Influencers on Trial: Separating Fact from Fiction in the Social Media Realm

The past decade has borne witness to an astonishing ascension within the Influencer Industry. Everyday individuals, hailing from diverse backgrounds, have managed to cultivate substantial followings across social media platforms, leveraging these followings for considerable financial gains.

However, a sea change has manifested over the past year, and the industry now confronts a host of formidable challenges. The ongoing tussle between Financial Influencers (Finfluencers) and the Securities and Exchange Board of India (SEBI), along with the demand for verified Profit and Loss statements (PnLs), has exposed the chasm of those influencers who formerly proclaimed expertise in Capital Markets and their stark inability to navigate the treacherous waters of financial markets. Moreover, many finfluencers have faced allegations of proffering guidance in domains where their subject matter expertise is conspicuously lacking, thereby leading to widespread financial losses for unsuspecting individuals who reposed trust in their counsel.

The realm of influencer marketing is further tarnished by a litany of predatory practices, including the purchase of counterfeit engagement and followers, creating a fog of ambiguity around the true extent of their influence. Additional factors such as market oversaturation, waning influence, and shifting consumer sentiments have compounded these challenges, casting a shadow over the industry's future.

In the relentless pursuit of relevance, influencers often resort to extreme measures, fabricating outlandish narratives for social acclaim or latching onto trending topics to stay in the limelight.

So, how can one ascertain the reliability of any given influencer?

Regrettably, there is no facile solution to this predicament. To simplify matters, I have devised a discerning 2x2 framework.

Allow me to elucidate the framework for your understanding:

• Subject Matter Expertise: Evaluating this criterion is no straightforward task. As discerning consumers of content, we must inquire whether the content disseminated by a specific influencer has contributed to the creation of genuine value. Most influencers curate content from diverse sources, presenting it to their audiences. It is imperative to contemplate whether, beyond mere facts, figures, and trivia, these influencers have indeed facilitated a deeper understanding of the subject matter. If their content reflects diligence, research, and critical analysis that were hitherto concealed from you, then they merit placement in the "Established" category. As I’ve said in the past too, don’t fall for the charm of the individual or their existing credentials, look at things from a critical perspective and do as much independent research about the subjects being talked about as possible.?To illustrate this concept, consider the Hindenburg report on Adani. While many finfluencers merely discussed the allegations contained therein, some expounded upon the broader implications of the report, substantiating its claims to the best of their abilities—an exemplar of genuine Subject Matter Expertise.
• Direct or Indirect Monetization: This facet revolves around the influencer's method of capitalising on their audience. Direct Monetization denotes instances where influencers actively promote products or services to their audience, leading to personal financial gains. This may encompass the sale of courses, newsletters, and similar offerings. Indirect Monetization, on the other hand, pertains to influencers who prioritise building their personal brand, consequently enhancing their public relations and influence within their respective industries. The distinction blurs somewhat in the realm of Paid Content/Promotions, which I categorise as Direct Monetization. Many influencers attempt to disguise such content as native, neglecting to clearly mark it as paid promotion or collaboration, thus engendering potentially risky decision-making.To elucidate, consider Ankur Warikoo, who opts for Direct Monetization by marketing courses directly to his audience. Conversely, individuals like Nikhil Kamath or Ashneer Grover exemplify Indirect Monetization. Nikhil Kamath's YouTube podcast enhances both his credibility and that of Zerodha, while Ashneer Grover's social influence has unlocked diverse opportunities, including speaking engagements, podcast invitations, and additional subscribers for CricPe—opportunities that enable him to indirectly monetize his influence.

In essence, influencers can be classified into four broad categories:

1. The Risky Ones: Even when Subject Matter Expertise is ostensibly established, these influencers remain precarious propositions. Individual capabilities to gauge an influencer's expertise vary, introducing an element of subjectivity. Furthermore, these influencers frequently venture beyond their niche to broaden their earnings, exemplified by figures such as Ankur Warikoo, who seems to profess expertise in every conceivable domain.
2. The Ideal Ones: In my reckoning, these influencers embody the ideal archetype. While their intentions may not always be pure, they refrain from profiting at the expense of innocent individuals who are often beguiled by influencers into making substantial investments.
3. The Avoidable Ones: Let's be candid; we've all followed individuals on social media who create frivolous content, yet their allure is undeniably captivating. They may promote social events, concerts, fashion lines, and the like. It is crucial, in these instances, to make judicious decisions.
4. The Indifferent Ones: True to their moniker, I remain indifferent toward these influencers, owing to their judicious approach to audience monetization. As long as they remain faithful to their purpose and refrain from causing harm to their audience, their longevity is assured.

The landscape has transformed dramatically, shifting from celebrities and cricketers as the original influencers in Indian society to the emergence of outsiders who have seized this terrain. If the current trajectory persists, discerning who qualifies as an influencer may become an intricate challenge. Perhaps, in the end, we shall return to celebrities and cricketers for our sources of influence, should the present trends endure.

The magnitude of someone's following or their level of engagement should never serve as the sole gauge of their triumph. This is a valuable lesson, especially for those contemplating a foray into content creation. The journey of content creation can be profoundly draining, encompassing physical, emotional, and financial tolls. If you intend to embark on content creation as a full-time endeavour, meticulous planning is paramount. It entails charting a comprehensive strategy that outlines avenues for monetization, as well as the long-term sustainability and viability of your efforts.

In the realm of the Influencer Industry, not everything that shines is necessarily gold. To conclude on a lighter note, allow me to share my all-time favourite anecdote of an influencer whose influence took an unexpected turn. Click Here