Wake Up, Sheeple: Brands Are Losing Money Off of Fake Influencer Followers

Over $1 billion, to be exact.
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Photo: Imaxtree

Photo: Imaxtree

As influencer marketing becomes an increasingly important pillar for brands and their budgets — spending is forecasted to hit $10 billion by 2020, up from $8.5 billion in 2019 — there's a chance that these businesses could be losing substantial money due to influencer fraud, according to a global economic study by cybersecurity company Cheq, released on Wednesday. 

In other words: Wake up, sheeple! Time is a flat circle! Instagram numbers are a social construct!

OK, we digress. The report's findings show that Instagram fraud can cost advertisers $1.3 billion in 2019 with the potential to reach up to $1.5 billion by 2020. "Influencer marketing is an exciting and fast-growing sector, but the amount of fraud and potential for harm in the sector is already highly significant," said Professor Roberto Cavazos of the Merrick School of Business at the University of Baltimore in an official statement. (He was hired to write the report.)

The study's research reveals that among 10,000 influencers audited by integrated social media company The Social Chain, about 25% of their followers are involved in fraud. How? There are a few ways: Influencers can easily purchase followers and likes via click farms or bots. (To add 1,000 "followers" on Instagram, for example, can cost as little as $16.) Engagement can be forged, too, as influencers can participate in "pods" or communities to consistently trade likes and comments on one another's posts. Want to know something #dark? "There are even vending machines in Russian malls selling fake Instagram likes," says the report.

There's also the chance that influencers could be posting fake ads or #sponcon, in order to scam their way into getting actual sponsored posts. Lastly, audience inactivity can come into play: "Many influencers have no access to 90% of their audience simply because it no longer uses the social network where they were followed," says digital analyst Brian Solis in Cheq's report. "This doesn't stop them from touting millions of followers, who will, of course, never see your content." (And let's not forget that these platforms' always-evolving algorithms can affect how followers see influencers' content, as well.) 

"In every aspect of digital marketing, there has always been a way for people to buy or fake the numbers," said Cheq founder and CEO Guy Tytunovich in an official statement. "This has been the case with other more advanced deceptions – such as ad fraud which costs marketers at least 20-times the costs of fake influencer marketing."

Of course, fraud is inevitable in the grand scheme of digital marketing, and influencer marketing won't be going away anytime soon. In fact, brands are cashing in on this method more than ever, tapping into wide net of nano-influencers with smaller followings for a larger reach. But that will only increase the chance of fraud, and Tytunovich notes that it's up to the entire "online influencer marketing ecosystem" to "to mitigate the early problems and deliver the authenticity and trust we all want to see."

Not only does that include the brands, marketers and platforms who are running these campaigns, but the influencers themselves who are agreeing to them, too. After all, let us never forget Fyre Festival, which all started with just one orange (and paid) Instagram post.

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