Fake influencers are costing brands more than $1 billion USD a year

According to a new report from Business of Fashion, influencer fraud is costing brands more than $1 billion USD a year. The study, which was conducted by cybersecurity company Cheq and the University of Baltimore, states that influences who pay for fake followers or engagement will cost advertisers $1.3 billion USD this year alone. This number is also projected to grow to $1.5 billion USD by 2020.

The reason behind the staggering amount of lost dollars is due to ‘influencers’ purchasing fake followers and engagements (including likes and comments), which then in turn makes brands believe they are worth collaborating with. Marketers then spend big bucks to provide free trips, gifts and more for these ‘influences’, but don’t gain anything in return. According to Mediakix, this year marketers will spend $8.5 billion on influencers alone.

Celebrities like Kim Kardashian with a following of tens of millions can earn up to $300,000 USD a post, while other top fashion influencers are said to earn around $12,000 USD per post. For those looking to expand their social presence, influencers only need to spend $16 USD for 1000 followers on Instagram.

There are significant further indirect costs – notably erosion of trust and potential brand impact.

Roberto Cavazos

Roberto Cavazos, a University of Baltimore professor and economist in the BoF report, also conducted a study and found that 25 percent of followers of 10,000 influencers were fake, while another study stated that out of 800 brands and marketing agencies, two-thirds found out they had worked with influencers with fake followers.

Following the research, Cavazos believes 50 percent of engagement on sponsored content is fake. Aside from buying engagement, Cavazos noted that some influencers post fake sponsored content “to dupe brands into believing they have a proven track record – and in order to get hired for a future engagement”.

Head over to Business of Fashion to read the full report.

The age of the influencer might be coming to an end

Influencer marketing has boomed in popularity because it leverages the dedicated following of social media influencers to reach targeted audiences. Advertisers are estimated to spend $2.3 billion in Instagram influencer marketing in 2020.

Instagram is almost single-handedly responsible for the rise of the influencer, and yet it is now reportedly considering changing the platform in a way that would seriously impact the influencer industry.

According to TechCrunch, the social media giant is testing hiding likes from public view. That’s right – you may no longer be able to see how many likes a picture has received which would put a serious dent in the business model of influencers who use those metrics as leverage to sell posts.

Instagram confirmed the news saying it is testing the feature because it wants “your followers to focus on what you share, not how many likes your posts get”.

We want your followers to focus on what you share, not how many likes your posts get. During this test, only the person who shares a post will see the total number of likes it gets.

Instagram

That’s how Instagram describes a seemingly small design change test with massive potential impact on users’ well-being.

Narcissism, envy spiraling and low self-image can all stem from staring at Like counts. They’re a constant reminder of the status hierarchies that have emerged from social networks. For many users, at some point it stopped being fun and started to feel more like working in the heart mines.

If it goes ahead, likes will still be visible to the person who owns the account though the public will only be able to see a handful of handles that have liked the image. It is believed that the move is in response to growing concerns over the impact the app has on mental health. When asked about the change, Instagram told TechCrunch, “exploring ways to reduce pressure on Instagram is something we’re always thinking about”.

If Instagram rolls out the feature, it could put the emphasis back on sharing art and self-expression, not trying to win some popularity contest. Does this mean the age of the influencer is finally coming to an end? We’re certainly entering unchartered (and very interesting) waters. Watch this space.