Influencer Marketing’s Wake-Up Call

When Unilever CMO Keith Weed announced at June’s Cannes Lions festival that the leading CPG company would no longer partner with influencers who buy followers, it was a wake-up call to the industry about the rise of fraud in the practice of influencer marketing. Defined by eMarketer as marketing that “identifies and activates individuals who can sway the brand preferences, buying decisions, and loyalty of the broader population,” in practical terms the tactic also refers to how companies compensate celebrities, social media “stars,” or industry experts to create content on behalf of brands and endorse products — typically paying them based on their follower count.

“At best it’s misleading, at worst it’s corrupt,” Weed emphasized, while calling on social media platforms such as Google (which owns YouTube) and Facebook (which owns Instagram) to create greater collaboration and transparency around what data is accessed and available to third parties.

Weed’s words come as influencer marketing remains all the rage: A recent ANA study from April 2018 found that a whopping 75 percent of surveyed companies already use influencer marketing and almost half of them plan to increase spending on it over the next year. Of those not currently using influencer marketing, more than one-quarter indicated they plan to do so in the next 12 months.

Done right, influencer marketing can be a rewarding experience for the brand, the consumer, and the influencer, says Jess Turner, director of influencer and brand marketing at TULA Skincare. “We’re in an era now where millennial brands in particular capture a lifestyle that a community rallies around,” she adds.

However, what began as a specialized practice nearly a decade ago has expanded significantly, from a few brands working with high-reach stars to a much larger number of partnerships and an explosion of niche “micro-influencers” with smaller but deeply engaged audiences. The center of the influencer marketing universe has also shifted from YouTube to Facebook and Instagram.

“There are more choices for marketers out there,” says Erick Schwab, cofounder of Sylo, a third-party measurement and data analytics source for influencer marketing. “Brands have more questions about influencer audiences and transparency because they are spending more money.”

These industry trends have led to a $100 million problem of fraudulent influencers, according to research by Points North Group, a provider of third-party screening and measurement of influencer marketing. Nearly every brand and agency that has practiced influencer marketing has been duped by fraudulent influencers at least a few times, the firm contends. (See “How to Avoid Influencer Marketing Fraud,” below.)

The majority of social media influencers haven’t purchased fake followers; they have grown their audiences of real, authentic people by working hard and producing great content, says Sean Spielberg, cofounder of Points North Group. “But some influencers chose the shortcut of buying fake followers and cast an unfortunate shadow over the industry,” he adds.

Purchasing fake followers from dozens of companies is cheap and easy, so influencers can recoup the cost with just a couple of sponsored posts, Spielberg says. “With so many people clambering to be social media influencers, purchasing followers can seem like a quick way to get on the map and attract the attention of advertisers,” he notes.

In addition, advertisers and influencer networks have traditionally measured campaigns simply by counting the number of followers an influencer has (known as “potential impressions”), without checking whether they reached real people or generated meaningful engagement.

David Beebe, a branded content expert and former VP of global creative and content marketing at Marriott International, says there has historically been no standardization in the influencer marketing industry when it comes to partnering with influencers. “From finding who are the right ones to work with to the actual development of the creative to even what the deal structures look like, there is a lack of transparency,” he says. “It’s still the early days, so it’s like the Wild Wild West, a free for all.”
 
Meeting Influencer Marketing Challenges

Erica Gatlin, director of influencer marketing at 451 Agency/Wildfire, says she began working on influencer campaigns back in 2009. “Before it was called influencer marketing, we called it marketing to moms,” she says, noting that a large community of mom bloggers would write product reviews and self-report impressions.

These days, with so many influencers making a living off of their social following, a variety of new tools have emerged to measure influencer campaigns, including demographic information and location. If such information doesn’t match up to the influencer’s profile and content, it should raise a red flag, Gatlin says. “For example, I recently researched a parenting expert with a large following, but 45 percent of her audience were under 18 and 40 percent were males in Venezuela. It just didn’t match up,” she adds.

