Influencer marketing in India to become more lucrative, may reach Rs 3,375 crore by 2026: Report

The influencer marketing industry in India is all set to become more lucrative as it is estimated to hit Rs 3,375 crore by 2026 at a compound annual growth rate (CAGR) of 18 per cent. Influencer marketing in India is expected to grow by 25 per cent in 2024 from 2023, hitting Rs 2,344 crore versus Rs 1,875 crore last year, according to EY's Collective Artists Networks Big Bang Social Report. 

This can be attributed to the time that smartphone users spend on various social media platforms. Around 50 per cent of the time spent on smartphones is on social media platforms. Of the many platforms out there, mobile phone users preferred to consume content made/marketed by influencers on Instagram and YouTube. 

The marketing tool has gained massive popularity in the recent as 75 per cent brands are expected to consider influencer marketing as part of their marketing strategy. Around 86 per cent of influencers are expected to see a growth of more than 10 per cent in their income over the next 2 years. 

It added that 56 per cent of the brands invested more than 2 per cent towards influencer marketing. Around 70 per cent of the brands are planning to keep their budgets for influencer marketing constant or hiking it in 2024. 

Half of these brands are planning to amp up the cash pumped into influencer marketing by around 10 per cent, the report mentioned. While influencer marketing may be a great proposition for those who have a huge following on social media, that is not the only criteria that brands consider while choosing influencers as ambassadors. 

Around 27 per cent brands consider engagement rate whereas 26 per cent factor in the quality of target audience as a key criteria for selecting/rejecting influencers. Following this, some brands also consider industry specialisation (24 per cent) while followers (23 per cent) come at the fourth spot. 

Furthermore, the report indicates that brands are using a mix of large and nano influencers (those with 100-10,000 followers) equally. Around 47 per cent of brands preferred nano influencers over large influencers. 

This choice has a dual advantage for brands-- lower cost per reach and high engagement rate compared to large influencers. Nano influencers had an engagement of nearly 4 per cent whereas in case of large influencers, the engagement rate teetered between 1.5 per cent to 2.5 per cent. 

Nearly 61 per cent of the brands use influencers for driving awareness and social media engagement around their brands. Of this, 32 per cent use influencer marketing to spread brand awareness whereas 29 per cent use it to drive social media engagement. 

Approximately 22 per cent brands also use influencer marketing for lead generation whereas the remaining 17 per cent use the tool for sales conversion. 

The report also states that the growth of influencer marketing in India is likely to be driven by segments such as lifestyle, fashion and beauty. Sectors like automobiles, e-commerce and FMCG are also expected to increase their spends on influencer marketing. 

Commenting on the findings of the report, Amiya Swarup, Partner, Marketing Advisory, EY India said, “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. 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.”