Influencer Fraud Is a Two-Way Street

The influencer marketing industry is steadily increasing its pool of investment. Already sitting nicely at about $9 billion, the drastic spike in attention and monetary value, as we quickly have learned, is a double-edged sword. Although this gives hope to those wanting the “instant fame and wealth” that the industry can offer, it is also speculated that such quick growth built on unsteady grounds can lead to a plateau or decrease in investment value.

2019 has been the peak year for social media influencer success and integration into business marketing strategies, but it has also revealed the largest concern the industry currently faces: fraud.

An article by ZDNet drew attention to the staggering fact that for the majority of influencers, upwards of 15% of their followers are fake. Similarly, the Wall Street Journal referenced a study that focused on influencers with a following between 50,000–100,000, noting that we can typically assume they pad their following by about 20%.

There are, at minimum, two clear reasons this behavior contributes to the detriment of business practices in the influencer marketing industry:

1. The perceived perks of the influencer career path present a quick, simple and attractive option for social media users of all ages, but especially for millennials. Countless people pick up an internet-connected device for their shot at success every day, but when the realities of an over-concentrated and competitive niche are confronted, many will turn to buying followers, likes and comments.
2. Brands have not paid close enough attention to quality engagement as a means of understanding how they are perceived by their followers. Establishing a close and trusting relationship between brand and customer requires discipline, specific standards and cautious exploration of the options they have — it’s important to remember that whichever influencers a brand publicly associates with is a reflection of their brand’s image.

Fraud in this industry is troubling because of how much unregulated power the influencer holds. According to an article by Forbes, around “92% of consumers trust an influencer’s recommendations more than an advertisement or traditional celebrity endorsement.”

In 2019 alone, an entire $1.5 billion was lost to influencer marketing fraud because of the many brands willing to pay as much as $250,000+ per sponsored post. The reality of this blow is startling enough for brands to reconsider how they vet their prospective collaborators and begin to incorporate much more calculated terms into their marketing strategy.

One simple solution that does not require brands to abandon the influencer market is the incorporation of more deals with the micro-influencer community. The value in reaching new audiences through pre-established connections has proved highly effective in greatly improving ROI and brand exposure when tested among these groups.

Micro-influencers, with a following of under 5,000 are honest, have lower rates and participate far less in fraudulent behavior.

• They have established themselves as well-informed within their specific niche.
• Relationships with their audience are more direct and they are able to interact with more followers.
• Their content is typically more specific and geared towards developing a well-defined niche community. This not only comes at a lower monetary exchange since their popularity is not a primary leveraging factor, but it also provides brands with more valuable exposure when appealing to the proper niche.

The influencer marketing industry has low barriers of entry which can be both exciting and concerning. Because of the low risk, high reward, no consequence approach attached to fraudulent profiles or engagements, companies need to be meticulous with who they work with and leverage this issue in order to reconsider price points if need be. Fraud has nothing to do with popularity or relevance, it stems solely from the quality of relationships with followers.

To re-establish legitimacy, it takes effort from both the business, influencer, and ideally, a third party to streamline the process of collaboration. Brands who do their due diligence can increase ROI exponentially compared to those who haphazardly engage in marketing deals.

With external assistance from influenc, we are able to guarantee authenticity by scanning influencer content logs and prior brand deals. Through our fraud prevention vetting process, not only can we enable effective business practices, but we also ensure that the brand deals we facilitate are fair for everyone involved. In so doing, we are able to soothe a major growing pain of this industry and positively influence the outcomes of social media campaigns and business relationships.