Brands are beginning to crack down by putting more effort into vetting even their minor influencer partners. For example, L’Oreal Active Cosmetics, which is investing 90 percent of its influencer marketing budget on Instagram, is performing background checks on the micro-influencers it’s working with as part of a new vetting process. “Smart marketers already know how to identify fraud based on their knowledge of the space,” Gatlin says.

She points out that social platforms are also cracking down on fraud as Twitter did when it started deleting tens of millions of accounts in July.

Measuring and managing large numbers of influencers are often daunting challenges. “The biggest challenge for us right now is measuring Instagram Stories engagement due to API restrictions,” TULA’s Turner says. Instagram reduced its API rate limit in April 2018 to protect user data privacy, but the move also reduced the ability to access and analyze influencer data. “We also face a challenge of managing large numbers of influencers we are considering,” she adds. “Managing the workflow at scale is a puzzle to be worked out.”

Still, Turner focuses on working to instill trust and foster transparency. “You don’t have to do it manually; there are a number of influencer platform tools on the market that can tell you the true reach of an influencer in terms of bots and fake followers,” she says. “Once you know the demographics and they match the audience you’re looking to reach, you can then make a qualitative judgment from there on the content and community fit, which, of course, has no algorithm.”

One of the most important lessons Logitech has learned over the past few years is that one-off influencer programs aren’t as effective as ongoing relationships, which is why the company’s approach is grounded in “relationships first, business second,” says Krista Todd, VP of global communications. Logitech works with influencers at each stage of the consumer journey across all of its brands, including Logitech, Ultimate Ears, Jaybird, Astro Gaming, Logitech G, and Blue Microphones.

The biggest challenge, Todd says, is identifying the right influencers. “When given a brief, we build in sufficient time to go through three important steps: identify, monitor, and engage,” she notes. “If you aren’t spending time doing those three things, you may choose the wrong influencers based on surface-level detail, not what is actually happening in their communities.”

Another challenge is measuring what matters. “It is important to match the objective with the measurement,” Todd says. “If the objective is awareness, then we should measure reach and impressions, but if the objective is engagement with the content, then we’d look at engagement rate.”

 The Missing Link of Standardization

With consumer trust in social media generally under attack — Facebook’s well-publicized problems with bots and data privacy issues have sent its stock tumbling in recent months — brands and agencies know they need to tackle the trust and transparency issues related to influencer marketing for the popular tactic to succeed in the long term. So far, standards for brands using influencer marketing are a missing link in efforts to mature the practice.

In the U.S., the Federal Trade Commission is focused on consumer protections rather than brands, while platforms such as Facebook and YouTube don’t focus particularly on brand safety. The Interactive Advertising Bureau does provide some guidance to publishers and marketers seeking to partner with influencers, and in Sweden offers an outline of standards and guidelines.

Industry players believe that will become the norm. “The next phase is going to be standardization across all areas of the industry,” Beebe says. “Everyone’s got to be completely transparent and trust everyone involved.”

Schwab agrees: “I think we collectively are participating as a community to get the right standards in place for this influencer economy to thrive for all. So far, we’re only scratching the surface. If we can work as a collective body, we can achieve great things for everyone in the industry.”

TULA’s Turner believes the future of influencer marketing rests on brands’ ability to foster real connections. “Brands want to scale influencer marketing, but at the same time, it’s essential that it remains a business channel based on personal and human connections for it to remain a powerful way to build stories around brands,” she says.
 
TIPS

How to Avoid Influencer Marketing Fraud

•     Look for clues. Followers leave behind clues to possible fraud, including big spikes in follower counts, generic or emoji-only comments, or a high share of comments in a different language, says Sean Spielberg of Points North Group.
•     Do your due diligence. “You have to have an understanding of who [the influencer] is, what their career is about, what kinds of advertising they have done before, and what kinds of material they have published online — a complete picture of who’s going to be out there representing you,” says Jeffrey A. Greenbaum, managing partner at Frankfurt Kurnit Klein & Selz.
•     Consider third-party vetting. “Self-reporting has to go,” says David Beebe, a branded content expert. “There has to be standardization of reporting and a third-party independent verification, where those analyzing the data don’t have a horse in the race.”

By Sharon M. Goldman