On the one hand, regulators are pushing for transparency and ethical standards for influencers, even cracking down on them for alleged tax evasion, while on the other central ministers are holding meetings with them to amplify government messaging. Is the reach of influencer marketing too good to resist? Between influencers’ power and regulatory scrutiny, marketing experts suggest that striking the right balance is the only way to save the day for both parties.
“Governments and businesses are increasingly collaborating with influencers to promote government schemes, initiatives and products. This is because influencers have a large and engaged audience that is receptive to their messages. However, their reach and influence must be regulated to ensure transparency and ethical practices,” says Ramya Ramachandran, founder and CEO of influencer marketing agency Whoppl.
Digital marketing expert Ambika Sharma, founder and MD at Pulp Strategy, says the government is also doing what exactly any other brand trying to reach out to a younger audience is doing at the moment.
“Influencers have been gaining more attention in recent years as a key player in marketing strategies. Many companies have shifted their marketing dollars towards influencer marketing due to the success and reach that influencers have with their followers,” she said.
Talking of volume and reach, as per a recent Redseer report, 3.5-4 million influencers have emerged in the influencer marketing ecosystem, making them the centrepiece of digital advertising as generated content is generating twice the engagement of professionally generated content. Out of the 780 million internet users, 118 million watch influencer ads and try out products and services. The return on investment from influencer marketing makes it attractive to brands of all sizes, and it is expected to grow to $ 2.8- 3.5 billion by 2028, Redseer predicts.
Naturally, it is too tempting to pass up for anyone with an agenda to convey a message. Even the government. Just this week the Union Minister of Commerce and Industry Piyush Goyal engaged with 50 influential digital content creators, primarily popular YouTube channels, to foster better consumer awareness across key sectors.
The same week, the Income Tax Department issued notices to 15 influencers across lifestyle, fashion and entertainment categories, demanding details of their income sources and the reasons behind their failure to pay appropriate taxes on their earnings.
Financial influencer Pranjal Kamra says politicians and governments have begun to realise the power of the massive reach that influencers have. However, his advice is to stay cautious. Keep a distance, even.
“I think influencers would be wary of getting too cosy with the government for fear of being labelled and causing divisions in their viewership,” he said.
While influencers are torn between the opportunity to gain legitimacy by partnering with the government and taking a political stance, marketing and growth experts want to focus on regulations.
Kunal Kothari, founder and chief growth officer at growth and tech platform Mobavenue Media, says while the influencer’s ability to reach and engage audiences is unmatched, making them valuable allies for commercial brands and government entities, it doesn’t negate the need for regulation.
“Transparency and ethical practices are paramount in any form of communication, especially one that significantly impacts public opinion. Regulations are necessary to ensure that influencers’ content is truthful, fair and doesn’t mislead their audience. It’s more of how we can responsibly harness this power. Collaboration between influencers, regulators and governments can lead to a scenario where influencers continue to have their wide-reaching impact within a framework that promotes honesty, transparency and the public good,” he said.