A bad influence: The rise of influencer fraud on e-commerce

business

Photo Credit: Kalawin /iStock Photo

It goes without saying that the face of e-commerce marketing has changed beyond all recognition in recent years.  Although many of these changes have been down to advances in technology, one major change has a distinctly human face – that of influencer marketing.  Far from being a modern innovation, influencer marketing has been around almost from the first moment that we started selling products.  Characters such as The Marlborough Man, Fatty Arbuckle and Aunt Jemima are just a few examples of influencer marketing in the early to mid 1900s.

The digital face of influencer marketing

Influencer marketing may not be new but, it has grown exponentially in terms of aggression and importance in the last decade as digital transformation took over and, brands began spending millions on securing the right name – and face – for their campaigns.  In 2019, social media platform, Instagram, introduced its new checkout feature which takes viewers straight from a picture or post to the e-commerce site.  A game changer for social media, this meant that users could view the post, visit the site and buy the product – all within just a few clicks.  This one new feature sent e-commerce into a frenzy as brands searched out influencers to take advantage of this new path to sales.

Celebrities including Alex Rodriguez, Sofia Vergara and the omnipresent Kardashians are just a few examples of famous names being used to endorse a product or brand in today’s market.  The usual way that influencer marketing works for e-commerce is that a brand will hire an influencer to endorse a specific product.  The influencer will then publish seemingly organic posts to their followers which will include a mention or hashtag pointing toward the product being endorsed.  The idea, of course, is that followers of the influencer will trust and value their recommendations and, therefore, buy the product.

For a while, it seemed like a brand without an influencer was like a car without an engine then, in early 2019, the tide began to turn.

Last February, the Advertising Standards Authority (ASA) forced the removal of Instagram posts by blogger and influencer Sarah Willox Knott.

Working on behalf of Phenergan Night Time tablets, Sarah’s post claimed that she had solved her sleep issues with the help of the brand’s tablets – which directly contravened a law preventing the use of healthcare professionals or celebrities in endorsing medicines.

Sarah is by no means alone in this – Katie Price, Lauren Goodger and Georgia Harrison have all had posts banned due to them being ruled as misleading.

The rise of influencer fraud

The above cases are anything but isolated. In 2019, influencer fraud became a thing, leading to authorities such as ASA to call for a crackdown on misleading posts by social media influencers. One of the biggest concerns was that followers may not realise that what they’re reading is an advert rather than a genuine, personal post by the influencer.

In a somewhat optimistic move, the Competition and Markets Authority (CMA) introduced the #ads hashtag for use by influencers to make it clear that they are being paid to endorse the product mentioned in their posts.  Unsurprisingly, this has had limited success.

Instagram also took up the mantle of combating influencer fraud in May 2019 when the removal of likes and comments of users from third party apps saw fake influencer rates decline from 1.7% to 1% on many accounts with unauthentic audiences.

However, marketing measurement firm Instascreener reported that, in no time at all, the numbers were on the rise again as influencers found new ways to circumvent the rules.

This year, it’s estimated that the influencer marketing industry will generate up to $10 billion, with top level influencers being paid in excess of $100,000 for their services for a brand.  Footballer Cristiano Ronaldo works with brands such as Nike and Herbalife and, reportedly, earns $750,000 for each sponsored post.

With this kind of cash up for grabs, it’s easy to see why the life of an influencer is such an attractive one for so many – and considered something to aspire to.  It’s also easy to understand why we’re now seeing increased calls for regulation.

The future of influencer marketing in e-commerce

It’s almost certain that we’re going to be seeing increased guidelines in place in terms of transparency, we’re unlikely to see an end of influencer marketing anytime soon.  Instead, it’s thought that a number of changes are on the horizon for this lucrative method of marketing.  These may include:

Full transparency

Moving forward, influencers will be required to make it crystal clear that they are being paid to endorse a particular product or service – and, this will need to be stated long before the reader reaches the click through or call to action.  This will, in all likelihood, take the form of the ‘sponsored post’ banner seen on social media advertising.

A wider role

In the future, influencers will need to work harder for their money.  An increase in transparency means that the influencer will no longer be able to get away with firing off a post with a hashtag or Instagram e-commerce link to fulfil their obligations.

Current thinking is that tomorrow’s influencer will need to take the form of a brand ambassador which will mean working with the brand more closely and, increasing engagement with followers including answering questions about the product or service being endorsed.

Tech’ing influence to the next level

As e-commerce continues to dominate, more and more brands will be moving to agile commerce software suites in order to integrate shopping, product information, customer activity, data management and customer relationships.

Common sense tells us that this technology will be extended to make the influencer an integral part of the entire process – essentially, making the influencer’s identity an extension of the product or service in order to establish trust.

In a world where fashionistas and TV personalities are more influential than politicians, the reign of the influencer is far from over but, we can expect to see a new breed emerge as we move into this new decade.


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