Many challenges of influencer marketing - From fake followers to transparency

A new survey conducted by Matter Communications in the US reveals consumers are making purchase decisions based on influencer content. The data shows 81% of respondents have either researched, purchased or considered purchasing a product or service after seeing friends, family or influencers post about it.

According to the survey, 69% of respondents are likely to trust a friend, family member or influencer recommendation over information coming directly from a brand. Consumers want authenticity from the influencers they follow, gravitating toward those that create relatable, original content or provide credible expertise.

While the US market can be quiet different from that of India, the influence of influencer marekting is growing exponentially. However, influencer marketing, a key component driving the creator economy, faces multiple issues, including the pestering problem of fake followers.

The creator economy faces various challenges and pitfalls, including dealing with algorithm changes, creating original and engaging content, monetizing their content, handling brand deals and sponsorships, and dealing with negative feedback or backlash, points out Ayushi Arora Gulyani, Founder & CEO, Media Corridors. 

To overcome these challenges, she adds, creators need to focus on creating high-quality content, building authentic relationships with their audience, staying up-to-date with industry trends, diversifying their revenue streams, and being transparent with their audience.

There are many things to be aware of while selecting profiles for influencer marketing, warns Sociowash Co-founder Pranav Agarwal. According to him, with new technologies there are many new fraudulent behaviours that one needs to be aware of.

Another challenge, he adds, is that there are different types of influencers and they are categorized very vaguely, which is why it's hard to determine who the suitable influencer match will be.

He cites a 2021 report which showed that 56% of brands say it is fairly difficult to find the right agent of influence while 22% state it is very difficult.

“This is easy to tackle as you can easily reach out to professionals who know how to differentiate and identify authentic influencers and to match them to the right brand. Pitfall that marketers might face is that in influencer marketing there is no way to find a clear-cut ROI. But this can be dealt with by being clear on how you are measuring performance. For example it could be brand awareness or track performance indicators like impressions and views on a website,” he adds.

Rubeena Singh, Country Manager, India and MENA, AnyMind Group, feels that though social media is a part of most people’s everyday lives, many accounts suffer from the reality of having many fake followers. 

“Many individuals aspire to reach the same heights as their ideal influencers. They want the same lively engagement, widespread attention, and, not least, those colossal follower counts. But using these giant influencer accounts as your yardstick might be a little misleading. You might want to check how many fake followers your favored accounts have. Platforms are often under fire for their fake followers' reputations and for allowing users to ‘buy’ their followers. One of the significant issues is the need for recognition of the work of content creators. Many micro and nano creators find it difficult to monetize their content due to the lack of support from large companies and platforms. Furthermore, many platforms are plagued by plagiarized content, which can affect the legitimacy of the content,” she says.

In terms of tackling these issues, she explains, one of the significant steps is to encourage collaboration between content creators and platforms.

“This will help to build a system of trust, allowing creators to be appropriately recognized for their work and enabling platforms to identify and remove plagiarized content. Additionally, platforms should invest in technologies such as machine learning and natural language processing to detect fake followers, plagiarism, and other malicious activities. The creators should take advantage of the growing platforms and resources available, allowing them to diversify their income streams and make their work more sustainable,” Rubeena Singh adds.

Hashtag Orange Founder Mukesh Vij, lists out the several challenges and pitfalls faced by the creator economy, which is built on the success of independent content creators and influencers:

1. Oversaturation: With the rise of social media, anyone can become a content creator or influencer. This has led to an oversaturation of the market, making it difficult for creators to stand out and for brands to find the right partners.
2. Monetization: Many creators struggle to monetize their content effectively. Advertising revenue and sponsorships are the primary sources of income for many, but they can be unreliable and difficult to secure.
3. Intellectual property: Creators often have to navigate complex intellectual property issues, such as copyright and trademark infringement. This can be particularly challenging in the digital world, where content can be easily shared and repurposed.
4. Burnout: The pressure to constantly create and publish content can take a toll on creators, leading to burnout and a decline in quality.

