Getting to work with the right social media influencer can give your business a boost. According to Business Insider, the influencer marketing industry will be worth $15 billion by 2022. It has already been able to generate billions of dollars for businesses with less initial investment than standard advertising. This can make it extremely attractive, especially when compared to other marketing strategies. 

Influencer marketing often works for one simple reason: consumers are willing to listen to influencers because they are "normal people" and not paid celebrity endorsers. As a result, consumers may see them as more authentic and trustworthy.

Businesses pay influencers, give them free products, invite them to events, and even award them all-expenses-paid trips in exchange for positive reviews or recommendations. Because these arrangements can be lucrative, some influencers use fraudulent strategies to make themselves more attractive to marketers. This issue has become widespread, with some businesses spending their marketing budgets but getting very little in return.

What Is Influencer Marketing Fraud?

An influencer is simply any person with the power to affect the decisions of others. Some AI-powered artificial influencers are not people at all, but algorithm-powered programs that have amassed large followings. 

Influencer marketing is the use of influencers to help sell products and services to a target audience. Companies prefer genuine influencers who put a lot of effort and time into building an engaged following. These content creators use multiple modes of communication to interact with followers. Some produce standard entertainment offerings on a variety of platforms to reach different audiences.

Many create videos related to their chosen niche and publish them on YouTube. Others stream content in real-time. This type of production is easier thanks to 5G connections. Influencers are active on today’s popular social media platforms, where they post pictures, videos, and written content. Building an audience using any of these media and platforms takes time and hard work. 

Fraudulent influencers seek easier ways to build their follower numbers. They try to fool businesses by faking their statistics. Companies that do not perform due diligence may end up paying influencers who purchase fake followers to inflate their numbers.

Sites like Twitter and Instagram are doing their best to remove automated accounts from their platforms. Still, influencers dream up new ways to get around these protections. For this reason, companies should take extra care when launching campaigns.

The Prevalence of Influencer Fraud

Influencer marketing fraud is more common than it may appear on the surface. In 2019, while influencer marketing spend hit an unprecedented $8.5 billion, influencer fraud cost companies $1.3 billion. That’s nearly 20% of marketing expenditure wasted on influencer fraud. Even corporate marketing departments can expect to lose about 15% of their budget to fraud. 

For smaller businesses with modest marketing budgets, this percentage can be ruinous. 

Types of Influencer Fraud

Like any other type of scam, influencer fraud comes in different forms. Here are the most common:

  • Fake followers:

  • In this type of fraud, the influencer pays a bot farm to artificially inflate their following using fake accounts.

  • These followers are not real, and even when they are, they are not interested in the influencer and are unlikely to engage with the influencer’s posts.

  • To disguise the fact that their following is fake, influencers typically add the followers gradually to make the growth look more organic.

  • Fake engagement:

    • One of the shortcomings of a fake following is that it’s easy to sniff out when the engagement is low.

    • Influencers buy engagement in the form of likes and comments from bots.

    • This gives the impression that the influencer is getting real, overwhelming, and positive attention on their posts, making their followership look more genuine.

  • Influencer pods:

    • An influencer pod is an organized alliance of influencers that engage with each other’s posts via likes, comments, and ‘shoutouts’ (when a contributor dedicates a post to another page to encourage its followers to follow that other page).

    • Influencer pods are not necessarily a bad thing, as they can help pages in the same niche grow together. However, some pods specialize in selling engagement to struggling influencers.

  • Fake sponsored posts:

    • This type of fraud is most common on Instagram, where fraudulent influencers simply tag a post as sponsored, even when it is not.

    • Businesses that see these tags can get tricked into thinking the influencer is popular with other businesses, and they may seek to use them to engage with their competitor's audience.

  • Fake giveaways:

    • In this type of fraud, the influencer promotes a cash or gift giveaway.

    • When the post gains lots of engagement from interested followers, the influencer changes the caption of the post and tags it as sponsored, then uses the attention to market themselves to brands.

    • Since the engagement was technically genuine (real followers trying to win the giveaway), this kind of fraud is harder to identify than normal fake engagement.

How to Identify Influencer Fraud

Watch out for telltale signs on an influencer's profile. It's essential to go through all of an influencer's social media profiles before working with them, looking through each of their posts to spot potential red flags. Below are some common signs of a fraudulent influencer:

 

  • They have a sudden and inexplicable spike in followers. This is often a sign of bought followers. However, legitimate sudden spikes can come from viral videos, live streaming sessions, a mention by a larger page, and fan get-togethers. In the absence of these, the spike is likely due to bought followers.

  • They have a very low engagement rate. If the following is in the tens of thousands, but posts get a hundred likes and comments, chances are the followers are fake.

  • The engagement does not match the post. If the comments seem to have nothing to do with the post, then they are likely bots. Since the engagement is automated, it's likely to be unrelated to the post.

How to Protect Yourself From Influencer Fraud

There are additional steps that you can take to lower the chances of influencer fraud. 

 

  • Use a social media measurement tool: A social media measurement tool can track an influencer’s engagement levels, look out for common red flags, and even estimate the potential return on investment from working with a given influencer.

  • Scrutinize the influencer's profiles: Look through the influencer's profiles, content, following, and engagement. Watch out for sudden and unexplained spikes in growth, low or fake engagement, and missing profile pictures and bios.

  • Work with micro and nano-influencers: Micro and nano-influencers are influencers with smaller followings — usually just a few thousand people — who are highly engaged.

    • Since fraudsters try to mimic very large accounts, micro and nano-influencers are less likely to have fake followers. They also have high engagement rates that will offer a higher return on investment.

  • Use multiple metrics: When you use just a single metric, such as following or engagement, it’s easier for a fraudulent influencer to game your system.

    • Instead, use various metrics, including post frequency and content focus.

    • Also, you can check profiles across multiple social networks to see if they have a consistent persona and brand.

  • Align your incentives: Simply paying an influencer to talk about your business is likely to give them the wrong incentives.

    • Instead, you can look for an arrangement that aligns your incentives. One clever trick is to offer a commission for every sale and then give them a UTM code to track sales.

This content is provided for information purposes only. All information included herein is subject to change without notice. Verizon is not responsible for any direct or indirect damages, arising from or related to use or reliance of the above content.