Fashionista is reporting that the Influencer Economy is overrun with fraudulent practices, which have cost brands $1.3 billion this year alone.
Citing a global study conducted by cybersecurity company Cheq, the story said of the “10,000 influencers audited… about 25% of their followers are involved in fraud,” which is an astonishingly high average for a pool that size.
Influencer marketing, as the story noted, is becoming an “increasing important pillar” in marketing budgets — spending is estimated to reach $10 billion by 2020, up from $8.5 billion this year — but the space is an unregulated mess. And, as brands begin to employ a “wide net of nano-influencers,” things are expected to only get worse.
As for the ways in which fraud occurs, the report found a wide variety. There’s the standard fare, like influencers buying followers and likes from click farms or bots (“1,000 followers can cost as little as $16,” according to the story); then there are more intricate plots, like “pods,” which are “communities that consistently trade likes and comments on one another’s posts” to juice engagement stats.
There’s also unsolicited, unpaid #sponcon coming from those hoping to “scam their way into getting actual sponsored posts.” And the article also mentions “vending machines in Russian malls [that sell] fake Instagram likes,” which is just… wow.
Unfortunately, according to the report, the only way to crack down on all of the fraud is for the entire “online influencer marketing ecosystem” to being working in concert “to mitigate the early problems and deliver… authenticity and trust.” Like that’ll ever happen.
You can read more about it at Fashionista.