Advertisers spent a cool $1.69B on Instagram influencers last year, a figure expected to double by 2019.
Because of the hype surrounding this trend, its early infancy, along with the (alleged) direct-to-consumer access influencers supposedly provide, there’s a lot of reasons brands are jumping on this.
But how effective is this? Are they for real? Or are they really just full of shit?!
Or even #FraudNews, as the President would say? There are a lot of layers to this so hang tight.
Just some basic stats: The Association of National Advertisers surveyed its members, which found that 75% of marketers currently work with influencers. OK, so far, so good.
Within that pool, 43% plan to pump more money into influencers next year. Of those who did not yet use influencers, 27% indicated they would in next 12 months.
Here’s the big issue.
It’s super easy to game the system. Again, the layers. First one being fake followers.
You can create a fake influencer in two minutes, post some modeling pics from some cute girl in Australia, name her Logan Gerwitz, acquire a shitload of followers, and boom, you’re in business.
One agency actually made money off a fake “influencer” account…
In fact, to prove this, one influencer marketing agency did exactly that—and then had brands pay thousands of dollars for sponsored posts, just to showcase how easy that shit was to pull off.
The first subheader said “How Anyone Can Get Paid To Be An Instagram Influencer With $300 (or Less) Overnight.”
Pretty creative and compelling, right?
Here’s what they did. (They’re named Mediakix, btw, just so that’s out of the way. Shout out to them.)
From there, they applied to campaigns on popular influencer marketing platforms. You need 10k followers to get that.
“How To Build A Completely Fake Instagram Influencer Account”
They created two totally fictitious Instagram influencer accounts, built solely with bogus followers and engagement: 1) a lifestyle and fashion-centric Instagram model and 2) a travel and adventure photographer.
The model influencer was built from a one-day photoshoot. Another completely from stock photos. (Real talk.)
Once the profiles were create, Mediakix did two things: 1) bought fake followers, 2) bought fake engagement.
(On some odd matrix shit, their campaign actually is a brilliant form of meta-marketing. Defrauding to showcase others’ fraud all the while maintaining some sort of Robin Hood’ish ethical high road that somehow makes me believe in them more…And now my head’s exploding. Back to the story.)
How they got paid
Once there was a decent level of engagement, Mediakix set out to get that moolah. Once you have a following, all you have to do is sign up on an influencer marketing platform (here are eight) where brands and influencers match up.
Once we had the accounts on a few platforms, we applied for new campaigns daily. The application process ranged from simply clicking a button to writing a short message to the brand, depending on the platform’s requirements.
Results. We secured four paid brand deals total, two for each account. The fashion account secured one deal with a swimsuit company and one with a national food and beverage company.
The travel account secured brand deals with an alcohol brand and the same national food and beverage company. For each campaign, the “influencers” were offered monetary compensation, free product, or both.
In other words, pay for a few follows, scam a brand out of dollars. It’s a form of catfishing, serving as an allure of something enticing…but ultimately not real.
But there’s more…
Here comes that aforementioned #layer again.
Ali Mahvan, CEO of shopping app Sharebert, produces and hosts influencer merchandise. Under this arrangement, influencers promote their own products, ranging from hoodies to t-shirts and collect the lion’s share of proceeds.
With follower counts from $50k to 1M, you’d think it’s easy money for influencers, right? Not so fast.
“We’ve worked with influencers with 10k followers and influencers with 10M followers,” Mahvan tells WealthLAB. “One of the strangest things we’ve noticed is that follower count very rarely coincides with sales.”
Influencers he’s worked with appeared to have great engagement, lots of content and, obviously, lots of followers. But the results, he says, were “embarrassing.”
Oddly enough, the influencers still had an expectation of compensation, despite not moving a single item.
“They couldn’t move their own merch,” Mahvan says, “but were insulted they weren’t paid for the quote-unquote effort they put in to quote-unquote promoting their own merch.”
Is the influencer economy doomed?
In spite of the ease with which you can hack your follower count, influencer pay is still determined by the number of followers.
“I won’t name names, but we’ve dealt with influencers that had a quarter million followers, typically charged upwards of $1,000 for a single sponsored post,” says Mahvan, whose platform produces, designs and then gives the Instagram post and/or story to distribute. “And they couldn’t sell one piece of merchandise with their own face on it.”
To combat this, there are verification softwares popping up left and right to gauge the veracity of these accounts. Dovetale, another company listed in the same NYT report, says it uses over 50 metrics to determine account legitimacy.
Basically, a social #FakeNews meter of sorts, trying to make influencer marketing great again.
But Mahvan says the influencers are still getting around that cat-and-mouse game by resorting to growth pods or engagement pods, a form of inter-influencer engagement, commenting on each other posts to inflate the engagement.
“It’s all real followers and real likes but it’s fraudulent activity,” Mahvan says. “Everyone in the Pod is only there to grow their own following so the engagement doesn’t mean anything.”
While fake followers can be detected with these verification softwares, growth pods can’t—they’re real people.
Unlike Twitter, who’s cranked down on #FakeUse hard, Instagram—while cracking down—has come off a bit more laissez faire about the whole thing, encouraging advertisers to use third-party account “verifiers” to make sure accounts are real.
“We knew this kind of day of reckoning would come,” Erick Schwab, the co-founder of Sylo, which vets influencers for fraud, told NY Times. “We’ve gotten tons of brands, agencies, vendors emailing us, who we’ve been having conversations with for a while, but now they’re sort of like, this is being demanded.”
Source: New York Times/Captiv8
“They’ve artificially inflated this influencer economy and brands were just ready to get on to the next thing, which still was better than advertising in print,” Mahvan explains. “But outside of agencies with vetted influencer accounts—and we get fantastic results with those—you’re pretty much pumped and dumped the entire influencer economy.”
FWIW, here’s Mediakix’ infographic on the influencer marketing market. And before you splurge on influencer marketing, just make sure you know what you’re getting into.