Cheatsheet: What you need to know about influencer fraud

Influencer marketing fraud is a growing problem in an industry valued at over $1 billion. Influencers — essentially social media stars with large followings — are attractive to marketers for the notion they’re more “authentic” than regular ad buys. But some of that authenticity is fake, whether it’s using so-called Instagram pods, bots or buying followers, and many marketers are starting to question just what they’re really getting for their money. We break it down.

The numbers

  • A single day’s worth of posts tagged #sponsored or #ad on Instagram contained over 50 percent fake engagements, according to data from anti-fraud company Sway Ops. Out of 118,007 comments, only 20,942 were not made by bot followers.
  • Sway found that more than 15 percent of influencers who sign on to do sponsored posts (and take the product associated with it) never create a post.
  • Bot comments are responsible for over 40 percent of total comments for over 500 of 2,000 sponsored posts made each day, per Sway.
  • Pods remain a problem as well: Sway’s recent research found that out of 2,000 posts, an average of only 36 sponsored posts made per day contained no Instagram pod activity, fake comments, fake likes or uneven ratios of bot followers to engagements.

On Instagram pods
What remains up for debate is what constitutes fraud. While most agree that “bot” comments and buying followers are fraud, influencers themselves disagree about whether pods are considered fraud. Instagram pods are groups of up to 30 Instagrammers that work with each other to comment and like each other’s posts — hacking Instagram by “increasing” engagement, albeit artificially. Many influencers use pods and say it’s totally legit. “I don’t see pods as a problem because bloggers in a similar set of interest groups are supportive of each other,” said one influencer who preferred not to be named.

Others say it’s shady: “For Instagrammers or influencers, they are artificially building themselves,” said YouTuber Zach Bussey. “It’s a dangerous precedent to set for themselves because it means they can never quit doing it. It’s not like they will get to a certain number and then say, ‘I can quit that,’ and see their numbers plummet. Instead, they have to keep doing it — over and over and over to keep any semblance of growth.”

How to spot fraud

Most people agree it can be tough to spot fraud, but there are a few methods:

  • An overnight spike in followers that cannot be explained by outside factors usually means the influencer has purchased followers.
  • A skewed ratio of engagement (likes and comments) to followers. Comments should represent about 2 percent of total engagement on Facebook, Instagram and Twitter.
  • Comments that are unrelated to the actual content posted usually indicate bought audiences.
  • About 15 percent of comments should correspond with the purchase funnel.

How brands respond
“Some brands are frankly oblivious to the real-versus-fake-audience issue. They want audience size at any cost, and they’ve become desensitized to “paid followers/engagement” thanks to the platforms’ own ad products,” said Collectively CEO Alexa Tonner.

Many brands are also seeing bot use grow — and there’s been a movement to standardize influencer marketing to focus it on harder metrics like conversion or sales, instead of likes and engagement. 

The FTC view
Fraud is so much in the limelight that the Federal Trade Commission recently issued 100 letters to influencers and brands about how they were disclosing endorsements or paid advertising. Less has been said about bots or buying fake followers — the FTC doesn’t necessarily care about or control that, since it’s focused on the customers — but much of fraud is also about shady practices that include mislabeling sponsored content. 

The influencer agency view
“It’s a pretty poorly kept secret that some influencers buy fans, but I’d say it’s probably a pretty small percentage. There’s no way to tell by just looking at an account, but we keep a close look at growth rate of influencers and the ratio of engagement to followers,” said Tonner.

“I don’t think brands even know how large this problem actually is, and the business risk for influencer platforms seems to cause them to ignore talking about it,” said Nick Waken, founder of Sway. “This reminds me of banner ads in 2012 before people figured out that bots were responsible for all of their impressions.”

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