Influencer marketing has taken hit post Ranveer Allahabadia fiasco; brands need to take a sane perspective of the situation instead of avoiding influencer market, seeing its projected to grow to over Rs 10,000 crore in value by 2027

The Indian influencer community is reeling from the backlash from brands based on the words of some popular YouTubers had on them as whole. Brands scurried to cut ties with many of them, deals were cancelled, contracts were not renewed. We are seeing a kneejerk reaction from brands regarding influencer marketing and many influencers have suffered for the action of few.

Recent reports from Money Control and Economic Times show that many Indian influencers have had to cut their rates by as much as 50% to retain their collaborations. Many of the collaborations have not been renewed. Many brands are not even considering going the Influencer marketing way, according to media reports.

But is that the way to go?

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’ve 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.

How the negative event can affect the brand

One of the first things that as a brand, you will have to think of reputational damage. If you are associated with an influencer who has indulged in offensive behaviour and facing follower backlash, it is most likely that the brands associated with such an influencer may get criticized for partnering with them. Loss of brand loyalty to certain extent is imminent. Expect certain loss of trust and credibility in the brand, since the consumers are most likely question the brand’s values and associations.

If the influencer is facing negative publicity, you can be certain that your brand and products are likely to face the same. This will be more evident in case the influencer is part of an ongoing campaign. Expect some bad press too. If the influencer had a contractual agreement, the brand might face legal or financial consequences if they decide to terminate the partnership. Additionally, if customers stop purchasing due to the influencer’s association, revenue may decline.

So, should you drop your influencer collab? Check these out before deciding on a course of action:

Assess the situation

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 a violation of values that you brand uphold. Next gauge the public reaction to the controversy. Check the audience sentiment through social media and news coverage. Finally, see how the influencer owns up to the controversy – have they taken responsibility for their actions or issued apology.

Align with brand values

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 influencers 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.

Evaluate potential risks and rewards

Each decision carries risks. So, doing an impact analysis of the crisis is a good idea. 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’s 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 praised for it? And then there are the legal implications. As a responsible brand, the contractual obligations with the influencer will need to be addressed.

Here’s what you can do

Clear, transparent communication is the key, irrespective of the decision the company has taken. 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 helps to alleviate some consumer concerns around the scandal. Doing PR and consumer campaigns that highlight the brand ethos can help in retaining consumer trust.

Unless the scandal is too severe for the brand to weather, severing ties completely may not always work in the brand’s favour. If as a brand you are not convinced about the ruckus around the event, pausing the collaboration till the situation plays out works well.

In fact, if the influencer takes responsibility for their action, and issues apology to their followers and public, then the brand can continue to support the influencer. It can be done by issuing statements jointly to acknowledge the situation, addressing consumer concerns openly, and reiterating 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.