To address these challenges, Mukesh Vij suggest that creators can take several steps, such as:

1. Niche down: Creators who specialize in a specific niche are more likely to attract a loyal following and stand out from the competition.
2. Diversify revenue streams: Creators should explore multiple revenue streams beyond advertising and sponsorships, such as merchandise sales, affiliate marketing, and crowdfunding.
3. Protect intellectual property: Creators can protect their work by registering copyrights and trademarks and monitoring the use of their content online.
4. Prioritize mental health: Creators should take steps to avoid burnout, such as setting boundaries around work hours and taking breaks when needed.

In addition, he adds, brands can play a role in supporting creators by being transparent about their expectations and working with creators who have built authentic audiences.

ASCI Guidelines

It is in this context that the recent guidelines , issued by the Advertising Standards Council of India (ASCI) for influencers, should be analysed. How these guidelines will impact the influencer marketing field in India?

The Advertising Standards Council of India (ASCI) issued new guidelines for influencers, which require them to disclose any sponsored content and avoid making misleading claims. These guidelines, according to Mukesh Vij, are expected to have a significant impact on the influencer marketing field in India in several ways:

1. Increased transparency: The new guidelines require influencers to disclose any paid partnerships, which will improve transparency and help audiences make informed decisions about the products they choose to buy.
2. Better quality content: The guidelines will likely encourage influencers to create better quality content that is not misleading and offers value to their audience.
3. Enhanced credibility: By complying with the guidelines, influencers can build greater credibility and trust with their audience and brands.
4. Decreased fraudulent practices: The guidelines may help to reduce fraudulent practices, such as buying fake followers and engagement, as influencers who do so would be in violation of the guidelines.
5. More accountability: The guidelines make influencers accountable for their actions and content, which will likely deter unethical practices and ensure responsible behavior.

The new guidelines, adds Mukesh Vij, are a positive step towards regulating influencer marketing in India and promoting responsible and ethical practices among influencers.

The recent endorsement guidelines released by the government so far have had a positive impact on the influencer marketing field in India and will continue, says Rubeena Singh. In the long run, she adds, the rules, which include a prohibition on making misleading endorsements, may cause concern and confusion among brands and influencers initially. She, however, is certain that in the long-run, as the industry matures, it will foster building trust and benefit all stakeholders – consumers, creators, and brands, she .

According to Ayushi Arora Gulyani, these guidelines for influencers in India will have a significant impact on the influencer marketing field. “The guidelines require influencers to disclose any material connections with brands, clearly identify their sponsored posts, and not make any false or misleading claims about products or services. This will bring more transparency and accountability to the influencer marketing industry, benefiting both consumers and brands.”

The Department of Consumer Affairs issued guidelines to regulate misleading promotional content made by influencers in order to curb the circulation of any misinformation, says Pranav Agarwal. According to him, it has been observed that content labeled as a paid promotion or #ad does not perform as well as an authentic review performs. Furthermore, the fee for such a violation is the same across all influencer categories (macro, micro, and nano), which may deter aspiring nano-influencers.

Affiliate marketing

Will authenticity boost affiliate marketing through influencers?

Authenticity is a key factor that can boost affiliate marketing through influencers, says Ayushi Arora Gulyani. “If influencers have a genuine connection and trust with their audience, their recommendations for products or services can be more effective in driving sales. However, it is important for influencers to disclose their affiliate partnerships and be transparent with their audience,” she adds.

Mukesh Vij agrees that authenticity is a critical factor in boosting affiliate marketing through influencers. Authenticity refers to the degree to which an influencer's content is perceived as genuine, honest, and trustworthy by their audience.

According to him, some reasons why authenticity can boost affiliate marketing through influencers:

1. Builds trust: Authenticity is key to building trust between the influencer and their audience. When an influencer's content is perceived as genuine and honest, their followers are more likely to trust their recommendations and make a purchase based on their referral.
2. Increases engagement: Authentic content tends to be more engaging and relatable to the audience.
3. Enhances reputation: Authenticity helps to build an influencer's reputation as a trusted source of information, which can lead to increased brand loyalty and repeat purchases.
4. Improves conversions: When an influencer's content is authentic and genuine, it can lead to a higher conversion rate for affiliate marketing. This is because their audience is more likely to trust their recommendations and make a purchase based on their referral.

