The $744 M Influencer Marketing Scam

All brands were doing influencer marketing

The lowest hanging marketing fruit, outside Google and Facebook Ads, seemed to be influencer marketing. Everyone was doing it. It seemed easy enough — you just pay an influencer in money or in free products to act as an ambassador for your brand.

An automated platform to scale was a natural step

I signed up with a platform that promised to help me scale, automate and track the results of this marketing initiative — much like you would with Google Ads or Facebook Ads.

Two months in — something isn’t right?

Two months into our ambassador initiative, I looked at the results of our influencer marketing. Something was missing.

  • What was going on?
  • Were we going at it the wrong way?
  • Had we collaborated with the wrong ambassadors and ended up with a bad fit for our brand?

An anonymous study to all of our influencers

A cornerstone of our business is to dig into and affect our suppliers’ production chain to ensure that they do everything sustainably. So with the same scrutiny that I use to evaluate our suppliers, I set out to investigate our influencer marketing efforts.

The questions asked to our influencers

Were we dealing with inflated numbers from our ambassadors?

To humor my hunch, I shared an anonymous survey with all of the (then) 4012 ambassadors on our platform, asking several innocuous questions about their take on what they do. But I also included some sharp questions about the number of followers they have, engagement and shady services.

Most influencers are new into the industry. This reflects the youngness of the marketing channel.
36% state that they never used any service to increase popularity or engagement.

A jarring quote from one of our ambassadors stuck with me:

“I wanted to try a bot service because now everyone uses bots and I wanted to see with my own eyes how good it was.”

Adding to the survey answers provided under the veil of anonymity, I concluded that either we spotted a serious glossy scam, far bigger than we could imagine, or we were just terrible at execution.

1.84 M influencer accounts scanned

I researched the market size again, and according to Statista, it should be worth $1.7 BN in 2019. Growth rates year on year around 35%.

The results from the global study

$744 M is at risk on a global level. The new and “true” market cap of Influencer Marketing can be €956 M instead of $1.7 Bn.
The graph shows the net amount of users in millions per country when bots and MassFollowers have been taken out.
Engagement Pods are widespread among influencers who have between 1K and 20K followers. They can easily boost the engagement rate due to that each new comment and like will affect the ER-rate from Instagram.
Auto likes is one popular method of Instagram engagement growth. Loads of services and apps offer a certain amount of likes on every influencer’s post. These likes come from bot accounts.
  • 1M+ followers — 0.3%
  • 100К — 1M — 9.5%
  • 20К — 100К — 12.2%
  • 5К — 20К — 41.6%
  • 1К — 5К — 36.4%

Key delights of the global study

  • Instagrams monthly active users data might be overrated by approximately 45%
  • Net market size 2019: $956 M, a 45% drop from the most conservative report
  • Loads of brands pour serious money down the drain hunting engagement and likes
  • The shiniest toy in the store, micro-influencers are the ones cheating the system the most.

What did we do?

First, I considered pulling the plug from our ambassador program. But I was still convinced that influencer marketing is a necessary tool.

No more free products

Adding to that, I don’t give away any free stuff, which is common practice to do within influencer marketing.

So, what did I learn from this?

If we want to make it easier for engaged brands to find the qualitative ambassadors in the bot-haystack, we need to cease being impressed by mass-followings and engagement rates.

Our new influencer strategy at a glance

  • Don’t trust any data.
  • Influencers can be great for sales and possibly for brand positioning. But the effect is difficult to measure without direct results generated by the ambassadors. Trust only sales.
  • Finally, don’t be afraid to ask your ambassadors to pay a certain amount for your products. This way, you know that they are actually interested in your brand and what your company stands for. And, not to forget, you are slowing down the mindless consumption train.

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