How Influencer Marketing Fraud Scams Businesses

What is a social media influencer?

Social media influencers marry word-of-mouth advertising with the concept of going viral. The idea is that someone with a large social media following could also have a lot of influence on the tastes and trends of a desirable demographic. What the Kylie Jenners of the world wear, eat or care about makes an impression on their social media audience. 

Rather than trying to buy ads or game metrics by triangulating social media outreach efforts, marketers pay individuals with a large social media following to post about their client’s brand, products and services.

Social media influencers support a company’s causes and mimic its tastes, but a business isn’t going to have to offer a $100 million contract for them to endorse their products. The affordability of influencer marketing is a gamble that companies are often willing to take.

Celebrities like Beyoncé and Ariana Grande are legitimately popular stars, online and off. Their fans want to look and dress like them, use the same products and frequent the same places. They’re also outside of the pay grade for the average brand when it comes to endorsements. Instead, smaller businesses can utilize micro-influencers to minimize investment and maximize ROI.

Micro-Influencers

Rising social media stars are sometimes called “micro-influencers.” They’ve risen to fame due to their popularity on platforms such as YouTube and Instagram, and their intuition about trends allows them to penetrate niche markets with laser-like precision. The reason many are so influential is that they’re relatable. Unlike the Kardashian types, micro-influencers could be people we know.

However, fraud is sure to follow whenever there’s lots of money and notoriety involved.  

What is influencer marketing fraud? 

Social media celebrity is becoming big business. It seems like everyone and their brother has a monetized YouTube channel or trending Instagram account. With all of the instant celebrity – as well as the bank accounts and benefits that come with it – many people are defrauding their way onto the social media marketing gravy train. 

Popular influencers have a million followers or more, and top influencers have followers numbering in the tens of millions. It’s estimated that in 2023 brands will be spending close to $21.1 billion to get some of that market share, according to the Influencer Marketing Benchmark Report 2023. 

However, fake influencers can deceive companies by purchasing followers to make their accounts look bigger and manipulating social media statistics to entice brands to work with them. Fake influencers take your time and money with little remorse.

Influencer fraud goes beyond bots and fake accounts, which major social media platforms claim to be working hard to clean up. It’s vital that you educate yourself on influencer marketing fraud scams to protect your business from a loss in revenue or, worse, brand reputation.

How to spot a fake influencer 

Even some legitimately popular social media stars unintentionally contribute to the fraud. The nature of social media celebrities, the rise and fall of trendy platforms, and the fleeting nature of fame mean that sometimes a valid number of followers doesn’t necessarily translate to actual engagement. 

Someone might have 3 million subscribers or followers but few who are actively engaged on the platform. Most social media users drift away from platforms after a while, meaning the numbers don’t reflect who’s still around. 

Before paying a social media influencer for posts, take the time to research their content, engagement, history, verification and network.

Original content

The key to success on social media is finding your target audience and providing them with high-quality, original content. Once an influencer finds their “family,” they prefer to engage with them. Look for influencers who ask their audience questions through quick posts or stories. You will also find that they frequently respond to comments and even cater content to meet the main needs of their audience.

Authentic engagement

Look beyond the total number of followers and at how many are engaged. What is the ratio of followers to the number of users the account is following? Is it balanced or fairly even? How many of the followers are from developing countries? There’s a large market for fake accounts and bot farms in these areas. 

Account history

Will Ellis, owner of security research group Privacy Australia, has studied identity theft prevention and recommends looking closely at an influencer’s account history using an analytics tool called Social Blade. He says that if you see a sudden increase in either followers or engagement (but not both) over a short period of time, the influencer might be buying social likes or followers.  

Verification

Social media platforms have various verification methods, such as Instagram’s white-and-blue icon. The point of verification is that the social media company has deemed a verified user to be a real influencer, not a bot. 

While this is the standard method of verifying accounts, don’t take the social media platform’s word for it. Especially if you are working with a micro-influencer, it might not be as easy as looking for that verification check.

Always do your own research. Check the influencer’s bio, look for contact details and see if the influencer has consistent social media accounts. The more active they are online, the easier it will be to correspond and work out project details.

Solid network

Influencers aren’t known for keeping to themselves (at least with their online presence). Seek out influencers who are connected with other well-regarded influencers in their same niche.

You should find photos, videos or comment mentions of industry friends. Plus, once you work with one influencer, you may be able to leverage that partnership as an icebreaker with their colleagues. 

The true cost of influencer fraud 

While it’s estimated that companies will spend billions to purchase some social media street cred, a report by the Federal Trade Commission shows that nearly 100,000 people lost $770 million in 2021 to fraud.

What does that mean for marketers? When you’re paying someone thousands of dollars for a social media post that’s supposed to reach the feeds of 100,000 people and bots make up part of your intended targeted audience, you are losing money. 

You see, the funds involved in user-generated content lead to a sort of attention economy where everyone wants to be a celebrity. In an effort for that viral moment that will get them big-money endorsements and fame, fake influencers are buying followers for as little as $15 per 1,000.

The real fallout for the social media influencer industry is that companies will eventually  stop throwing money at this new brand of “star” if they don’t come up with a way to weed out the rascals. There are plenty of easier ways to waste money than giving it to a YouTube pipsqueak with delusions of grandeur.

Influencer marketing works, but beware of its risks

Despite the risks of fraudulent followers, influencer marketing can be a great way to reach new demographics. Platforms are using AI and other technology to weed out those with fake followings from legitimately influential people. Still, the creator industry needs to step up its efforts to police its own influencers, and brands need to take a critical look at who’s influencing who before they invest in an illusion.

Sam Bocetta contributed to this article. Some source interviews were conducted for a previous version of this article.