Overall, Vij adds, authenticity is a critical factor in boosting affiliate marketing through influencers. By partnering with authentic influencers, brands can build trust with their audience, increase engagement, enhance their reputation, and ultimately drive more conversions through affiliate marketing.

Rubeena Singh points out that authenticity plays a significant role in affiliate marketing through influencers. “By being open and honest about the products they are promoting, influencers can gain the trust of their followers and better promote the products they are affiliated with. This can lead to better conversions, higher ROI, and overall success with affiliate marketing.”

Pranav Agarwal feels that influencer marketing and affiliate marketing were previously thought to be completely separate entities, but they are in fact interrelated. Influencers' authenticity and transparency are valued by audiences. With increased authenticity, audiences are more likely to trust and purchase the products, he adds. 

According to him, brands are recognising the value influencers can bring to their brand. “Influencers being relatable share a review answering questions their audience relates to, often giving demonstrations, and adding Calls To Actions when talking about a brand. They guide and help their community through the whole consumer process, they do all of this in an authentic, organic way. Brands are now seeking more long-term partnerships with influencers and favouring performance-based deals; this is where influencer marketing overlaps social commerce.” he adds.

Vinay Pillai, Head of Clout and Head of Strategy, Pocket Aces, states that at present affiliate marketing is non-transparent. According to him, creators are just trusting brands to provide the sales and revenue numbers basis which they get the revenue share. “They don’t have any standardized tracking tools or dashboard to track the sales which can improve transparency between the brand and the creator, motivating more creators to pick affiliate marketing as a way to monetize. This will also give creators an understanding of how much they are able to contribute to the brand numbers,” he adds. 

The role of micro-influencers

In an influencer marketing campaign, micro-influencers play a crucial role.

Micro-influencers are the future of influencer marketing for brands, states Pranav Agarwal. “They have a tight-knit community and a better understanding of their audience, allowing brands to connect on a more local and regional level. Followers in these communities have cult-like loyalty and really listen to what influencers recommend, resulting in a positive ROI. This increases brand trustworthiness and gives them the opportunity to become the brand's face. As a result, micro-influencers are already an important part of marketing campaigns.”

According to Vinay Pillai, in the marketing and sales funnel (AIDA), there is awareness, consideration, and then intent to buy the product. “The mega influencers help drive awareness about product launch/ its new features or benefits. The target audience of the brand who actually consider buying the product is primarily driven by the mid-size creator where they talk in detail about the brand, its product features and uses in a daily life scenario. This is followed by the micro influencers, who people trust at a local level, and have a more focused TG. It’s their recommendations about specific products/brands that can actually drive the intent.  Therefore, micro-influencers can be crucial to any brand that wants value for money with its marketing efforts,” Vinay Pillai adds. 

“Once brands pick the right creator with good engagement, they’ll be able to reach out to varied target audiences through different categories of micro-influencers. With this they can test what TG of the audience is visiting their website and actually purchasing the product. Secondly, micro-influencers can be a great way for brands to try influencer marketing by engaging in barter deals, to see what the ROI they are getting in terms of impressions and sales post the campaigns. Micro-influencers can even be willing to create content directly for the brand as an asset for their page,” says Pillai. 

Micro-influencers are increasingly becoming a crucial component in influencer marketing campaigns, says Ayushi Arora Gulyani. “They have a smaller but more engaged audience, and are more cost-effective than macro or celebrity influencers. They also have a more niche focus, making it easier for brands to target specific audiences and achieve higher engagement rates.” 

Micro-influencers are an integral part of any influencer marketing campaign, maintains Rubeena Singh. According to her, they have the potential to create significant reach and engagement for brands and often have a much more genuine audience than macro-influencers. “They are often seen as more reliable and trustworthy than prominent influencers because they can provide more personal and genuine content. As a result, they have the potential to create more authentic relationships with their followers and even convert followers into customers for brands.”