A few days ago, cricketer Virat Kohli denied reports that he earns around Rs 11.45 crore per Instagram post. “While I am grateful and indebted to all that I’ve received in life, the news that has been making rounds about my social media earnings is not true,” Kohli wrote on Twitter. There have also been reports that Kohli is the highest-earning Indian on Instagram.
The news report on the Instagram earnings of celebrities brings into focus the huge advertising market on social media. Social media advertisement spend in India is expected to cross the $1 billion mark by the end of 2023, projecting an annual growth rate of around 4 per cent. India accounts for one of the world’s largest social media markets, and with the rapid infrastructural advancements, the potential for digital growth in the country is huge.
“Advertising on social media is instrumental in driving brand awareness and boosting customer engagement. This not only fosters stronger and deeper connections with the target audience but also increases traffic to landing pages and websites, compelling users to click on the CTA (call to action) button. Having said that, sponsored posts work wonders when it comes to social media advertising because potential buyers value the authenticity that comes from people sharing real-world experiences instead of plain ads. They augment a wider reach alongside propelling engagement, loyalty and retention. In contrast to traditional ads, sponsored posts have a more organic approach tied to them and are more than just another ad that viewers scroll past. A recent report from IG scheduling tool, Hopper HQ, revealed that Kohli's income per post on the platform is a whopping Rs 11 crore. The list also highlighted the earnings of football icons like Cristiano Ronaldo and Lionel Messi which were around Rs 26 crore and Rs 21 crore respectively. Sponsored content improves brand lift and is non-invasive,” Delphin Varghese, co-founder and chief business officer, AdCounty Media.
Brand experts feel that the way the new age companies advertise and push their products to the market has changed. Influencers play a major role in that, whether it is the "big names" like Virat Kohli, M.S. Dhoni or Deepika Padukone or even the "friendly next-door guys" across different areas like fitness, fashion, healthy habits, or food.
“The companies believe they need eyeballs to tell that they exist and make a mark on the customers. Celebrities believe that they have a short shelf life and make the best use of the limelight they are under. So, when the demand-supply gap continues, the good ones get lapped up and can command crazy rates. Typically, this bleeds the companies, especially the early-stage ones. The best thing to do for these companies would be to offer a couple of percentage points equity which also gets the celebrity "skin in the game" and lessen the cash burden. The other side of this equation is where the customers/prospects know that these are paid endorsements which could prove to be detrimental as well to the organsation. So, it is a tightrope walk the companies need to walk on. Do we ever think celebrities enjoy wearing slip-on footwear, but still companies do it. So it is a touchy topic,” pointed out Sathya Pramod, founder and CEO Kayess Square Consulting Private Limited.
Pramod does not believe there will be a better conversion just because of the celebrity name attached to a product or service. It draws eyeballs towards the product after which the product will have to take over and prove its worth. “When we look at the other part of the equation which is the person next door, endorsing something, it may work better and cheaper. A common man will trust someone like him and would buy something endorsed by him. However, the reach may be limited. This influencer won't have the reach a celebrity has. Only a few people may know him. So in the end, there is no one shoe that fits all. Everyone has to decide what's good for themselves,” added Pramod.
Author Brand Vinci and Branding coach Pavan Padaki pointed out that there are many variables that determine the conversion rates on social media. “It can depend on the nature of the social media platform, the type of industry, the clarity on call-to-action, the type of content in terms of visual appeal, relevance, intrigue value, the quality of engagement, user experience, etc. But the crucial factor is the target audience accuracy which can be defined and selected strategically by the advertiser to bring relevance, reach, and better ROIs to a particular campaign,” said Padaki.
He said the recent reports on how sports and cine celebrities are commanding obnoxious rates per post show how desperate the advertisers are. “In a dynamic medium where there is limited control over the multiple variables, the gamble of understanding and defining a target audience of a particular celebrity is a safe bet for better TAA (Target audience accuracy). The sheer count of followers the celebrity commands along with the advertiser’s clarity on the target audience makes way for a well-calculated ad spends for a celebrity post,” added Padaki.
A few other experts have also observed that the conversion rate of these social media posts depends on multiple factors. “As per our experience, the conversion rates on social media posts are often seen to be about 2.5 per cent. Meanwhile, the spending on social media posts by a celebrity depends on the drawing power of the celebrity, their reach on the social media channels and also their relevance to the brand concerned,” said Neeraj Manchanda, founder and CEO, ZUGE Electric, an EV platform on the MetaVerse.
Business and brand strategy expert Harish Bijoor believes that social media is the ultimate marketplace. “Influencers rule here as they influence both overtly and covertly. In terms of pricing norms, the bigger the eyeballs you reach the bigger you pay. Add to it the aspect of the brand chemistry enjoyed by the star and his, her or their followers. And therefore, influencers and cricketers (in that order) such as Virat Kohli rule,” remarked Bijoor.