thing. In the influencer marketing of your mix, you need people to drive cool and therefore you need more smaller influencers. So if you would have to pay Deepika, let's say half a crore for that engagement or a crore and a half for that TVC and the overall engagement, and she gives you three posts on Instagram.
I'm just making stuff up in terms of exacts. At that cost, you could run a month-long campaign with thousand beauty influencers of the macro and micro and scale it up because you don't need the visibility and the markers of the celebrity on online. It's done.
It's there. Second is the efficacy. So the efficacy is obviously that it's much cheaper to get people who are smaller, who have less overlapping audiences and who speak within their communities and drive cool adoption, whatever, depending on the involvement of your product.
I like to do the hot crazy graph from How I Met Your Mother, which is, if you draw two lines, in general, barring a few outliers, which is to say, on one side, you map the size of an influencer and the other side, you map the credibility of their influencer. And I'm saying this with a disclaimer, barring a few outliers, it's inversely correlated. When you're trying to sell a product, it's to say that, look, the bigger I am, the less likely my followers are going to believe that I'm actually going to use this product.
I'm guessing nobody believed that Farhan Akhtar ever drove that A1 Maruti car for sale, but he made for a great brand ambassador. He had fitment, resonance, all of that. But this other problem with celebs that I've seen is they're not content creators.
So they're not frequent on the platform. They'll make one post in two months, and they have massive following. The day Deepika would have opened her account or any celeb, it would have piled up to millions of followers.
But the platforms also have a role, right? They don't give. So you'll see, celebs will never have more than 0.5 to 1.2% engagement in general. As a cohort, in fact, we have data for about 3,000 plus influencers at a global level to more than 25, 30 million followers with an average engagement rate of 0.5 to 0.7%.
Vanita Kohli-Khandekar: define engagement for my listeners?
Kalyan Kumar: The one I'm taking today is on any given day, if I make a post, how many likes, comments, and shares and saves do I have divided by the number of followers? Now, as you go down the hierarchy into macro, micro, nano, it keeps getting higher, which means I have a lesser number of followers.
I'm actually a content creator. I post very frequently, which means the platform likes me as a creator. So it rewards me by saying, and people engage with that content, the frequency of content results and the quality of your content results in higher engagement.
So you're seeing more people. So effectively, the other thing is, the larger the influencer, as a percentage, the lesser the number of people will see the content. And that's the influence marketing science.
And this is well known. Like there are now, I think we spoke about it like eight years ago, but now there is like, you'd probably find maybe close to half a million articles from all us marketers saying, hey, the power of micro influences, nano influences, etc. So that's the science.
The lack of overlap between those audiences is much lesser. Their ability to convince somebody that, hey, I like this product for this reason. So I go back to credibility and influence.
An influencer's job should be to influence is on credibility. And I think that goes further down the order. It's also very price effective, but it depends.
The other questions to ask is what am I a new brand? So what's my brand's lifecycle? At which point am I?
If I've just launched recently, I think I need the seller presence and online as well as offline and drive it into other parameters. And if you're already L'Oreal or Lakme, you know that everybody knows you.. you just need to drive the coolness within this thing and sustain it.
Vanita Kohli-Khandekar: That's exactly my next question, that, you know, is influencer marketing or plugging into that ecosystem, is it for every brand? And even if it is for every brand, the context and the texture of it, I think would change depending on a thousand variables, you know, where is the lifecycle? Which season is it?
Which brand is it? You know, the number of variables when it comes to communication are huge. Hari, anything you'd like to put in here?
Because it's like saying that TV is only meant for building consumer brand building and digital is meant for performance marketing, but that's not entirely true. Similarly, when you talk about influencer, after that, I want you guys to touch upon this fact that this is UGC, user generated content versus professionally curated and created content. So, does the way you look at it as marketers or as agencies differ?
First, what stage of brand and what kind of brands does it work for? Hari?
