From hashtags to headaches: Brands rethink influencer ties

India's influencer marketing business, projected to grow to INR 10,000 crores in value by 2027, has hit a sudden hurdle. The influencer community is reeling from a brand backlash following comments made by some popular YouTubers. We are seeing a knee-jerk reaction from brands regarding influencer marketing and many influencers have suffered due to the actions of a few. Brands scurried to cut ties with many—deals are being cancelled and contracts not renewed.

Recent media reports suggest that many Indian influencers have had to cut their rates by as much as 50% to retain their collaborations. While many collaborations have not been renewed, several brands are not considering influencer marketing.

We all know that influencer marketing continues to be a powerful tool for brands to reach their target audience. It helps them to boost visibility, credibility, and connect with audiences in a more authentic way than regular advertising can.

However, when an influencer tied to a brand partnership gets embroiled in controversy, companies face a critical decision: should they cut ties or stand by them? Navigating this crisis requires a well-thought-out strategy that balances brand reputation, public perception, and ethical responsibility.

But what happens when an influencer you have partnered with lands in hot water? A scandal involving a brand ambassador can quickly turn into a PR nightmare, leaving companies scrambling to protect their reputation.

Impact of a negative event

As a brand, the first thing you have to think of is reputation damage. If an influencer indulges in offensive behaviour and faces a follower backlash, it is most likely that the brands associated with her/him may get criticised. Erosion of brand loyalty is imminent. Expect certain loss of trust and credibility in the brand, since the consumers are most likely to question the brand’s values and associations.

If your influencer faces negative publicity, your brand will likely too. This will be more evident in case the influencer is part of an ongoing campaign. If the influencer has a contractual agreement, the brand might face legal or financial consequences if it decides to terminate it. Moreover, if customers stop purchasing due to the influencer’s association, there may also be an impact of the company’s revenue.

So, should you drop your influencer collaborations? Consider a few aspects first. Before taking any action, brands must conduct a thorough assessment of the scandal. Not all controversies hold the same weight—some may be misunderstandings, while others may be serious, ethical breaches. Look at the nature of the controversy—is it a personal mistake, a legal issue, or the violation of values that your brand upholds? Next, gauge the public reaction to the controversy by scanning social media and news. Finally, see how the influencer owns up to the controversy—have they taken responsibility for their actions or issued an apology.

Value alignment and risks

Your choice of influencer, whether scandal-hit or not, should align with your brand’s core values. In fact, your influencer marketing strategy should ‘always’ be guided by brand value and vision. It is a given that when you are selecting influencers, their content and storytelling must resonate with the brand values. If at any later date, the influencer’s actions contradict these values, then maintaining the partnership can damage credibility.

However, if the controversy is minor or the influencer takes steps to rectify the issues, then standing in support of the influencer can reinforce brand authenticity. It can actually help in building consumer trust in the brand.

Each decision carries risks. So, doing an impact analysis of the crisis is a must. This is because simply dropping an influencer abruptly may alienate their fan base from your brand. On the other hand, continued association could tarnish the brand image.

Check the long-term and short-term impact of the controversy. Ask questions—will it fade or have long-lasting repercussions? Try to understand the media and consumer reaction to the brand’s decision. Will the brand be criticised for dropping an influencer or be praised for it? And then, there are the legal implications to evaluate. As a responsible brand, the contractual obligations with the influencer will need to be addressed.

It starts with communication

Clear, transparent communication is the key, irrespective of the decision your brand team decides to take. Acknowledge the situation that has arisen due to the questionable actions of the Influencer your brand is associated with. Reiterating the brand’s ethics and values in the face of the influencer scandal may help alleviate some consumer concerns. Doing PR and consumer campaigns that highlight the brand ethos may help retain consumer trust.

Unless the scandal is too severe for the brand to weather, severing ties may not work in a brand’s favour. If a brand is not convinced about the ruckus around the event, pausing the collaboration until the situation plays out may be a sensible approach. In fact, if the influencer takes responsibility for her/his action, and issues apology to followers and public, then the brand may continue to support the influencer. It can be done by issuing statements jointly to acknowledge the situation, addressing consumer concerns openly, and reiterating a brand’s stance and values. Putting up a joint front with your influencer partner despite minor setbacks can actually go a long way to build consumer trust and retain loyalty.

— Vikram Kharvi, CEO, Bloomingdale PR.