The curse of one-million followers: Why finfluencers want to stay small

Besides the regulatory move, brands are moving away from Cat-A finfluencers also because of the poor return-on-investment they are

Once upon a time, having a million followers was a badge of pride for a finfluencer. Now it is a burden. Why? Brands do not want to collaborate with them any more following a major regulatory change and because cheaper alternatives are available in plenty.

“Finfluencers who used to have 20 brand collaborations now have two. There was a person who seemed to be getting a new brand collaboration a day, now it has come down to one or two new ones in a month,” said a finfluencer, who did not want to be named.

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The regulatory change came through a circular “Revised Code of Advertisement for Stock Brokers”, which was issued by the exchanges on February 2, 2023. In it, regulation 5 detailed what their advertisements should not contain and that included celebrities. Included in the list of celebrities was any influencer with more than 10 lakh (1 million) followers.

“Stock brokers are not allowed to collaborate with any influencer with more than a one-million followers, and brokers are the only ones who can really afford to collaborate with them,” said Krisneil Peres, co-founder of Fame Keeda Networks, which is a digital marketing agency that works extensively with the finfluencer community.

In the marketing world, influencers with over a million followers are called Cat-A influencers. While their charges per video vary, anyone with a 5-10 lakh following could charge even up to Rs 10 lakh per five-minute video.

“The other advertisers (like credit apps) are just starting up and they look to sign on 15 Cat-B influencers or 50 nanoinfluencers with the same price (they would be paying one Cat-A influencer),” said Peres.

Workaround

Cat-B finfluencers are those with 3,00,000 to 800,000 followers; Cat-C are those with 50,000 to 1,00,000 followers; and nanoinfluencers have below 50,000 followers. If regulated entities are doing any paid collaborations with any of these smaller influencers, they have to get them cleared by the exchanges before publishing them.

Finfluencers who have more than 10 lakh following are now planning to build new channels so that they can do brand collaborations.

One finfluencer said that when his subscriber base comes close to 9 lakh, he will start posting in his English channel, and post less on the regional-language channel to keep the viewership down.

Finfluencers have an audience for very specific content. For example, some are followed for their financial explainers while others are followed for personal-finance advice. To decelerate the growth of their subscriber base, some influencers are posting content they know that their target audience won’t appreciate much.

Many of the bigger finfluencers are already looking at alternative income streams, said an insider. They have become more aggressive selling courses and some who had sworn never to start Telegram channels that sell stock tips and calls have launched such channels.

The price point

Besides the regulatory move, brands are moving away from Cat-A finfluencers also because of the poor return-on-investment they are seeing, said an insider.

According to him, there are bots that can be bought to increase viewership and engagement through comments and even downloads.

“Brands are growing wiser to this. So unless, they see that there is genuine engagement, they are not willing to pay anymore, just going by the subscriber or viewership numbers,” he said.

As an example, he said that while a finfluencer with less than a million followers had generated 1,500 conversions (customers buying the product) for a brand with one video, another finfluencer who had 10x the followers could generate 2 lakh downloads but only 14 conversions (customers using the product).

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“The brand realised that the downloads may have been bot-generated,” he said.

Money does not seem to be as free-flowing as it was during the pandemic years, he said. Brands now ask for more for the same price. What used to be the price for one video can now be the price for one video and two insta-reels, and many bigger finfluencers are uncomfortable with this, seeing it as a hit to their ego.

Also, nanoinfluencers, who are largely those in their early twenties, have lowered their charges even further. A finfluencer told Moneycontrol that he himself was considering hiring them to promote his channels, given that they charge only Rs 2,000 per video now.