Fake Influencers Can Cost Companies Millions of Dollars

April 12, 2019

By 2020, experts estimate that companies could pay social media influencers as much as $10 billion annually to market products online. These Internet personalities leverage their enormous followings on platforms like Instagram to earn big money through sponsored content. For instance, last year a British fashion influencer named Jess worked with 22 brands, charging $1,000 for every sponsored post that went out to her more than 230,000 Instagram followers.

But while the money that marketers paid Jess was real, the so-called influencer’s huge audience was unfortunately fake. 96 percent of her Instagram followers were bots, pieces of software designed to automatically engage with social media content. Companies can often spot influencers who purchase fake followers simply by looking at the number of “likes” they receive compared to their follower count. If a person has hundreds of thousands of followers but only garners a few likes per post, that account is probably powered by bots. However, bots that can actually engage with posts are much harder to spot. Jess apparently paid $2 for every 1,000 likes, shares, or comments she received, generating a pretty decent return on her investment until she got caught.

In order to identify imposters before they get sponsored, the startup Like-Wise has built a database of tens of millions of social media accounts associated with fake engagement. The company then uses machine learning to cross-reference these fraudulent profiles with the followings of influencers. Since launching in January, Like-Wise has conducted influencer audits for major clients like Amazon, Tik Tok, Disney, and more. For the most part, though, the startup’s clientele comes from the fashion industry where fake influencers like Jess can flourish.

Questions:

  1. How can fraudulent social media influencers potentially cost companies millions of dollars?
  2. Why do you think fake influencers are more likely to flourish in the fashion world rather than other industries?

Source: Hayden Field, “’Influencer Fraud’ Costs Companies Millions of Dollars. An AI-Powered Tool Can Now Show Who Paid to Boost Their Engagement,” Entrepreneur, April 4, 2019.

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