Representative image (iStock)

By Kedarswamy Ravangave

In the fast-paced world of marketing, influencer marketing has long positioned itself as a powerful tool for building brand awareness and consideration. But the future demands more. The lines between top-of-funnel marketing (which builds brands) and bottom-of-funnel marketing (which drives sales) are increasingly blurred. Influencer marketing, when linked to affiliate marketing models, could be the game changer we’ve been waiting for: a bridge that can bring these two crucial aspects together. I think it’s time to challenge the way we think about influencers and ROI, especially in industries like banking and financial services, where we’ve traditionally been slow to adapt.

The Current State of Influencer Marketing

Influencer marketing, in its current form, focuses largely on vanity metrics: likes, shares, and impressions that have long been used to justify awareness campaigns. While these metrics do help drive brand consideration, the reality is harsh: in an era of increased accountability, brands must justify every dollar spent. The need for metrics tied to real ROI isn’t just a want, it’s a necessity.

Recent research shows that global influencer marketing is expected to reach $21.1 billion by 2025, with micro and macro influencers both gaining significant popularity. Yet despite this impressive growth, a 2023 study by Influencer Marketing Hub found that 67% of brands still struggle to measure the true ROI of their influencer campaigns. Awareness alone can no longer constitute the purpose of the game.

Affiliate Marketing: The New Frontier

Here’s where we think the solution lies: mixing influencer marketing with affiliate models. Affiliate marketing has long been proven to be a direct driver of sales, built on performance-based payments. Bringing influencers into this fold, tying their success to measurable results like lead generation or actual sales, would revolutionize not only influencer marketing, but also the way brands think about funnel strategies.

This shift would require brands to create new payment models that go beyond awareness and focus on bottom-line impact. Influencers, whether micro, macro, or somewhere in between, would be rewarded for achieving significant results. And with the rise of technology solutions like UTM tracking, personalized discount codes, and deep analytics, the infrastructure is already in place to allow brands to measure the real value generated.

Why BFSI needs this change more than ever

While sectors like retail and e-commerce are already leveraging these models, BFSI (banking, financial services and insurance) remains lagging behind. This is surprising, given the increasingly competitive nature of our industry. With a changing and increasingly digital-focused consumer base, traditional forms of marketing are no longer enough. Influencer marketing is ripe for disruption in the BFSI.

Take, for example, credit cards or home loans, two high-involvement products where trust plays a vital role. If we can equip influencers with affiliate models to increase not only awareness, but actual product adoption, we will see a step change in both reach and results. Why shouldn’t a micro-influencer who has a strong following among young professionals be rewarded based on the number of credit card applications completed by their audience? Why shouldn’t an influencer specializing in financial literacy generate real leads to our home loan products?

Data-driven and ROI-driven: the new mental model

The shift to ROI-based influencer marketing cannot be overstated. With brands spending over $5 billion on influencers globally, it is unacceptable that nearly 70% of campaigns are not up to true ROI standards. Instead, we need to be bold enough to move away from vanity metrics and redefine success in terms of real revenue and customer acquisition.

To put this into perspective, brands that have taken an affiliate-first approach have seen conversion rates of up to 15% on influencer-driven traffic. This stands in stark contrast to the often nebulous impact of traditional influencer campaigns. Additionally, research shows that affiliate marketing offers an average ROI of 12:1: meaning that for every dollar spent, brands earn $12 in return. Imagine pairing this with the reach and engagement of influencer marketing in an industry like BFSI, where the customer lifetime value is significantly higher.

The way forward: creating new payment models

For this revolution to happen, we need new compensation models that reward influencers for real business results. These models must be flexible, scalable and transparent. This is what the future will look like:

1. Performance-based payments: Instead of flat fees for a single post or campaign, influencers should be rewarded based on the activity they generate. Whether it’s product purchases, lead generation, or even engagement leading to app installs, payment should be tied to measurable results.
2. Long-term partnerships: Instead of one-off collaborations, brands should consider building long-term partnerships with influencers who align with their values. This will not only build brand loyalty but also allow influencers to achieve consistent results over time.
3. Micro-influencers for micro-conversions: Micro-influencers, with their niche and highly engaged audiences, are ideal candidates for carrying out specific and targeted actions. These influencers should be given specific, measurable goals, whether it’s product signups, app downloads, or even arranging financial consultations.

Conclusion: it is time for a paradigm shift

Influencer marketing is at a crossroads. The current approach of using influencers simply for awareness and consideration is outdated and unsustainable. As we move toward a future where responsibility is paramount, we must think bigger and bolder. Affiliate marketing is the ideal model to connect influencers with real business results, creating a win-win situation for brands and influencers.

At BFSI, the time has come for this transformation. As we seek to build trust, drive adoption, and engage a new generation of emboldened customers, influencer affiliate marketing gives us the tools to do so in a data-driven, measurable way and deeply impactful. The only question that remains is: are we bold enough to embrace this future?

As marketers, we have to be.

(The author is the head of marketing at consumer and commercial bank Kotak Mahindra Bank.)

Reddit registered a subsidiary in India in August this year and began leveraging influencer Connect to bring users together – it held AMA (ask me anything) sessions with Shark Tank’s Namita Thapar and actors Pankaj Tripathi and Manoj Bajpayee.

Algorithms and accountability – How India regulates its social media influencers. Without a strong regulatory framework to hold influencers accountable for their claims on social media, advertisers face an uneven playing field compared to traditional media like television or print. This could lead to uninformed consumer decision-making, as influencers may not feel obligated to conduct due diligence regarding the products or services they are promoting.

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