Gain in influencers’ popularity might hit celebrity endorsements

“I strongly believe that influencer marketing is eliminating celebrity endorsement from a regular and monthly investment standpoint,” said Jatan Bawa, founder of oral care brand Perfora.

The entrepreneur explains that celebrity endorsements are being treated as one-off brand awareness-raising activities due to their high cost and need for precise messaging. In contrast, influencer marketing is more cost-effective, leveraging the influencer’s existing reach and eliminating the need for additional marketing expenditure.

Marketing budgets and ROI

Over the past two years, the brand has spent 1-2% of its annual marketing budget on a couple of celebrity endorsements, while it regularly spends 15% of the same budget on influencers. This comes to ₹20 lakh a month.

“We will continue to press the pedal on influencer marketing because it helps us get more eyeballs from our target audience,” Bawa said.

Marketers are betting on digital celebrities as they see better return on investments. Mathematically, as they come in at lower rates than celebrities, they provide better returns. Moreover, it is easier to track and attribute, and they are known to drive sales better.

“Influencer marketing often delivers a better return on investment due to lower costs, higher engagement, and targeted audiences,” said Ayush Tainwala, CEO of Bagzone Lifestyles Pvt. Ltd, the holding company of handbag brand Lavie. “While celebrity endorsements build mass appeal, influencer marketing provides measurable returns, typically 4-6 times compared to 2-3 times from celebrity endorsements. This makes it a more effective strategy for driving audience relevance and conversions,” he added. 

Malayalam actor Dulquer Salman promoted one of the smartphone brand Iqoo’s latest models Neo9 Pro on Instagram. The same device was also promoted by Malayali influencer Shaz Mohamed who has 1.6 million followers on Instagram.

The executive added that 20-25% of the brand’s marketing budget is dedicated to celebrity endorsements and influencer partnerships combined. Without specifying the percentage, he also told Mint that they have been increasing their influencer investment as they continue to create authentic connections with audiences. He said this investment has yielded tangible results, increased sales, and attracted new customers.

Regional reach, consumer trust

These companies find influencer campaigns to be a targeted medium for their marketing as their content is more relatable and authentic for the audience that consumes them rather than celebrities who are more aspirational.

“Influencers are able to promote brands by making the content more relatable, and reach the target market more effectively with the use of regional influencers to drive hyper local engagement. This is making them a better prospect than celebrity endorsements and thus brands are switching to them,” said Amisha Gulati, president of creative marketing agency Gozoop Creative Digital.

Lavie worked with Ankita Mestry, a Marathi influencer with 160,000 followers on Instagram, in one of its campaigns to draw the attention of a Maharashtrian audience to their products.

The preference for influencers promoting products from the consumer perspective has also been observed. A study by adtech platform Icubesware suggests that about 17% of consumers deem celebrity endorsements not credible, while most place their trust in influencers.

Even traditional retail brands are embracing the new-age endorsers while still holding on to the mass market outreach celebrities.

A spokesperson for Senco Jewellery, a diamond and gold jewellery brand headquartered in Kolkata, said that with the help of regional influencers, besides their brand ambassadors, they were able to raise awareness about their brand in tier two and three cities. Hyper-local influencers were specially important in this push and so Senco sees influencers as an important marketing medium.

Strategies and celebrity influence

“Influencer marketing remains a valuable tool for driving product discovery and trial, especially in the digital-first consumer segments,” said Ravi Saxena, CEO of kitchen appliances brand Wonderchef.

While the executive pointed to overcrowding as an issue in the creator economy and the brands spending more on celebrity endorsements, he said that influencer marketing shows hope. “While we may recalibrate our influencer strategies to focus on quality over quantity, we see it as a continued part of our overall marketing mix, complementing our retail-focused efforts,” he added.

As a result of this shift in the dynamics of marketing, some celebrities are raising their social media game and turning influencers themselves to fit brands’ eligibility criteria and bag more deals.

“Many celebrities and artists are becoming more active on social media to not miss the bus on digital marketing campaigns. This is ranging from them just following the latest trends to get audience’s attention to creating full blown long-form content for mass consumption in the form of vlogs (video blogs) or podcasts. Either way, their increasing social media presence points to them seeking attention from brands for digital campaigns,” said the head of an influencer marketing agency.