4 minute read
The Cost of Infuencer Fraud: Are you losing 15% of your budget?
By Kelsey Formost, Director of Content Strategy at Tagger
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It’s no secret that infuencers with profles big and small are guilty of infating their followers and engagement numbers in order to secure coveted brand partnerships.
Until now, brands have been blindly spending their marketing dollars without knowing how much of their efforts were being shown to fake and inactive accounts. So how much is infuencer fraud really costing marketers per year, and more importantly, what can we do to reverse the trend?
A new study by Professor Roberto Cavazos of the Merrik School of Business reports that brands will lose about $1.3 billion this year to infuencer fraud. In an industry that’s projected to spend $8.5 billion this year globally, a $1.3 billion lossor just over 15% of the market- is incredibly signifcant.
But the situation isn’t as dire as you may think: brands can protect themselves from fraud and work to reverse the industry trend by learning more about how infuencers have been scamming the system, and investing in new technology that allows users to measure authenticity as well as engagement.
There are a few overall factors that affect brands’ monetary loss per contract:
The platform on which campaigns are running, the size of an infuencer’s following, and the ability to use technology to measure both the authenticity and the activity level of an infuencer’s followers.
Fake followers and click farms: By the numbers
It’s no shock that paying for likes and followers is a common theme in infuencer fraud. But what may surprise you is that it matters which platform you’re using.
It costs more for an infuencer to buy fake engagement on YouTube than it does on Facebook, Instagram or Twitter, with Twitter being the least expensive to boost.
Paquet-Coulson found that click farm clients pay an average of $49 for every 1000 YouTube followers, $34 for 1000 Facebook followers, $16 for Instagram, and fnally $15 for Twitter. Therefore, with it being more diffcult and more expensive to buy followers and engagement on YouTube and Facebook, you’re less likely to see fraud there than on Instagram or Twitter.
Though most of these click farms are located overseas, technology now exists that can fag large infuxes of activity in countries outside the infuencer’s country of origin. The ability to measure engagement and follower activity behind the scenes is going to be one of the most crucial investments brands can make in the coming year.
Inactive profles are just as bad as fake ones
Even real followers can cause trouble when audience inactivity is considered. According to a study covered by Business Insider, about 30% of social media accounts are claimed to be inactive, meaning, the account exists and belongs to a real person, but that person is no longer using or interacting with their social media profle.
In a study done for Traackr on the future of social media infuence, Digital analyst Brian Solis says, ‘‘Many infuencers have no access to 90% of their audience simply because it no longer uses the social network where they were followed. This doesn’t stop them from touting millions of followers, who will, of course, never see your content.’’
Fewer followers = Less fraud
It’s important to note that a brand’s projected loss to fraud goes down the fewer followers an infuencer has. If a profle has over 1M followers, the cost of fraud may actually be higher than the cost of the paid post. But when it comes to infuencers with 100K followers or less, the likelihood of fraud decreases. If brands are looking to protect themselves from fraud and get more bang for their proverbial buck, they should focus on building ongoing relationships with infuencers who have smaller audience sizes.
Similarly, using an infuencer marketing platform that allows brands to hone in on incredibly specifc affnities sharply increases the odds of a viewer authentically connecting to content, branded or otherwise. Smaller audience numbers can mean a more specifc (and therefore, more valuable) pool of data.
Protect yourself from fraud: Invest in the right technology
With the explosive rate of growth of the infuencer marketing industry in the last year alone, it’s imperative that brands and marketers alike invest in the most effective, up-to-date technology. Special attention should be paid to a platform’s ability to measure an infuencer’s authenticity; both the authenticity of their followers and their engagement metrics.
The bottom line:
Every industry must combat fraud. In fact, this year the projected losses from ad fraud will cost marketers almost 4.5x as much as losses from infuencer marketing fraud.
What really matters is how brands and marketers use available technology to guard against fraud, and invest in ongoing relationships that cultivate trust.
