Influencers likely to take a pie from State governments’ traditional media budget

As state governments in India increasingly rely on the popularity of influencers, a key question arises: Will these state governments reduce their spending on traditional media platforms in favor of targeting younger audiences on digital platforms like Meta and Google? Experts believe that the state governments will reduce its Print budget and allocate it to influencer marketing.

Recently, the Karnataka state government introduced the Karnataka Digital Advertising Guidelines-2024, which allows digital media entities, including social media influencers, to receive government advertisements. Similarly, the Uttar Pradesh Government announced the Social Media Policy 2024, enabling social media influencers to earn up to Rs 8 lakh per month by promoting state government schemes.

Experts believe that the funds allocated to these schemes and policies will impact the state governments' spending on traditional media. Anup Sharma, a PR & Strategic Communications Consultant, stated, "Various reports and trends show that Generation Z and millennials are gravitating towards social, user-generated video content because it's free, convenient, and they can endlessly scroll through content that is algorithmically targeted to their interests."

Sharma further noted, "This highlights the effectiveness of social media algorithms and the influence of content creators and influencers. Like businesses, the government has also recognized this trend and is increasingly using social media to engage with citizens, share information, and deliver services more quickly and effectively."

Elaborating further, Sharma added, "This will lead to a shift in advertising budgets, with content creators and influencers taking a significant share from print media, such as newspapers and magazines. TV will continue to hold a larger share due to higher rates, followed closely by print and social media. While the budget allocation may be small now, it wouldn't be surprising to see advertising on content creator- and influencer-led social media platforms increasing at a faster rate than on other platforms."

The Union government spent Rs 967.46 crore through the Central Bureau of Communication on awareness/publicity campaigns about Indian government schemes and programs through print media from 2019-20 to 2023-24 (as of 12.12.2023). TV still receives 60 percent of the budget, followed by print and outdoor media.

Shudeep Majumdar, Co-founder and CEO of Zefmo, commented, "Regarding the potential decrease in spending on traditional media due to state governments investing in influencers, it's plausible to anticipate some shift in budget allocation. As digital platforms increasingly become the primary source of information and entertainment for a large segment of the population, especially among younger demographics, governments are recognizing the value of leveraging these channels for broader reach and engagement."

Majumdar also mentioned, "The impact on traditional media sectors like print and television will likely vary. Television may experience a lesser impact compared to print, given that it still captures a significant share of advertising spend and audience engagement, especially in contexts like live sports, local news, and entertainment. Print media, however, might face greater challenges as it has been on a declining trend with respect to advertising revenue and circulation, exacerbated by the digital shift."

Discussing the paradigm shift, Majumdar said, "From an agency perspective, the increasing government investment in the influencer marketing sector opens up a myriad of new opportunities while also introducing challenges and potential shifts in both operational and ethical paradigms that influencers and their partners must navigate."

Speaking about the impact of these policies on the influencer ecosystem in the country, Rohit Agarwal, Founder and Director of Alpha Zegus, stated, "While the opportunity offered by state governments is very lucrative, influencers will have to navigate the social dilemma of balancing content freedom with monetary gain. They will also need to consider that if they are asked to endorse a particular political party, they will need to align their morals and beliefs with that party."

According to Google's transparency report for the period between October 3 and November 1, total spending on political advertising amounted to Rs 69,15,500. The Bharatiya Janata Party (BJP) led the chart with an expenditure of Rs 33,60,000. Other notable contributors included the Directorate of Public Relations, Madhya Pradesh at Rs 5,04,000; the Department of Information and Public Relations (DIPR) at Rs 2,30,000; Indian Pac Consulting Private Limited at Rs 2,19,000; and the Indian National Congress at Rs 1,39,000.

According to Meta’s ad library report, the BJP and its known affiliates spent Rs 2.5 crore on political ads in Maharashtra, a figure higher than in Uttar Pradesh.