Harikrishnan Pillai: I completely agree with what Kalyan said, you know, I mean, if you are somebody who's known in the market and unless there is a solid reason for you to bring in a celebrity, even our advice to people are like, just drop it, right? What you need to do, because what happens is, just imagine in a world like this, where the audience is consuming so much content and from so many different creators, pages, medium, you are banking all your money on one person, one ad, one unit, right? Now, just imagine, God forbid, it goes wrong, right?
You've just burnt all of that cash for nothing. Now, I'm saying this, break that down and say that, okay, listen, I have somebody who, I have 1000 people with 1000 voices reaching out to X number of people who could say the same thing, but my risk is relatively lower because I'm not riding on one line of communication, I'm not riding on one promo, one unit, one person. I think it's a very smart way of doing it, especially if you're an established player.
See, if you're not an established player and nobody knows you from Adam, then obviously the strategy is very different. But here, I think mitigation of risk through influencers, especially on asset power is brilliant, right? I think that's a very important piece.
It's like making a movie, you know, your story and your cast has to match, right? You can't have a narrative, which is something and you're casting influencers that don't really make sense and for which data analytics platforms like KlugKlug would really help you in driving or finding out whether these guys are going to do the job that you are out there to do, right? Now, the third piece is also how you use influencers.
Today, you want to use an influencer who is discussing your car and day after tomorrow, three days later, he's going to use, he's going to be talking about some other car. I mean, of course, they try to do embargoes and things like that now, but still, you know, the creator is selling and you're putting in money and audience is very smart. Now, they'll put in something, you'll check out the comments to really know what the audience thinks about that influencer deal.
You should just check the comments, right? And you will know what is the qualitative engagement that you're getting from it. So, it is really about what is the next in influencer.
For example, number one, longer term deals with having a certain pool of creators who are complementing each other, complementing the brand, having a complementing ecosystem beyond your brand and category. These are things that one should look at. Another thing which is really blowing up is founders, CXOs, themselves becoming the voice of the brand.
So, where they are saying that, you know, I need creators, but the one creator that really needs to be relevant for the brand is me, the voice, the founder. Because why do you use faces to promote brands? It's simple.
People don't believe in logos and colours and things like that. They believe in people. Now, because you don't have an in-house voice of credibility, you kind of lease credibility from celebrities or you lease credibility from influencers.
Now, why don't you put a face to it? And that's what, look at Bombay Shaving Company. I mean, the founder is out there being a creator of sorts where he's saying that, listen, this is who I am.
Look at the whole truth. The whole truth is built on the back of people believing that the founder really cares for the people who are going to consume that product. So, it's really about these elements that would probably define what's next in influencer marketing and how we approach influence in the form of individual.
Vanita Kohli-Khandekar: You brought up founders and stuff and I know I'm going away from the earlier next question I mentioned to you. ASCII has a definition for an influencer. There's a lot of structure which is coming to how influencers are defined, used.
There is a system in place to regulate them. I think last year ASCII did something under 3,000. Complaints were filed against.
But, you know, the whole question of credibility and maybe it is not so applicable to a brand of jeans or to a brand of television. But when it comes to financial advice, financial banking and financial products, when it comes to health products or even a lot of lifestyle products, I find cooking videos are full of impractical stuff. I mean, no dish can look like that.
It's obviously some stuff has been done to make it look like that. But my point is how do you tackle as custodians of the brand or as people who are dealing with this brand and are the go between how do you deal with the credibility. I mean, SEBI, I know last year banned 15,000 influencers banned or they pulled out that content from online and they can't offer financial advice to people.
I can imagine that for Pepe Jeans, you mentioned Shakti Mohan last year, I remember Hari. She's a dancer. So, you know, she's piroting in a Pepe Jeans and she's showing the flexibility of the jeans.
But for example, in the case of GlaxoSmithKline is a blue chip company. So, if it is coming out with something, you know, it's been vetted. But you have some random company coming out with some energy pills or something or some guy who's giving you financial advice and, you know, the scams online have been huge.
Kalyan Kumar: It's tricky dealing with clients because if they have made up their minds about the way they see things as a brand manager, you know, I have certain aesthetics, let's say, and I wanted to be in that line. So, your question was about production versus UGC as well. To say that, look, we actually as custodians would push back and say, look, try not to overproduce the content.
