Businesses the world over are increasingly turning to “Influencers” to promote their products and services. While such social media promotion techniques are proving to be better than traditional marketing techniques, several influencers are resorting to unethical and inappropriate techniques to artificially inflate their follower count. Collectively labeled as “Fake Influencer Follower Fraud”, the growing scam is expected to costs businesses upwards of $1.5 Billion by next year. Left unchecked, individuals and agencies adopting such wrong and falsified number of followers will increasingly defraud legitimate businesses looking at unconventional and modern marketing techniques.
The emerging influencer market includes content creators and social media account holders with large follower count who attempt to promote third-party products, services, and platforms. Interestingly, the number of social media profiles with several hundred thousand or even millions of followers is growing rapidly. However, not all such accounts may have legitimately and organically acquired such a massive follower or subscriber count. While artificial inflation of follower count is a fairly common occurrence, its actual negative impact on the businesses that are increasingly depending on such promotional techniques hasn’t been studied in detail, until recently. A new report attempts to look at the losses that companies could incur while betting on influencer marketing techniques.
Scale Of Fake Influencer Follower Fraud Much Bigger Than Anticipated:
Globally, advertisers and marketing agencies are increasingly looking towards and relying on social media influencers to promote their products and services. These influencers either create an entire promotional video or are seen using or reviewing the products or simply mention the product benefits during the content they create; publish and promote. Higher the follower count better is the exposure of the paid or promotional content. Needless to add, influencers with massive follower count are commanding a huge demand from agencies. Moreover, social media promotion is lot more targeted and personalized as compared to televised promotion.
The ad-spend or budget allocation to influencer marketing is increasing rapidly. According to research conducted by Mediakix, companies are expected to spend about $8.5 billion this year alone. Industry forecast claims advertisers might spend more than $10 billion next year. Needless to mention, with such huge amounts at stake, some social media account holders are employing unethical techniques to artificially boost their follower count. New York-based cybersecurity company CHEQ has worked with the University of Baltimore business school to estimate the actual monetary impact on companies that rely on such accounts and influencers.
A recent study suggested that $1.3 billion in influencer advertising dollars have gone toward fake followers, up from $500 million as InfluencerDB’s CEO Robert Levenhagen presented in his 2018 Influencer Marketing Summit keynote. Learn how to avoid fakes: https://t.co/EXAZyQyu0M
— InfluencerDB (@Influencer_DB) August 14, 2019
The “Economic Cost Of Bad Actors On The Internet ” report highlights the hidden but quite real costs of influencer marketing for brands. The report claims about 15 percent of an influencer’s followers are fake. These falsified numbers are essentially defrauding the businesses that take into consideration the follower count while deciding the payment to influencers. While the influencer market is truly a more effective, direct and authentic channel to reach out to interested and potential customers, the fake follower count is completely useless and detrimental.
According to the report, if social media companies, which include Facebook, Instagram, YouTube, and others, do not implement stringent techniques, the Fake Influencer Follower Fraud could end up costing agencies more than $1.5 Billion by 2020. At present, the losses are pegged at $1.3 Billion. What’s even more concerning that monetary loss is the gradual but permanent erosion of trust and negative impact on brands that could cause long-term and possibly irreparable damage.
Ad Fraud, Online Bullying And Fake News Negatively Impacting Brands, Agencies And Influencer Market:
Merely advertising products has now become archaic. Brands are constantly looking to boost awareness, and are trying to educate current and potential customers. They are trying to increase the target demographic. Needless to mention, subscriber or follower count can be considered as a solid unit of measurement to demonstrate impactful Return on Investment (RoI).
It is quite obvious that influencers with more followers will be perceived to be more attractive, extraverted, trustworthy, and approachable. These influencers seem to possess all the right socially desirable characteristics. In an attempt to gain more clients, sometimes influencers resort to unethical methods to artificially boost the follower count. There are “Click Farms” that promise thousands of instant followers for a few dollars. According to the report, these click farms charge just $49 for 1000 YouTube followers. For the same number of subscribers, the farms charge $34 for Facebook, $16 for Instagram, and $15 for Twitter.
How easy is it to become a fake Instagram influencer? https://t.co/3LEyOGCmlF
— Ashley Hildebrand (@ashleyhilde_) August 13, 2019
The problem lies not only with such fake accounts but also due to user inactivity. Agencies paying influencers based on the follower or subscriber count incur heavy losses. The report indicates influencers with one million followers stand to earn up to $25,000 per post. Needless to mention, owing to fake followers, companies can end up losing about $3,750 in RoI. On the other end is user account inactivity, which is equally troublesome. Social media platforms can have as many as 30 percent inactive users. Clubbed with the fake followers, they are equally damaging, noted the report.