Thursday, May 28, 2020

Yes, Most of Influencer Marketing is Fraudulent

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Pesach Lattin
Pesach Lattinhttp://pacevegas.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pace Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

As an industry that has a history of settling for vanity metrics, influencer marketing is particularly susceptible to fraud. Recently, CBS reported that influencer marketing suffered from $1.3B in fraud in 2019. More than half of influencers in the UK had engaged in some sort of fraudulent activity, according to a recent study. Let that sink in — that’s billions wasted on false measurement,  in an industry in which brands are still ramping up spend. In some regions, finding reliable influencers has the same odds as flipping a coin.

To their credit, influencers themselves don’t have much choice. Considering that the go-to metric is “engagement” and the next is “follower count,” influencers live in the same environment as cyclists do in the Tour de France. In effect, they have no way to truly compete unless they use outside tools to enhance their performance, because so many others are doing it.

Though buying fake follows is blatant, there are also grayer areas in the emerging sector, which brings economic costs higher still. These include widespread use of Automation software to follow and unfollow users automatically to secure a net increase in followers; so-called “pods” trading mutually beneficial shares and engagement; and influencers inflating their value by deceiving brands into believing they enjoy endorsements from companies.

That fraudulent activity is costing advertisers $1.3 billion this year, according to a report from Cheq, a cybersecurity company focused on the digital media space, and University of Baltimore economist and professor Roberto Cavazos. And that’s only what is blatantly fraud.

On top of this, there is a huge amount what is called influencer ‘‘pods’’ – which allow influencers to “trade engagement back and forth” amongst themselves. This operation involves one influencer commenting on, or liking, a certain number of posts, and is reimbursed in kind with comments on their own activity and posts.

While this behavior serves to boost engagement with influencers’ Instagram posts, it is clearly not what brands have in mind when creating and paying for. And these inflated clicks and likes, are definitely fraudulent but hard to detect.  

As many people have pointed out– if these influencers are so “influential,” why aren’t the engaging in pay-per-performance campaigns? They would make considerably more money, and more importantly, prove they aren’t frauds. 

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