You're not making a TVC. You're not even making a DVC. Keep it in line with the influencer has a certain style of making content, which seems resonating with the audience.
Respect that. The philosophy of influencer marketing is very different from paid marketing or TVCs and DVCs, which is those ideas, you make a piece of content and you target audiences. The content choosing audiences is essentially your paid and typical advertising.
Whereas the philosophical difference here is audiences choosing content when you're influencers and that demands continuity of tonality and treatment. So the moment you produce it so much that it stands out, if your production quality is so high that it looks like an ad, you better run it somewhere else. Of course, these are not finite lines.
There'll be overlaps that are really well produced and with AI and all coming in, everyone can make some stellar videos. That's one. The second was, therefore, we say, look, this UGC thing, of course, there's no such thing as UGC per se, because it's all engineered UGC.
No one's going to talk about a brand about out of the goodness of their hearts. And the second part of the trust bit is we're saying, look, brands and regulations and ASCII is making things, hey, disclosure, buyer beware, and don't go outside claims that step outside brand truths. So if you can claim it as a brand, let the influencer not outstep that claim.
I would just say that, look, there's a briefing, there's a requirement. And lastly, one of the lenses, we say that, look, think more like a CEO than a brand manager, because then you will be able to see, hey, what's the business outcome, the relevance, et cetera, that you will try to build versus saying, hey, aesthetics, containments, guardrails of how my brand should look. The influencer is not how my brand should look.
Your influencer is there to be an advocate.
Vanita Kohli-Khandekar: Hari, you want to step in?
Harikrishnan Pillai: One thing that I think influencer agencies and influencers probably don't like too much about us is that we ensure that the guardrails of the brands are not compromised to ensure creative narrative and creative freedom, right? Because for us, it's a Venn diagram, right? This is what the brand stands for.
This is what you stand for. You have to build the content in that intersection. It cannot be that, oh, my audience has been built from nothing.
So this is what they like to see. And that's what I can talk in class language because they will engage more with me. So please give me your brand.
Let me put some abuses around it and sell your brand. We control it. We say absolutely not, right?
The intersection has to be within what the brand stands for and what you stand for and anything that is outside of it, you might stand for it. But if that is not in the intersection that the brand stands for, we don't allow it to happen, right? So that particular piece, though we always keep getting a feedback that you're curtailing freedom, you're making us move away from who we really are.
But the fact remains that the check that's coming our way, both the agencies and the creators way, is coming from an entity which has more to lose than anybody else in this tri-party ecosystem. So I think that is one thing which I think we're very, very strong about. And you see anything else that is life changing, right?
Money, health, and things like that. See, forget influencer marketing. Generally, it is governed by larger things, right?
I mean, generally, anything about medicines needs governed by a larger body. Anything about financial advices is governed by a larger body. It's just that for these years, it was just ignored because nobody realised at the policy level that this is really making impact.
It came out so strongly. It's like, you know, companies making policies about working from home. Once you realise that your top employee is sitting and sleeping at home, then that's when you realise the version of this policy is not really working.
So it is suddenly everybody's woken up because you are seeing large, massive impacts being done in areas, especially that is largely governed, which is finance, health, and so on and so forth. So I think it had to happen. It's a little late, but I'm glad it's happening.
And it's good for everybody, right? Order is good for everyone. And on production, right?
One of the questions that you asked, which is around production quality, I mean, I agree. See, the point is these guys have grown from very, we're creating content in bad looking rooms, you know, with the fan going very slow because the regulator isn't working. You know, your jug is broken, you know, your posters that you're ashamed of seeing 10 years back, you know, on your wall to what you are today.
Now, suddenly, if you see an overproduced piece of content on your content, I mean, your core fans is going to say “You have sold out.”, right? And that's not what you want to do. You know, in your narrative, you still want to say that boss, I'm struggling.
Nobody wants to support a successful person. They all want to support this underdog who's struggling. So if they, if you don't have financial struggles, so initially you get audiences because you have financial struggles.
Then when you're sorted financially, then you need to say that problem. I'm going through emotional downturn because if you're not screwed up in your life, your audience is not going to support you.
Vanita Kohli-Khandekar: That is so sad. I mean, why can't I support Shahrukh and Amitabh even though they are successful? But this is very interesting.
If I was to say, you know, at one level, this whole influencer ecosystem and it's become a critical part of how we react to media or what it is in the media. We're talking about 10-12% of all digital ad spends going to them. I mean, last number that I looked at and I spoke to several agencies.
So roughly between five and a half to 6,000 crore is being spent on influencer marketing in India. This is numbers from EY and Publicis and all these people. So I vetted this number across various people.
But my point is much of this money, in fact, I would say that a hundred percent of this money is going to Google and Meta, correct? Because those are the only two companies who have products, a YouTube and an Insta, which have a substantial role to play in the social media ecosystem. Are there any other companies?
A and B, Kalyan, I want you to step in on any major things that you see when you look at data globally, because you're seeing 418 million. Anything, you know, that you see globally, you would like. First question, Hari, two companies and Kalyan, feel free to jump in on that.
Any comments there? I know we all don't want to offend the big brothers in the room, but any comments?
Harikrishnan Pillai: I've been following your articles and I know there is like, you've been, you picked this up quite a few times.
Vanita Kohli-Khandekar: Because I think an unequal ecosystem, they're a very nice company. I've had perfectly nice interactions with them. But it is a duopoly.
And duopoly, I mean, even if you look at airlines, you have only Indigo and Air India now, you know, for all practical purposes. Duopolies are not good for consumers. They're not good for the ecosystem.
Harikrishnan Pillai: You said, what, 6,000 crores, right? So now see, most of this money would go to the creators, right? The creator is on a platform.
And like I said, I'll dissect this. The numbers that you would have got, it should be twofold, right? One would be the money that is paid to creators.
The other would be money paid to amplify. Now, amplification could happen in two forms. One amplification could happen through smaller creators.
Second is amplification could happen through, okay, I'm widening this particular content and I'm widening this content and I'm pushing this content so that I get the numbers that I get. Now that part of the money, which is the pushed, whitelisted money, that obviously goes to the platform. But most of the rest actually goes to the creators and the managers.
Vanita Kohli-Khandekar: 40-50%. I would say even if you look at a rev share kind of thing, 40-50% must be going to creators.
Harikrishnan Pillai: Yeah, maybe a little more than that. I mean, Kalyan, you can also chime in. Yeah, but I think a little more than that.
I think maybe 70-30% would be a safe bet.
Vanita Kohli-Khandekar: Okay, but platform dominance. So, revenue is there, but platform dominance?
Harikrishnan Pillai: Of course, of course. YouTube and Instagram pretty much cover most of it and the rest generally goes to the others.
Vanita Kohli-Khandekar: Kalyan, you want to on the dominance bit and be on the global bit?
Kalyan Kumar: So, quick one. I'm breaking that down. I'm more in line with Hari.
Look, the influencer part of the money which is going to the creator would be, I mean, there are various numbers from two to three thousand crores. That's six thousand. Therefore, I'm guessing the remaining three thousand is at least boosting money.
But I was under the impression that influencer marketing is roughly in that two and a half thousand to three thousand crores.
Vanita Kohli-Khandekar: Then this is probably the money that goes to the influencer.
Kalyan Kumar: So, that would be bucketed as media money, not the influencer marketing money per se. Although, you know, various places or various practises at a group level, etc. Now, stepping back at a global level, again, we are seeing that, look, the guy who's giving everyone a run for the money is TikTok.
In Indonesia, it's influencer heavy five years before India happened in that sense. And it's crazy. And it's TikTok all the way.
Middle East is seeing a huge rise of Snapchat. So, we've got clients like Noon, etc., and Saudi, etc. They say, look, TikTok is good.
Instagram is almost become the Gen Z reject platform. And it's TikTok and it's Snapchat. Just to step in again, Twitter is now relegated to announcements for a very micro audience.
It's like 12 to 15 million would be the Indian audience of real people ever seen thing. The janta is just not there. The youth are not there.
It's just, I make an announcement, I have a big billion day sale or I have X, Y, Z, certain announcement led things. There's not much influencing happening outside of, unless you want some newsy stuff, optics, etc. on Twitter.
That's the global story. There's a lot more. India is protected.
But if I had to step back to a marketing, the duopoly is an outcome. People are free as influencers are, because there's just two social media platforms of size. That's where everybody is consuming content.
That's where influencers see reason to exist. And the argument I'd have is, let's say, I wouldn't even bother with Twitter spending as an influencer. If I said, look, all my audiences are getting covered for my youth audience, let's say, between Instagram and YouTube, why would I go outside of it?
Therefore, the philosophical one is to say, hey, okay, now it's a duopoly. Because there's nothing that has come up to scale and size that makes sense in a social media format. And we had all your me too's of Koos and all the others.
They've all died a slow death or dying or they're degrowing. Josh, Rosso. Yeah, yeah, all of the So many.
Vanita Kohli-Khandekar: I mean, I remember there were nine. I mean, TikTok got banned in 2019 or 2020. And at least half a dozen apps came within six months.
Kalyan Kumar: Do you remember Clubhouse? The funniest joke I have is threads. I said, who's on threads and why?
Vanita Kohli-Khandekar: They keep pushing it. Insta keeps pushing it.
Kalyan Kumar: They're pushing it and it's people are doing the thing, content creators are doing it out of homo. Why don't I just publish whatever I'm publishing here also there?
Vanita Kohli-Khandekar: My last question to both of you, and you know, this is something which is born from, so you know, social media is big within digital, social media is huge and growing and everything. But in the first three months of this year, and since late last year, advertising has been extremely soft across the board, across media. And this is something I'm tracking it right now for some other piece of work I'm doing.
Do you see that impacting how things happen on social and on the influencer side? Do you see also the threat of regulation? Because you had this case now of an influencer who's got FIRs filed, but that was more, he was like a political guy who made a really inappropriate comment, blah, blah, blah.
So I think there's a stick now to beat social media with. People needed something to beat it with. So A, softening advertising and B, this threat of regulation.
Do you see that coming in with some sort of breaks on the growth that we have been seeing? We've been seeing double-digit growth as far as ad revenues.
Kalyan Kumar: It's not just this first quarter. It's all of last year has been cautiousness. And now it's more caution.
So we are saying that, look, that's happening. But have we seen a growth in business? We've actually seen a massive growth.
We're saying, look, this really thankful for the influencer marketing story to have grown to the scale. But we are saying that, look, even if you deployed half the money that you did last year, at least as, look, look, we're saying, how about I help you generate 2x of outcomes on last year with half the money? First of all, among the top cohort of influencers, we analysed about 7.6 million profiles on Instagram. And you know that two-third of them have more than 60% inactive or fake followers. So if you deployed, statistically, two out of three influencers are not worth the money in the current cohort set. But that still leaves you with 1.9 million people to choose from, from all shapes and sizes, which brands will not get right without data. So data intervention is layer one. The layer two, which you said brands are still spending, they know that sometimes it works. We're saying, how do we make sure you take the role of luck out of this?
Which is the next statement I'll make is quite fun. I call it the great gender mismatch tragedy. So which is 13% or 14% of female profiles, female beauty influencers have at least 50% female followers.
Fun example, I've seen campaigns by the largest beauty brands, and it applies to everyone. It's not specific to any brand right now. You know, if I take a LAkME or a L'Oreal or anybody, or even a Pampers using all these starlets and stars who have come up into existence as recently become moms with 80% male followers, you know, so what are we doing?
You see, look, times are tough. It's winter economy, you need ROI, you need to bring data into saying that look, it's the audience is also there. So that inking is therefore becoming now mandated.
And if someone gets a story, and we're partnering with everybody in the ecosystem to say, hey, look, there's a solve here. But yes, that's the overall economy as everything is getting compressed in things and wars and tariffs, etc. There's just too many things that have happened this last 30 days alone.
That means, what's going on with the world that's happening, that's impacting the overall trend line.
