Humans are pretty petty influential beings. This is a generation that does not know reality without the Internet, for whom the world made up of technology and geographical constraints do not exist; therefore, it is also referred to as “the first generation of true digital natives". Moreover, with the emergence of a generation that follows social media creators over celebrities, the pandemic has led to a rise of an influencer culture in India as well as globally.
We all have come across the term, “Influencer Marketing”. Influencers are internet users with a lot of subscribers across different social networks, who have a remarkable influence on their followers and they also have niche expertise such as beauty, finance, fashion, entertainment, lifestyle, traveling, or food. Correspondingly, influencer marketing has become the fastest-growing trend in terms of communication with customers, and the number of its campaigns and posts has grown exponentially over the past few years.
As per the research of Global WebIndex, 57.6% of the world’s population uses social media. The average daily usage is 2 hours and 27 minutes (October 2021). The Indian influencer marketing industry was estimated to have reached a value of Rs 900 crore in 2021, according to GroupM INCA’s India Influencer Marketing Report. The market is expected to grow at a compound annual growth rate (CAGR) of 25% till 2025 to reach a size of Rs 2,200 crore. One of the major reasons for attraction to this new form of marketing has been the high ROI companies enjoy, earning approximately 5.5x on their marketing expenditure.
Additionally, most of our younger “investors” don’t know a lot about shares, financial markets, or economics. To make up for that, these young investors look around for sources of information. Hence, they keep an eye on social media platforms and the relevant influencers. With more people starting to follow these finance influencers, their reach is increasing, which helps attract even more new followers. In this way, it also helps the younger investors to start with their investments.
Social media significantly influenced finance. Whether or not echo chambers or influencers are fueling changes in financial markets, it seems that social media can affect market activity.
The rise of the influencer culture has several impacts in a business, such as :
- Allows Businesses to Become Omni-Present
- Increases Personalization
- Generates More Loyalty
- Increases Industry Collaboration
- Adds Credibility
- Increases Referrals
- Helps to build a Personal Brand
- Helps to gauge Audience Feedback
At the same time, it is also to be noted that despite the relative freshness of activities in the influencer marketing area, several emerging challenges can be observed, along with threats related to this form of online promotion. Undoubtedly the most important of them is the influencer fraud phenomenon, related to the fact that some of the accounts or profiles following influencers do not belong to real people, but are only false accounts (fake followers), being the result of bots activities. As a result of the occurrence of fraudulent ‘influencers’, a significant part of the funds spent on activities in influencer marketing is wasted.
This burgeoning economy of social media and influencers is continuing to evolve and become increasingly important, worldwide. The right question to ask is when and how they should be integrated into overall marketing plans. Influencers in this online world are an important part of business conversations. Understanding cultural nuances and the social networking matrix of what works and doesn’t work both on- and off-line in different countries is key.
Could it be that the fast-moving landscape of social media influence is shifting from conventional celebrities to every day, passionate, tenacious individuals from around the globe who have made a name for themselves in social media? Only time will tell.
Please feel free to share your perspective towards the discussion or about your favorite financial influencer.