The Domino Effect: How One Controversy Shook India’s Influencer Marketing Scene - Part 1

The Indian influencer marketing industry is facing an unprecedented crisis after YouTuber Ranveer Allahbadia’s controversial remarks on India's Got Latent sent shockwaves through the digital ecosystem. What began as an ill-judged comment has now spiralled into legal action, brand fallout, and a broader reckoning for content creators.

As brands scramble to distance themselves from the controversy, influencers – both directly and indirectly connected to the incident – are losing lucrative deals. Major event cancellations, heightened brand scrutiny, and sweeping contractual changes are reshaping an industry once driven by relatability and virality.

With agencies tightening compliance measures and legal consultations on the rise, the scandal has prompted a serious discussion about accountability in influencer culture. Will this be a turning point that leads to more responsible content creation, or is it just another blip in an industry known for its rapid shifts?

In this two-part series, Adgully seeks to understand the ripple effects of the controversy – from brand withdrawals to changing influencer strategies – and what it means for the future of digital marketing in India.

What should brands do?

Experts feel that brands should reassess their influencer partnerships to mitigate reputational risks.

It’s a wake-up call for brands to take their influencer partnerships seriously, points out Sahil Chopra, Founder and CEO, iCubesWire. He feels that it is high time brands started looking beyond follower count. They need to dive deeper into an influencer’s past content, their values and public perception. According to Chopra, regular monitoring, crisis response planning and a long-term mindset for value-aligned collaborations can help mitigate the reputational risks.

Kalyan Kumar, Co-founder-CEO of KlugKlug, emphasizes that brands have always been cautious and will remain so, given the high stakes involved. Recognizing risks is crucial to building a strong influencer marketing strategy that prioritizes brand safety. By anticipating potential challenges, brands can take proactive measures to protect their reputation and ensure influencer collaborations align with their core values. He suggests that brands look beyond flashy successes and optics to recognize and support hardworking influencers who truly add value.

Is virtual influencer a way out?

As AI advances, AI influencers like Lil Miquela and Lu do Magalu are reshaping digital marketing. With brands like Prada and Red Bull leveraging AI-driven personalities, the appeal lies in their consistency, brand alignment, and controversy-free image. However, concerns about authenticity, trust, and ethical use persist. While AI influencers offer new creative opportunities, brands must balance innovation with transparency to maintain credibility in the evolving influencer landscape.

According to Gartner, by 2026, 30% of influencer marketing budgets will shift toward virtual influencers. The Influencer Marketing Hub’s 2024 Benchmark Report says that 62% of marketers are already using or planning to adopt AI influencers.

Abhishek Razdan, Co-Founder & Chief Executive Officer, Avtr Meta Labs, feels that AI influencers can be a solution. In today’s rapidly changing media landscape, Razdan says, brands can build resilience into their influencer partnerships by engaging with AI or virtual influencers like Naina.

“These digital entities offer a unique advantage as they are meticulously crafted to uphold the brand’s values and are immune to the controversies that might affect human influencers. By leveraging AI influencers, brands can maintain a consistent and controlled message, ensuring that their reputation remains untarnished by unforeseen personal scandals or shifts in public opinion. This strategic use of technology allows for not only safeguarding the brand's image but also for delivering reliable and impactful marketing campaigns that resonate with diverse audiences,” Razdan adds.

As someone leading in this space, Ajay Kulkarni, Business Head, Ykone Barcode, has seen influencer marketing shift from a numbers game to a trust game. Today, it’s not just about who has the biggest reach, but who has the right voice. Kulkarni believes that brands need to build partnerships that are not just viral but valuable, resilient, and reputation-proof.

To get this right, he suggests that brands must:

1. Choose influencers based on values, not just views
2. Set clear, but flexible content guidelines
3. Learn from industry missteps to refine strategies

According to Kulkarni, Tata prioritizes long-term credibility over short-term hype and consistently upholds this approach. Whether through Tata Tea’s ‘Jaago Re’ campaign or Tata Motors’ influencer partnerships, the brand collaborates with creators who align with its values, reinforcing its credibility.

Public perception is unpredictable, but brands can stay ahead by:

• Looking beyond likes – Vet influencers for past content, values, and alignment with brand ethos.
• Planning for crises – A clear response strategy ensures quick action if a campaign faces backlash.
• Building long-term partnerships – One-off collabs can feel inauthentic; deeper relationships create trust.

Manjul Wadhwa, Founder & CEO, Anagram Media Labs and Inflyx, believes that building resilience in influencer partnerships starts with moving beyond the constant pursuit of “new” influencers. Traditionally, marketing strategies relied on novelty – where simply labelling something as “new” made it sell. Today, brands chase trending influencers, which can be risky. While it is tempting to jump on every trend, long-term partnerships offer more stability and credibility.

Instead of one-off collaborations, Wadhwa advocates for establishing influencers as long-term brand ambassadors. Repeated associations strengthen credibility, demonstrating the influencer’s genuine belief in the brand and fostering audience trust. Additionally, consistent messaging enhances brand recall among consumers.

Another key factor, according to Wadhwa, is selecting the right creators. Marketers should move beyond vanity metrics like CPV (cost per view) and CPE (cost per engagement) and focus on strategic indicators. Just as brands once matched celebrities to their image, they should now ensure an influencer's audience aligns with their target consumers. Sentiment analysis and audience profiling should be integral to this process, helping brands safeguard their reputation and collaborate with creators whose values align with their own.

(Tomorrow: Part 2 – As scrutiny on influencer marketing intensifies, how can brands strike a balance between creative freedom and the need for brand safety and content integrity? Beyond short-term risk aversion, recent controversies present an opportunity to refine influencer marketing strategies. We’ll explore practical frameworks that help brands navigate these challenges while fostering more authentic, sustainable, and mutually beneficial brand-creator relationships.)