Vanita Kohli-Khandekar: Got it. Hari, the same thing. But also, you know, will these tough times also raise questions on the point of influencer marketing?
Or you think that we are past those questions? I mean, I know it took off after the pandemic, really. But do you think any fundamental questions will be raised as advertising softens more?
Harikrishnan Pillai: Let's do some bit of comparison, right? Look at the show in question. The amount of conversation that this show had built.
You know, I feel there should have been 100 more brands associating with them. But they did not. They were hardly handful of brands who thought that it is very cool to be associated with the show because that's my audience.
But just imagine if a show like this was on television, or if this show like this was on YouTube, then let's do Apple to Apple. You're talking about the guy who got... I'm talking about the show that we're discussing, right, which was in context here.
The kind of, how do I say, like the kind of vibe that it has done the last one year, the reviews are out of the roof. The app got launched saying that come and watch this particular content at a certain price. That got downloaded as one of the top five apps.
You know, the speed of growth was brilliant. But look at the number of brands who are associated. A handful.
Very few marketers and agencies actually thought that it's a smart decision to join hands with them for the kind of reach that they had, right? For the kind of numbers that they had. So I think there is prudence.
There is prudence in brands. There is prudence in agencies who are saying that, yes, it is getting views. It is getting people excited.
But do you think it is the right fit when people said no? Correct. So I think this entire thing that has happened right now, the way it has happened, of course there is going to be impact on that.
But I don't think there is a direct impact to business because a very thin layer is being driven by sensationalization of content, which is the topic right now. The topic right now is why did you have to sensationalise conversation on a show like this, right?
Vanita Kohli-Khandekar: Given that, but I'm talking about ad slowdown also. I mean, we are talking about 7% growth in advertising. I mean, it's less than the nominal growth of GDP.
So are we talking about a fundamental questioning of do we need to spend money on this? I don't see digital spend being pulled back. I see more TV and print getting impacted.
But nevertheless, I just wanted to ask you, do you see from your clients and advertisers any pullback?
Harikrishnan Pillai: In terms of growth. Like last year, we'd actually grown in double digits and a little more. So I don't think there has been pullback on growth.
What I think is happening is some bit of prudence coming onto large impact spends that people were doing crazy. Like there was some crazy spends that happened. So I think it's rather than regrowth, I think it's normalisation of spends that's really happening rather than regrowth.
You know, that's what our outlook to this particular piece is. Having said that, I mean, what I gave you was outlook of the last year, right? But let me give you an outlook of last one month.
There are two large broadcasters who are our clients, who we were called and we were asked to build an SOP to ensure that we do not put out anything on our pages to ensure that some pieces like these don't happen. And definitely in the last one, the influencer activations have gone more stringent, slower and definitely about 10 to 12% numbers like if I take the last what 12 months the numbers that we would have done we have done about 10 to 12% lower in the last two months.
Vanita Kohli-Khandekar: Lower in what? In reach, engagement, revenues?
Harikrishnan Pillai: In revenue, in terms of absolute business, in terms of absolute business, they are about 10 to 12% lower in the last two months. The enquiries are in, proposals are being sent but it's slowed down right the creatives are getting better, more sharper, the briefs are getting more sharper, the people so I think it's just normalising.
Vanita Kohli-Khandekar: It's a good sign, it's evolving, it's maturing, it's reaching some sort of this thing. Fantastic, yeah this has been such a lovely conversation. Thank you so much Kalyan, thank you so much Hari for joining me and I hope the business booms this year too and brand safety also goes up.
Kalyan Kumar: Absolutely, thank you, thank you.
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Vanita Kohli-Khandekar (Host): Just a quick note on the regulation front. In the summer of 2021 the Advertising Standards Council of India came up with guidelines for influencer advertising on digital media. Since implementing them, ASCI has processed 2,767 complaints against brands and influencers for not declaring material connections. Over half of these came from influencers on Instagram and a fifth from those on YouTube.. This is going by the last published figures.
As the market mature, advertising soften, there will be some correction. But for now, as Hari and Kalyan say, growth is a given.
