Fake social media influencers will cost companies $1.3 billion in 2019

Want to start a career as an influencer? All you need is a pretty face, beautiful body, and a willingness to game the system, according to a new report.

As brands are increasingly throwing money into the social media market, wannabe influencers are getting creative to make themselves attractive to companies. Individuals with a high follower count on platforms like Instagram, YouTube, or TikTok can command tens of thousands of dollars for their promise to spread a brand’s message to their viewers.

A new study from the University of Baltimore, in conjunction with ad-verification company CHEQ, suggests that the financial incentive has inspired up to 50 percent of paid influencers to fake their content or metrics.

There are a number of tactics that social media hopefuls use to boost their desirability. Perception is everything, and—similar to a conventional workplace—an influencer’s CV can mean the difference between landing a high profile gig or losing out. Embodying the concept of faking it until they make it, hoardes of individuals pay for their own lavish trips or expensive swag, and tag the accompanying posts with #ad. Each keeps their fingers crossed that the hashtag will convince others that they’ve been paid to make that content.

On top of that, nearly half of all influencers inflate their follower count. According to the study, followers can be bought for $49 for 1000 on YouTube, the going rate for Facebook is $34 for 1000, and the same amount of Instagram devotees can be picked up for as little as $16. There is also the option to purchase automation software to follow and unfollow influencers automatically in order to secure a net increase in followers.

Robert Cavazos, the University of Baltimore economist who wrote the report, surveyed 10,000 influencers and found that at least 15 percent of their collective followers were fake.

“Influencer marketing is an exciting and fast-growing sector, but the amount of fraud and potential for harm in the sector is already highly significant,” he says. “In any transaction across the economy, efficiency and profits are underpinned by trust. While many initiatives are being put in place with a strong recognition of the dangers of a few bad actors, trust must continue to be embedded, otherwise longer term we could see a decrease in revenues, falling consumer engagement, or brands choosing not to run campaigns.”

It turns out that big brands are not great at spotting which individuals have fudged their numbers. A separate study conducted in 2018 by influencer marketing measurements firm Points North Group found that of the influencers hired by Ritz Carlton, 78 percent of their followers weren’t real people. L’Occitane has been duped too: 39 percent of its influencers’ followers were fake.

CHEQ’s research suggests that lying influencers will directly cost brands $1.3 billion this year. Indirect costs, which include erosion of trust and the impact of campaigns, are likely to bring longer-term losses. Left unchecked, the study says, the level of fraud is expected to rise, costing the industry $1.5 billion by 2020.

“In every aspect of digital marketing, there has always been a way for people to buy or fake the numbers,” says CHEQ founder and CEO Guy Tytunovich. “This has been the case with other more advanced deceptions such as ad fraud, which costs marketers at least 20-times the costs of fake influencer marketing. It is important at this early stage, when best practices are being formed, that everyone in the online influencer marketing ecosystem—including influencers, technology providers, platforms, and brands—seek to mitigate the early problems and deliver the authenticity and trust we all want to see.”

Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSays