The spotlight on influencer marketing has become glaring this year. With more companies investing money and technology into what they see as an effective yet emerging practice for brands to engage customers, what’s also more prominent are hard questions about measurement, the absence of standards—and fraud.
I attended the Influencer Fraudenomics Summit this month, organized and presented by Sylo, an evaluation and performance analytics solution. Attendees included folks from agencies, brands, creators, marketing platforms and industry organizations. The event was a one-day gathering in New York to bring the industry together to build awareness on influencer fraud and host a dialogue about solving it.
For me, influencer marketing is a transformational component in developing modern marketing strategies, so here are my takeaways:
1/There’s real money on the table
The day started off with Economist Robert Cavazos of the University of Baltimore’s Merrick School of Business speaking from his study that found $1.3b in online spending waste this past year alone. He said it’s like a 15% tax on whatever you do in influencer marketing. In addition to the blatant fraud of inflated follower counts and abuses in automation and publishing, he cited indirect costs, through erosion of trust and impact on brands.
2/The culprit is in the dark
Professor Cavazos says the cause is the “Principal-Agent Problem,” a dynamic in which you have a principal engaging an agent on your behalf and making decisions for you. The problem comes when you don’t know what he or she is doing. And it’s true that in this emerging area, with its complicated mix of platforms, players, competing data architectures and lack of norms, clients and agencies often don’t know what exactly is being executed and how.
3/There is consensus on some foundational solutions
Across the conversations, these ideas kept popping up, many of which feel like they can be tackled in the short-term:
- Common industry standards
- Common industry contracts (see below)
- Certification of influencers
- Verification by a third party – because self-reporting has not traditionally worked
My favorite panel was on contracts, hosted by Leah Marshall, Influencer Marketing at the ANA. One participant, Kieley Taylor of Group M, was detailed. “There are holes in contracts,” Taylor shared, where all the assumptions are made. The best offense, she counseled is a good defense. On her checklist for an influencer contract:
- Where the hashtag #ad appears (primarily a US concern)
- Considerations on where/how the influencers built their audiences. Recommendation is to use an unbiased verification partner to help assess.
- Cost basis – are you paying for content volume, video views? The range of costs and the value still vary wildly today.
- How will validation on performance be decided?
- Content Approvals – how will they work? how many revisions?
- Rights negotiation for additional uses (e.g., TV, OOH). Do they have rights for music etc.
- Competitive representation – the week/ month after, can s/he work with a competitor
- Vetted network and conduits in the space – what if a middle-man involved goes out of business?
- Bonus: What if an aspiring influencer fakes that it has an #ad deal with your brand? Consider cease-and-desist as an option.
4/The use cases are increasingly more varied
While influencer marketing may have roots in direct to consumer and categories such as retail, fashion, food and hospitality, the world for it is growing and the outcomes it can support are evolving. B2B players obviously have different needs and plays for this practice, with companies such as SAP deploying influencers with expertise, rather than folks to sell products. My colleague Brian Solis’ report Influence 2.0 with Traakr cites expansion of influencer marketing beyond increasing awareness and improving brand advocacy to reputation management and even improve customer satisfaction.
5/Several big brands are deep in the game
Casey DePalma McCartney of Unilever shared some success stories and challenges they’ve had at Unilever, where global acts as a center of excellence for the brands, providing the point of view and strategy to the markets of what the space is, this is the way you can use it, and sharing the best practices.
Here, in this video clip, McCartney and summit emceee David Beebe talk about how the current state of influencer marketing reporting is like grading your own homework and how critical it is for independent third party measurement for the industry to grow—and the need for platforms to come together to help solve it.
6/The heroes are amongst us
While there seems to be a consensus that it will take a mix of industry partners to turn a corner on fraud, I didn’t actually sense any player standing up to put on the cape. I found a bit of finger pointing, mostly at the publishing platforms, and an implicit expectation that paid media firms would be the best suited to lead the solution. Media tends to be the standard bearer, went the argument, because media is more quantitative, even if that’s not in our best interest in a healthy ecosystem. This also doesn’t bode with me as a good idea long-term, since influencer marketing continues to extend far beyond the narrow paid use cases, especially with more B2B companies entering the game.
What’s also unclear is where the industry organizations are in this. Last I checked, various combinations of the 4A’s, Media Rating Council, Internet Advertising Bureau and the Word of Mouth Marketing Association drove standards in display, social and mobile advertising. There could be a working group or two out there.
“Nothing changes until a clients vote with their dollars” said Taylor. “Everyone else can help drive but if advertisers keep rewarding unverified or unaccountable behavior, the actual content creators do not make changes.” The challenge with industry groups leading the standards is some of them represent the entirety of the industry, so they have a lot of voices to account for; the path of expediency lies heavily on the advertiser. So for now, the best practices and standards set by clients such as Unilever or agencies like GroupM, can be independently used, duplicated, adapted and scaled.
Brett Garfinkel, Co-Founder & Co-CEO of Sylo, called on brands to to survey the landscape, vet an independent, unbiased third party to measure and verify. “Treat the space and influencers as you have done with all other publishers and ad networks,” Garfinkel says. “Regulation should begin now because the capabilities to update best practices are available to do so. My question back to all brand marketers out there is: what are we waiting for?”