From reach to credibility: How influencer marketing is being rewritten

India's influencer marketing industry is entering a period of reckoning. While brands continue to pour money into creator partnerships, a growing number of marketers are discovering that visibility alone does not guarantee credibility. Regulatory scrutiny is intensifying, consumers are becoming more aware of sponsored content, and brands are increasingly being forced to balance reach with authenticity.

The result is a noticeable shift across industries, from fashion and beauty to insurance and home furnishings, where marketers are placing greater emphasis on transparency, measurable outcomes and genuine creator-brand alignment.

The debate is no longer about whether influencer marketing works. It is about how it should work. Some brands are doubling down on creator investments, particularly through regional and niche influencers, while others are deliberately limiting influencer budgets and relying more heavily on customer advocacy and long-term brand building. What unites both camps is a growing recognition that trust has become the most valuable currency in the creator economy.

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Many marketers argue that the industry's future depends on greater accountability rather than less influencer activity. Nisha Khatri, Chief Marketing Officer at Libas said, "We welcome the regulatory scrutiny. In an era of digital fatigue, transparency is the only path to long-term brand love." 

According to Khatri, influencer marketing is moving away from a "post-and-pray" model towards structured accountability, with disclosure requirements increasingly being built directly into brand contracts.

Regulatory scrutiny around influencer advertising is tightening. According to the Advertising Standards Council of India (ASCI), 97.3% of the 1,609 influencer ads reviewed in FY26 were found to breach advertising guidelines. More than half of these violations were linked to restricted or prohibited categories such as offshore betting and alcohol, with illegal betting alone accounting for 54.5% of all cases. Among consumer-facing sectors, breaches were most common in beauty and personal care, followed by food, FMCG and wellness brands. In the cases examined, more than 60 advertising violations were recorded, many linked to missing or inadequate influencer disclosures, underlining how compliance issues are now spread across industries rather than being limited to a few isolated players. 

The findings also highlight a persistent transparency problem. ASCI found that many influencers failed to disclose paid partnerships, while others made promotional claims presented as personal experiences without adequate substantiation. The regulator's scrutiny extended beyond individual creators to major consumer brands. More than 500 beauty and personal care brands were found violating advertising norms between 2025 and January 2026, exposing how deeply influencer-led promotions have become embedded in marketing strategies.

The numbers suggest why such measures are becoming necessary. ASCI reported that 76% of India's leading influencers were found in contravention of advertising guidelines in 2025, up from 69% a year earlier. The regulator also found widespread non-compliance during major commerce moments, with 90% of influencer advertisements reviewed during Black Friday campaigns violating disclosure norms.

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For some marketers, the answer is not to spend more on influencers but to spend more selectively.

Shekhar Saurabh, Head of Marketing at Tata AIG General Insurance, believes the industry may be overestimating the value of paid endorsements. "While influencer marketing continues to attract larger shares of marketing budgets across industries, not every brand is chasing the trend. Some are deliberately keeping influencer spends below 5% of their total marketing outlay, betting instead on authentic consumer voices, long-term brand building and transparent communication. Their argument is simple: credibility cannot be bought, it has to be earned."

That view reflects a growing divide within marketing circles. Even as influencer budgets expand across sectors, some brands are questioning whether paid creator partnerships deliver stronger trust than recommendations from genuine customers.

Others, however, see creator marketing becoming more sophisticated rather than shrinking. Rupa Ravindra Murudkar, Vice President Marketing at Cholayil, said the future lies in regional relevance and specialised creator communities.

"The influencer ecosystem is witnessing a clear shift from a broad, pan-India approach to a more hyperlocal strategy. Consumers increasingly engage with creators who speak their language, understand local culture and reflect their lifestyles," she said.

Murudkar noted that Medimix has increased its digital investments in high double digits and nearly doubled its digital spending over the past year. Her comments align with broader industry trends showing marketers increasingly favouring regional creators with strong community credibility over national influencers with larger but less engaged audiences.

The growing importance of authenticity is also shaping how brands choose creators. IKEA India says it does not treat influencers as a traditional advertising channel and instead focuses on creators who already use its products.

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According to Huzefa Chhitalwala, Marketing Communication Manager at IKEA India, the company looks for the most organic fit rather than scripted promotional messaging. He said disclosure requirements ultimately benefit consumers by helping them distinguish between genuine recommendations and paid collaborations.

For performance-focused brands, measurement is becoming equally important. Chirag Jagwani, Chief Marketing Officer at Fixderma, said influencer marketing currently accounts for just 2% of the company's digital spend, although that figure could rise if results justify the investment.

"Influencer marketing is effective because we are measuring it. Today, it accounts for barely 2% of our digital spend, but I'd like to take it to 10% only when it delivers measurable impact. Growth without performance doesn't make sense," Jagwani said.

His position reflects another emerging trend. As influencer marketing matures, marketers are increasingly moving away from vanity metrics such as likes and views and towards direct business outcomes. "The moment an influencer campaign goes live, the impact starts showing up in sales. That's why we're focusing on measurable outcomes rather than vanity metrics," he added.

The industry's challenge is that consumer trust remains fragile. ASCI data showed that 88% of influencers eventually complied after regulatory intervention, suggesting that many violations stem from weak compliance practices rather than deliberate misconduct. However, the sheer scale of violations indicates that disclosure standards are still far from becoming industry norm.

For brands, the message is becoming increasingly clear. Influencer marketing remains a powerful tool, but the era of unchecked creator endorsements is coming to an end. Whether through stricter disclosures, hyperlocal creator partnerships, performance-based measurement or authentic customer advocacy, marketers are being forced to rethink what influence actually means in a marketplace where credibility matters as much as reach.