fintech: A new reality sets in for the fin-influencer

Social media influencers who helped fintech and crypto firms shore up downloads and attract users last year are now feeling the heat of the market downturn as funding dries up.

As the global economic scenario resets and startups focus on revenue and costs, the marketing budgets by these companies are getting slashed. As a result, the deal flow and earnings of the finance creators have dropped by 30-40%, according to half a dozen influencer marketing agencies and creators ET spoke to.

A legion of individuals took up content creation full time after the pandemic. Among the new generation of creators, the boom in finance and business creators stood out, as ET reported last year, owing to the funding frenzy in fintech and crypto startups as well as a market bull run that fueled the interest among Gen Z.

During the peak boom in 2021, a finance influencer with over a million followers on Instagram was making Rs 12-18 lakh a month for brand promotions, according to two digital marketing executives.

“There were many fintech startups that were completely online. These brands raised millions or billions of dollars. Then they had to show download numbers, so they approached creators and started paying per view,” said Neha Nagar, a finance creator on Instagram with over a million followers.

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At one point, for 1 million views on a reel, brands paid up to Rs 5 lakh to creators.

Buy-now-pay-later players, expense managers, neo-banking and online brokerage firms, and crypto exchanges have all now cut down on promotional expenses. While online brokerage firm Groww has slowed down on influencer marketing, VC-backed crypto trading platforms CoinDCX and Coinswitch Kuber have either canceled old deals or paused new ones since February, industry insiders said. Almost 10 people have left WazirX’s marketing department, citing a lack of appraisals in the last few months and budget cuts, they said.

There’s added pressure on crypto exchanges after their advertising blitz attracted scrutiny last year from the government and led to the creation of guidelines for cryptocurrency promotion from the Advertising Standards Council of India.

A spokesperson of CoinSwitch said the company had always been frugal. “Companies will reassess budgets and spends, and that is quite apparent now. However, this is the best time to dig in and build,” the spokesperson said.

WazirX, CoinDCX, and Groww did not respond to emails seeking comment until press time Thursday.

“Overall, the markets are down, crypto is down, fintech funding has slowed down. That impact has definitely shifted to us. It’s a very proportional thing,” said Ayush Shukla, founder of Finnet Media which manages about 20-25 financial creators. “A lot of scrutiny has come in. Last year if it took three days to close a deal, now it takes one to three weeks. Things will be especially hard for medium and small creators,” he added.

Along with longer deal closures, brands are squeezing in more deliverables for the same amount, according to digital marketing agencies. For top finance creators who made money through affiliate marketing, earnings have taken a hit. Each time a user clicked on an influencer’s affiliate link and made a trade, influencers got up to 40% of the brokerage charge. Now that has gone down, with last year’s bull run coming to an end.

Changing appetite

Nothing encapsulates the changing tide in the market more than what the viewers are veering towards. While last year’s content focused on how to read a draft red herring prospectus and why investing in crypto is a good option, this year, creators’ are talking about stagflation, why did the market crash, or how to protect your capital.

Influencers who made a niche in crypto are shifting gears amid backlash from users who joined the crypto bandwagon during last year’s bull run. Now their portfolios are down by at least 40-70%.

Besides companies slashing budgets, the fall in stock prices globally — with tech stocks taking a significant beating — has also shifted the need for content that is focused on “hand-holding” investors through the changing scenario.

“Dynamic updates are much more in demand. Can you predict what will happen today? Day-to-day hand-holding is in demand because people are jittery,” said Pranjal Kamra, a finance YouTuber and CEO of Finology, a financial advisory firm. “The fresh investor hasn’t seen the cycle. Half of their capital was in crypto. They are the ones who are taking it specifically difficult for them to handle this, which is why the content is shifting.”

Instagram 'finfluencers' face a new reality_Graphic_ETTECH

Constant experimentation is the name of the game, creators say, with Instagram’s ever-changing algorithm working in favor of newer creators. Content on discounts is also getting more eyeballs, creators said.

Earlier, Instagram finance influencer Ashna Tolkar focused on fundamental and technical content. She is now creating Reels on real-life hacks and also ramping up her presence on YouTube.

“Very technical content does not get as many views, especially from the newer audiences. Earlier I pushed educational content a lot, and since I was an upcoming creator, the Instagram algorithm supported me. Content that has a hook or something where the potential of shareability is higher, is getting more views,” said 20-year-old Tolkar.

The road ahead
In the new reality, creators are exploring multiple options: Instagram creators who joined during the Reel boom are focusing on ramping up their YouTube presence and doubling down on YouTube shorts. Launching paid courses and adding another language to their content arsenal to make up for the reduced earnings, or negotiating longer-term partnerships with brands instead of one-off posts, are also options creators are exploring.

“Now that few deals are coming in and only big established companies are doing ads, and a lot of creators are shifting to paid courses. Also, now only the good and serious ones will remain, the rest will fade out as it’s not economically attractive anymore,” said finance creator Shashank Udupa, who is planning to launch a course on investments in September this year.

Vimal Rathore, founder of Qoohoo which lets creators monetize their communities, said demand for finance creator-led paid courses remained strong. “Covid time made so many young folks interested in stocks and other financial instruments. They are using this downturn to learn deeply by subscribing to various courses, mentorships and sessions,” Rathore said.

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