Influencers fret impact on brand deals as SEBI calls to bar celebrity endorsement of cryptos

"This ambiguity might create some indecision and confusion which might lead to drop in brand deals (for influencers)," Rohit said.

Rohit is already seeing a drop in the number of brand associations this year from 2021 because of guidelines introduced in February by the Advertising Standards Council of India (ASCI). A bearish crypto market didn’t help.

ASCI has said that advertisements plugging virtual digital asset (VDA) products and services should carry the disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.”

Rasleen Grover, a micro-influencer creating content on finance and careers on Instagram, said prohibiting public figures from endorsing cryptos will affect influencers and their brand deals.

Another influencer that creates content on cryptos, Paritosh Anand said that there will be a significant drop in the brand deals due to the recent changes in protocols. "However, if the brands continue to spread awareness towards crypto as an entity, and not just their brands as a product, there won’t be any hindrance whatsoever. I personally have been very active and loud about my involvement in spreading awareness about cryptocurrency as a discoverable entity, and I’ll continue to do so," he added.

Agencies representing influencers are also wary of SEBI's proposal. They are worried that crypto advertisers may step back from brand associations with content creators.

"Multiple celebrities and creators have been actively engaged in promoting crypto products and these are strong income sources for digital creators,” said Aayushman Sinha, founder and head of Represent, a talent management firm.

The influencer math 

“Cryptocurrency is a top category investing in talent from Salman Khan to a new-age creator --all have been part of the marketing mix,” he added. “The spends are high and regular and help creators add to their revenue pie. But the platforms will not engage public figures till the matter has some clarity.”

Neel Gogia, co-founder of marketing agency IPLIX Media, said cryptocurrency brands discontinuing deals will have a significant impact on the influencer marketing industry and its stakeholders.

"There has been a significant uptick in influencer marketing spending of crypto brands this year," Gogia said.

Gogia reckoned that on average, a creator of financial content makes 10-12 videos on one brand every year.

"So, if these deals are retracted, some 1,500-2,000 videos will be dropped annually," he said.

Pranav Panpalia, founder of influencer marketing agency OpraahFx, said the spending capacity of crypto brands had increased by about 15-25 percent in 2022.

"Generally, for mega campaigns, a crypto start-up spends about Rs 50 lakh to 1 crore," he said.

In 2021, the crypto category had a 10-15 percent share in the overall influencer marketing space.

Reaching the millennials 

"Crypto has been one of the key sectors that have aggressively used influencer marketing tools to reach the millennial group. Influencer marketing was the first tool that many crypto startups used during their launch. It is very recently that they started spending on other mediums," said Shivam Agarwal, founder of Deckster.Live.
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CoinDCX, CoinSwitch Kuber, and WazirX are some of the leading crypto start-ups that have been using marketing platforms to reach their target groups and influencers are a core part of their marketing mix, said Panpalia.

He added that while celebrities have been the preferred choice of many crypto startups for their campaigns, with time, they focused more on mega- and micro-influencers.

Agarwal said that for micro-influencers, the value of a crypto brand  deal varied from Rs 1 lakh-3 lakh , for macro-influencers about Rs 5 lakh-8 lakh and for mega-influencers from  Rs 10 lakh-15 lakh.

According to Amev Burman, founder of Adfluence Hub, the SEBI move will hit influencers in the fintech category.

"Since, there has been a significant increase in the number of crypto players, the fintech influencers had increased their prices,” Burman said. “Additionally, a lot of smaller creators were inspired to start their journey in the crypto space. A majority of the crypto brands were looking at long-term associations with fintech creators. Such a ban will affect not only one deal but also long-term contracts."

Ishan Jindal, founder & CEO of influencer marketing automation platform Wobb, said SEBI's move could dent investment in the crypto industry because of the sway influencers have over investors in the space.