30% drop in deals: Why are brands pulling back on influencer spends?

As January winds down, the influencer marketing space has witnessed a noticeable decline in brand deals. Experts estimate a 30% drop in influencer-led campaigns, attributing it to the post-festive season lull following Diwali, Christmas and New Year celebrations.

Additionally, back-to-back concerts have left brands with tighter budgets, leading many to either exhaust their marketing funds or hold onto their remaining resources rather than investing outright on influencer collaborations. They have even jumped back to barter trends, offering concert tickets instead of cash.

Experts note that the number of collaboration deals has dropped, but brands that are still investing in influencer campaigns are sticking to the same price caps, choosing to skip campaigns altogether if they can’t meet these budgets.

Adani Group General Manager of Digital Media, Chandan Sharma, explains this deal drop. “Brands made significant investments during the festive season in high-profile events and concerts, which boosted visibility but also drained their marketing budgets.”

As a result, marketing teams are now turning to cost-effective strategies to maintain momentum and sustain campaigns in a tighter financial landscape. Brands are repurposing influencer-generated content across platforms. Sharma explains, “Content is reused for ads, social media posts, and email campaigns, extracting maximum value from every collaboration.”

HashFame Founder Anirudh Sridharan, in an exclusive interview with exchange4media, said, “The Q1 slowdown isn’t new but feels more pronounced this year. The first quarter is always slower for influencer marketing, but this year, the impact is greater. Brands are tightening budgets, and influencers are reaching out to secure whatever deals they can. It’s a challenging scenario for both parties,” he said.

Shifting focus: Nano, micro, and mega influencers

As brands tighten their budgets, the focus has shifted to collaborations with micro and nano influencers who provide highly engaged, niche audiences at lower costs. “Collaborating with micro-influencers has become a go-to strategy for marketers looking to maximize ROI without breaking the bank,” says Sharma.

Nano influencers, in particular, are gaining traction due to their ability to deliver localized and targeted messaging. For example, DermDoc by Purple is offering ₹7,000 per creator for promoting its sunscreen through targeted collaborations with Telugu-speaking nano influencers in Andhra Pradesh and Telangana. Deliverables include one reel, a reposted story, and three-month usage rights, as deal shows on influencer marketing platform HashFame. 

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In contrast, micro and macro finfluencers are being offered ₹20,000 for one video and one integrated post. Insight Cosmetics has set aside ₹12,00,000 for influencer campaigns even during this dry period. 

Beauty influencers remain in high demand, with some earning up to ₹60,000 for high-quality videos, as the upcoming Valentine’s week and wedding season branded under various catchy campaigns, offers a fresh opportunity for brands to ramp up their efforts. 

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According to industry standards, mega-influencers command fees of ₹2,00,000 to ₹10,00,000 per post, while micro-influencers charge a more modest ₹5,000 to ₹20,000, making them a practical choice for brands aiming to optimize ROI.

Value4Brand CEO Neha Arora suggests brands are leaning on longer-term collaborations during this period. “When budgets are tight, brands avoid short-term marketing cycles and instead invest in extended collaborations. This not only saves costs but also builds stronger brand recall over time.”

Dot Media Co-Founder & CEO Shubham Singhal explains, “For direct-to-consumer (D2C) products, brands often provide influencers with unique discount codes to measure conversions. This approach ensures tangible returns on investment.”

Performance-based models on the rise

Performance-driven approaches, such as pay-per-performance and affiliate marketing, are gaining popularity. “Brands are increasingly opting for pay-per-performance models like affiliate marketing and pay-per-conversion deals,” says Sharma. “This ensures that spending is directly tied to measurable outcomes, making every rupee count.”

Barter deals are another cost-saving strategy brands are adopting. For instance, during the Coldplay concert in India, influencers were offered free tickets in exchange for creating promotional reels that showcased the brand’s product or captured the concert vibe. This approach allowed brands to maintain visibility without direct monetary investment. 

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Despite current challenges, influencer marketing remains a sustainable alternative to traditional advertising. Sharma emphasises the importance of tracking metrics like engagement rates, conversions, reach, impressions, and website traffic. “Balancing short-term conversions, long-term brand recall, and engagement is key to achieving sustainable success during dry periods,” he says.