“Social media is here. It’s not going away; not a fad. Be where your customers are: in social media”
– Lori Ruff
The number of people using social media have grown at an exponential rate over the last decade. They already account for 57% of the global population, and this number will likely continue to rise.
At a fundamental level, influencer marketing is a sort of social media marketing that relies on endorsements and product mentions from influencers. Influencer marketing works because consumers want to hear from people they idolise and respect, and their recommendations act as a sort of social proof to your brand’s potential customers.
Influencer marketing is a combination of traditional and innovative marketing techniques. It incorporates the concept of celebrity endorsement into a modern content-driven marketing campaign. Influencer marketing, however, is not limited to celebrities. Instead, it is centred on influencers, many of whom would never consider themselves famous in an offline setting.
In recent news, the government has mandated social media influencers to pay 10% TDS on the free goods they receive in PR packages. Influencers’ earnings are taxed under the category of “Profits and Gains from Business and Profession.” The profits of individual influencers are taxed at the prevailing slab rates. Influencers earning more than Rs.1 crore in gross total revenue will have their books audited. The limit has been raised to Rs. 10 crores if not more than 5% of all payments and 5% of all revenues in that financial year are made in cash. Payments to influencers may be subject to tax deducted at source (TDS) under the Income Tax Act. The nature of the service supplied or the type of transaction conducted will determine the TDS rate. (Source: The Economic Times)
YouTubers, influencers, and bloggers’ services are classed as Online Information and Database Access or Retrieval Services (OIDAR) under the Goods and Services Tax (GST) law. To put it another way, these are services that make use of information technology to distribute data via the internet or an electronic network. Influencers must register under the GST law if their annual revenue exceeds Rs.20 lakh, and Rs.10 lakh if they are headquartered in a special category state. Services performed by GST-registered social media influencers and bloggers are subject to an 18% GST levy.
“True influence is about leveraging authenticity.”
The first social media platform to use influencer marketing was PayPerPost in 2006, and there has been a significant transformation since then. However, Instagram was not ready to enter the social media sphere until 2010. When influencers first emerged, they were mostly bloggers who shared personal experiences and marketed goods they used daily. However, influencer marketing has expanded so much since then. It is being used on almost every social media platform these days. You can even witness B2B influencer marketing on LinkedIn. If you are dealing with B2B clients, then LinkedIn is the ideal platform for you.
Influencer marketing is becoming more commonplace, just like any other business approach or tactic. Influencer representation firms and agencies created to assist brands in finding the ideal influencers for their strategy are both available today. On average, brands generate an equivalent earned media value of $18 per $1 spent. As business surrounding influencer marketing continues to grow, the marketing itself will also keep expanding.
Promoting an online store is one of the most common and obvious ways that e-Commerce brands can use influencer marketing. It’s convenient for influencers to include a link to your online store while they are discussing or endorsing your brand and items.
Another great benefit of influencer marketing is having user-generated content (UGC) that you can share. People usually place greater faith in other people than they do in brands.
Every brand needs more customer reviews on its website, but often customers forget to return and give their feedback or share their experiences. When you collaborate with an influencer, you can record their endorsement and their narrative.
Offering a discount when partnering with an influencer is such a great way to increase your sales and ROI on the campaign. Furthermore, having a discount code specifically for that influencer will allow you to track their conversions.
Working with micro-influencers is undoubtedly the way to go. Working with someone with a limited audience is okay as long as their engagement rate is high. They can take advantage of the relationships they’ve established with their little audience to persuade them to find out more or make a purchase.
There’s been a shift in the trends of influencer marketing ever since it started. From the rise of podcasts to the appearance of audio-only applications like Clubhouse. There’s no certainty in this industry, however, one thing is for sure it will continue to evolve.
Now, what’s your take on this? Is influencer marketing a boon or a bane? Share your valuable thoughts with us.