In the world behind the influencers whose videos you and I enjoy watching on our phones every day, a major economic crisis is currently brewing. India’s influencer marketing market is going to touch the figure of Rs 5,000 crore this year. But behind this dazzling progress, months-long delays in payments, transactions without paperwork, and a rush of new agencies opening up have created a dangerous pressure. The situation is such that it is becoming difficult for both small video creators and marketing companies to earn profits and survive.
Lack of trust in a market worth crores
The market is moving very fast, but the way it works is still quite unorganized. Famous food creator Ayush Sapra says that in today’s era it has become impossible to blindly trust brands or agencies. The biggest problem is regarding getting money. Big and established creators are able to work on their own terms, but smaller influencers’ hands are tied. Taking advantage of the huge crowd of creators in the market, agencies put pressure on them to take payment after 30 days or more of the video being published.
Small creators getting trapped in WhatsApp deal
In the digital world, work worth crores is being done merely on the basis of informal conversations. Many times brands want to seal the deal directly over WhatsApp message or phone call without any formal agreement or email. Sapra says that he rejects such offers, but small creators agree out of compulsion. They do not have the option to leave work. In the absence of any kind of written contract, the risk of losing money is highest.
Flood of agencies becomes real problem
The root of this whole problem is not just the intentions, but the basic structure of the market. According to Pranav Panpaliya, co-founder of influencer marketing agency ‘Oprah’, the biggest challenge is working capital (cash capital). Agencies want to pay creators immediately, but clients take a long time to pay.
Meanwhile, the market is flooded with agencies. Neil Gogia, CEO of IPLIX Media, says that there are around 1,500 to 2,000 agencies in the country. However, out of these, only 30-35 big agencies control 75 percent of the Rs 4,000 crore market. More than 1,200 agencies are competing fiercely for the remaining work. It is easy to build a business worth Rs 1-2 crore per month, but the real challenge lies in growing beyond that.
Money coming out after legal notice
Raj Mishra, CEO of Chatterbox, believes that getting into this business has become so easy that anyone can start calling themselves an agency with an Excel sheet of Instagram handles. Due to this, the quality of work is falling and cases of ghosting after getting the work done are increasing. Small agencies put all the pressure on small creators to get money from brands with a delay of 60 to 90 days.
Sapra himself had to struggle for months for his campaign of Rs 30,000. His money could be released only after sending a legal notice and posting a viral video on social media with 10 lakh views. Now, to avoid this exploitation, many creators have started demanding advance payment or prefer to work only with trusted agencies.
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