Indian D2C Brands Increasing Investment in Creators Amid Rising Costs
Direct-to-consumer (D2C) brands in India are notably amplifying their investment in creator-driven marketing strategies.
However, an increasing portion of these expenditures is directly tied to measurable outcomes, including sales performance and customer acquisition, as influencer fees escalate and brands demand greater accountability for their return on investment.
At Miraggio, an accessories brand, approximately 25% of its marketing budget now channels funds towards creators.
In contrast, Escape Plan, a travel and luggage company, allocates about 10-15% for similar initiatives. Sagar Pushp, the Co-founder and CEO of ClanConnect, identified that influencers typically constitute 40-50% of the digital marketing strategies for numerous online-centric D2C brands.
While these statistics reflect varied contexts—Miraggio and Escape Plan are discussing their overall marketing budgets, and ClanConnect is concentrating on digital spending—they collectively signify a substantial shift occurring within D2C marketing.
The focus for creator budgets is evolving from merely generating awareness to enhancing product discovery, crafting compelling content, and driving conversions.
Mohit Jain, Founder and CEO of Miraggio, noted that the brand has significantly escalated its investment in creators over the past 12-18 months, attributing this to the pivotal role creators play in fashion discovery. Furthermore, Miraggio is transitioning from sporadic posts to cultivating long-term partnerships with creators.
“Fashion ultimately hinges on understanding how an item complements one’s lifestyle,” Jain stated. He emphasized that a handbag, for instance, may have varied appeal when showcased by a creator in contexts such as work, travel, or an evening affair, as opposed to being viewed solely in a promotional image.
Miraggio employs a diverse creator mix, prioritizing aesthetic quality, audience engagement, and the creator’s narrative ability, rather than focusing solely on follower counts. Jain expressed that significant value is derived from micro and mid-tier creators, where audience connections tend to be more intimate.
This evolving strategy is also evident in the brand’s approach to measuring outcomes. Currently, around 30% of Miraggio’s creator activities are evaluated based on metrics such as sales, return on ad spend (ROAS), and customer acquisition costs (CAC), a marked increase from the previous 15%.
Jain revealed that their performance-oriented creator campaigns yield an average customer acquisition cost of ₹900 and an ROAS of 3.5.
Simultaneously, the company does not view creators as mere substitutes for performance-driven advertising.
Jain asserted that while Miraggio’s performance marketing remains heavily reliant on Meta, creator collaborations play a distinct and vital role in fostering desire and facilitating discovery.
“Google captures intent. Creators ignite desire initially,” he remarked, adding that the brand refrains from significant marketplace advertising.
Escape Plan shares a parallel strategy, albeit with a smaller percentage of its marketing budget devoted to creators.
Abhinav Pathak, the brand’s Co-founder and CEO, indicated that approximately 10-15% of their marketing resources are currently allocated to creator and influencer engagements, a figure that has steadily increased over the past year.
For Escape Plan, creators serve primarily as a demonstration tool rather than a volume-generating resource.
Pathak noted that luggage purchases are significant decisions for consumers, who seek to understand how products function—how they open, pack, roll, and perform during actual travel—information that static advertisements often fail to convey effectively.
The brand’s creator mix skews heavily towards smaller influencers. For every ten units of creator expenditure, roughly one is earmarked for celebrities, and two to three for macro creators, with the majority allocated to micro and nano creators.
Notably, user-generated content (UGC) comprises the largest and most rapidly expanding segment within this category.
“We prefer collaborating with fifteen creators who genuinely travel rather than relying on a single, large-scale influencer,” said Pathak.
He elaborated that the focus is shifting from reach to relevance, particularly among travel and design audiences who are already evaluating options.
However, the phenomenon of “creator inflation” is beginning to alter the economic landscape. Pathak observed that average creator fees have surged by over 30-40% in the past two years, with some cohorts experiencing even swifter increases than the returns generated.
The challenge lies in the fact that it is not solely the fee that has escalated; the cost of individual posts has surged amidst increasingly crowded feeds, resulting in diminished content lifespan.
Consequently, brands are shifting away from fleeting transactional posts towards cultivating enduring relationships, affiliate models, and performance-linked initiatives.
Pathak characterized this evolution as a departure from “renting attention for a single post” towards forging ongoing partnerships with creators who comprehend the product intimately.
Pushp from ClanConnect pointed out that this budget allocation is even more pronounced for online-centric enterprises, where a substantial portion of marketing spending is inherently digital.
He reported that influencers now comprise at least 40-50% of the digital marketing mix, a significant uptick from the previous year.
He highlighted one eyewear brand collaborating with ClanConnect that typically invests around ₹10 lakh monthly on influencer initiatives, with substantial ramp-ups during major campaigns. Meanwhile, another beauty and skincare brand allocates approximately ₹6.8 lakh monthly.
This expansive reallocation is also mirrored within agencies. Ajay Kulkarni, Business Head at Barcode Entertainment, noted that the significant narrative is not merely about brands increasing their overall marketing budgets but reallocating existing resources amidst global economic challenges.
“We’re witnessing a migration of funds from traditional performance and celebrity budgets into creator-driven ecosystems,” Kulkarni noted.
He posited that creators can increasingly fulfill multiple roles concurrently, encompassing trust, audience connection, storytelling, and conversion.
Consequently, brands are transitioning from merely purchasing an influencer’s reach to leveraging creators throughout various stages of the marketing funnel.
Kulkarni refrained from applying a uniform inflation figure across creator tiers, stating that rates fluctuate significantly based on category, engagement, content quality, and usage rights.
The steepest pricing pressures are observed at the macro and celebrity levels, where demand is concentrated, while micro-creator costs remain relatively competitive due to a denser supply.
Moreover, he pointed out that creator fees are no longer the sole major expense, as costs associated with usage rights, whitelisting, and paid amplification can substantially augment overall expenditures on creator-centric advertising.
The next phase of growth is anticipated to surface during the festive season. Kulkarni projected that spending in the creator economy during this period will approximate ₹700 crore, with expectations for a year-on-year increase of 10-20%.
At the brand level, he forecasts that creator budgets will be 20-30% higher during the festive season compared to regular months.
More critically, brands are initiating festive campaigns earlier and employing creators across various stages of the consumer journey—discovery, consideration, and conversion—rather than relegating influencer marketing to a mere awareness tool for the festivities.
For D2C brands, the landscape of the creator economy is evolving towards a model that emphasizes not merely purchasing reach but strategically allocating capital across brand-building, content creation, and quantifiable acquisition.
As the allocations increase, so too does the imperative for creators to substantiate that their influence can effectively traverse deeper into the marketing funnel.
Source link: Storyboard18.com.
