Why creator licensing is trumping traditional ads as an ROI driver

As ad-free viewing becomes the norm, brands have been increasingly turning to social media to gain more traction. One of the most effective methods is creator licensing , which delivers a return on investment (ROI) of 2x to 3x, according to experts. This marketing approach, also known as whitelisting, allows brands to use an influencer’s profile to run ads, creating content that resonates more effectively with target audiences.

Shubham Singhal, Co-Founder & CEO of Dot Media, describes whitelisted ads as a “game-changer,” particularly for direct-to-consumer (D2C) brands . “When brands use an influencer’s profile to boost ads, they tap into the influencer’s trust and face equity. This not only enhances engagement but also positions the brand effectively in a crowded market.”

Currently, 1 in 4 gen Z individuals is part of the workforce, and by the end of 2025, every second gen Z will be earning. This generation drives 43% of India's consumer spending, with gen Z influencers playing a key role across categories such as 50% of total spending on footwear, 48% on dining, and 47% on fashion and lifestyle, as highlighted by Snapchat's recent report.

Why c reator li censing outperforms traditional ads

Rahul Tekwani, Managing Partner at Branding Edge, adds, “ Creator-licensed ads offer unparalleled precision. Brands gain access to influencer audience data, enabling them to run highly targeted campaigns and retarget lookalike audiences effectively. This not only amplifies the authenticity of influencer content but also ensures campaigns drive meaningful results, from higher conversions to sustained engagement.”

An example of this impact is Vastrado's collaboration with Samay Raina’s India’s Got Latent (IGL) . The episode dominated YouTube's trending charts, securing the #1 and #2 spots for four consecutive days. As a result, Vastrado experienced a 150% surge in revenue and a 20X increase in website traffic.

While emerging brands and startups are rapidly adopting this trend, the question arises: what about established giants like Zomato, Blinkit, Levi’s, Maybelline, and Lakmé, which already boast millions of followers on Instagram?

Ads originating from influencers’ profiles often feel more organic and relatable compared to those posted directly by the brands themselves. Singhal highlights, “If an ad comes directly from a brand's channel, it might feel like a typical promotional push. But when it originates from an influencer’s profile, it feels more organic and relatable, leading to better performance. Consumers are more likely to stop scrolling when they see content from a face they recognize and trust.”

This authenticity drives higher engagement, making creator licensing particularly appealing for brands looking to cut through the noise of traditional advertising.

The choice of platform plays a critical role in the success of whitelisted ads. Singhal notes, “Instagram and Facebook are ideal for gen Z and FMCG brands, while LinkedIn works well for IPO and positioning campaigns. YouTube, on the other hand, is more sales-driven with clear call-to-actions. Each platform serves a unique purpose depending on the brand’s goals.”

Navigating the challenges of c reator l icensing

Creator licensing offers numerous benefits, including branded content ads, brand tags, and mentions to boost reach and visibility. Shoppable product links drive conversions, while paid collaborations secure exclusive, campaign-focused content. Licensed content’s versatility across platforms maximises ROI and ensures consistent messaging.

However, it comes with challenges. Transparency in advertising is vital for maintaining trust. Additionally, rapid profile growth driven by ad spending on platforms like Meta may potentially impact an influencer's organic growth—a concern that, as Singhal points out, remains largely speculative.

Another challenge lies in managing costs. Shan Jain, Independent Director and Brand Strategist, explains, “Cost creep is a real issue. With platforms and influencers taking their share, expenses can escalate quickly. Furthermore, over-reliance on paid collaborations risks diluting authenticity, which can erode trust if audiences detect insincerity.”

Saurabh Tekwani gives a perfect solution to the cost creep and emphasises the importance of genuine partnerships: “Sustained success hinges on aligning with influencers whose values resonate with the brand. Long-term collaborations yield content that’s consistently engaging and impactful.”

However, there are critical considerations for brands. Paraminder Kaurmua, a beauty/lifestyle influencer with 26.5K followers highlights a concerning reality of creator licensing , noting that small businesses often face exploitation, with their viral videos being used without proper permission or compensation.

The financial structure of whitelisted ads varies widely. Nano and micro-influencers may charge as little as ?20,000 per campaign, while top-tier influencers command ?3 lakh or more. Influencers often add 20% of the campaign cost for ad boosting, with overall budgets tailored to specific campaign objectives, Singhal notes.

Why brands and influencers embrace creator licensing

For brands, creator licensing blends authenticity with precision, delivering high ROI and fostering trust. Influencers benefit too, unlocking new monetisation opportunities. Ayush Nambiar views it as a win-win collaboration: “When built on authenticity and trust, this partnership delivers impactful results for both parties. Durex, for instance, excels in balancing sensitivity with boldness. Its campaigns, often humorous and educational, tackle subjects like intimacy with a relatable approach that encourages engagement without appearing overly promotional. By leveraging whitelisted ads, Durex enhances its reach while preserving authenticity, allowing influencers to carry forward its messaging in a voice that aligns with their audience’s expectations. This blend of brand control and influencer trust ensures that even sensitive topics feel approachable and genuine.”

Shan Jain adds, “Balancing reach and frequency is crucial. High reach with low frequency drives awareness, while excessive frequency risks oversaturation. Success lies in optimising this balance to ensure sustained engagement.”

What’s particularly interesting is how the focus is shifting towards performance marketing. Vanity metrics like likes and shares are taking a back seat as brands and influencers prioritise tangible results such as clicks on product link tags, inquiries, and purchases.

Shan points, “Metrics like click-through rates (CTR) above 1.5% and cost-per-engagement below ?3 are considered benchmarks for success.” Brands increasingly prioritise conversions—such as clicks, inquiries, and purchases—over vanity metrics like likes and shares.

Overall, experts agree that creator licensing will be a key trend to watch in 2025, offering brands a powerful way to engage audiences and drive growth. As this practice evolves, it promises to redefine influencer marketing strategies.