The Quiet Reset in the Influencer Economy
The influencer economy is experiencing a subtle but significant shift. Once dominated by high-spending brands partnering with marquee influencers, companies are now reassessing their strategies. A saturated market, evolving algorithms, and high-profile controversies have prompted brands to explore collaborations with smaller content creators for better returns.
A Changing Landscape
Influencer marketing is undergoing a transformation, with brands moving beyond the traditional approach of working with big-name influencers. Instead, companies are prioritizing engagement rates and niche audiences over sheer follower counts.
- According to a Qoruz report, the number of influencers has surged from 962,000 in 2020 to 4.06 million in 2024, marking a staggering 322% growth.
- The shift is driven by an oversaturation of influencers, algorithmic changes favoring smaller creators, and brand concerns over high-profile controversies.
Harshil Karia, founder of Schbang, highlights this shift, explaining that brands now seek diverse collaborations—for example, an auto brand may work with mechanics and workshop specialists, rather than just traditional auto influencers. However, with some creators demanding celebrity-level fees, brands are reconsidering if hiring an actual celebrity might be a more effective investment.
Small Creators, Big Wins
As brands focus on ROI, smaller influencers with high engagement are gaining traction.
- Kunal Sawant from The Goat Agency (GroupM India) notes that macro and micro-influencers often have more loyal and engaged audiences, leading to better conversions.
- Influencer marketing now constitutes 10–12% of digital ad budgets and is expected to grow strategically rather than through excessive spending.
A 2024 EY report emphasizes that while follower count remains relevant, brands are now prioritizing audience engagement and content quality when choosing creators.
Adding to the shift, Instagram’s algorithm update now favors smaller creators, making their content more discoverable and reducing reliance on high-profile influencers. This change has driven brands to reconsider the necessity of large influencers, as they can now achieve results at a lower cost by working with smaller creators.
The Impact of Controversy
Recent controversies have made brands more cautious, particularly in the comedy and podcast space.
- The India’s Got Latent controversy involving Ranveer Allahbadia and Samay Raina has led to brands pulling out of deals over concerns about negative publicity.
- Aman Garg, co-founder of Ebullient Gaming India (EGI), recalls a case where a brand dropped a creator over a four-year-old video, showing the heightened scrutiny in the industry.
Even long-term deals are being canceled or renegotiated, with brands avoiding content that could spark backlash.
- Sumon K Chakrabarti from Buffalo Soldiers notes that comedy creators face the most scrutiny, though established names like Danish Sait and Gaurav Kapoor remain relatively insulated.
- Ayush Guha from Hypp observes a shift toward safer comedy formats, such as middle-class family humor and regional jokes, as brands prefer content with low risk.
A Struggling Creator Economy
For many influencers, the fallout has been financially challenging.
- February was one of the worst months for influencers in terms of brand deals, particularly for comedians and podcasters.
- According to Garg, podcasters who previously had six monthly commitments now see one backing out and others renegotiating contracts.
- Deals that once took 30–45 days to finalize now take up to three months due to increased brand scrutiny.
Some influencers, like Vinamre Kasanaa (Dostcast host), note that brands are now avoiding controversial creators entirely. Meanwhile, others see this shift as a natural financial cycle, with Aryaan Misra of Desi Crime Podcast attributing the slowdown to the financial year-end rather than controversy alone.
Despite these struggles, influencer managers and agencies argue that the impact isn’t uniform. Categories like beauty, gaming, and lifestyle have remained relatively unaffected, showing that the industry is too diverse for a single controversy to disrupt all creators.
The Shift Toward ROI-Driven Marketing
The biggest takeaway from this reset is the renewed emphasis on performance metrics and ROI-driven marketing.
- Brands now prioritize conversions over reach, questioning the actual influence of influencers in driving sales.
- Sensitive topics such as religion, politics, and caste are increasingly avoided, while brands prefer safe categories like finance, wellness, and entertainment.
However, not all creators feel the pinch.
- A Mumbai-based influencer notes that female-focused, “girl-coded” content continues to attract brand deals.
- Many creators now realize the importance of diversified income streams, with Misra stressing that relying solely on brand sponsorships is risky.
“I never over-indexed on sponsorships because they can disappear overnight,” he explains. “Creators should build multiple revenue streams, such as YouTube, Spotify, or launching their own products, to ensure financial stability.”
The Future of the Influencer Economy
The influencer economy isn’t disappearing—it’s simply evolving.
- Big influencers will still have a place, but brands are now smarter with spending, preferring high-engagement creators over follower-heavy personalities.
- Algorithm changes and brand concerns will continue shaping influencer marketing strategies, making content quality and audience loyalty more valuable than ever.
- Influencers who adapt to these shifts by focusing on authenticity, engagement, and diversified revenue will thrive in this new era of digital marketing.
