The Impact of Influencer Marketing Fraud on Brands and Consumers

According to a recent report titled ‘The Influencer Marketing Benchmark Report 2023’ by Influencer Marketing Hub, the influencer marketing sector will reach a value of about $21.1 billion by 2023. Thus, it is safe to state that influencer marketing has taken the top spot in the digital marketing environment, with influencers turning into nothing less than modern-day celebrities. Consequently, marketers today are largely partnering with well-known social personalities with the motive of garnering greater brand attention.

The rise in influencer marketing has, however, led to a corresponding rise in frauds, impacting both brands and consumers alike. In fact, the increase in social media usage due to growing dependency on influencers has blurred the lines between reel and real. Especially with the emergence of bots, Imposters have developed sophisticated techniques to inflate engagement rates and follower numbers in an effort to deceive customers easily. Also, acting influencers with fake followers creating an illusion of fame is another concern that is causing disruptions in the influencer marketing landscape as a whole, making it challenging for both brands and consumers to differentiate between fake and real. For instance, when an influencer gets less than 100 likes and comments on a post despite having thousands of followers, it is a big red flag indicating fake or purchased followers. In addition to bots and ‘ghost’ influencers, genuine influencers are also largely choosing disclosure deceit, providing consumers with partial information and denying them the ability to make educated decisions.

Although there is no indication that these fraudulent activities will disappear from the influencer marketing landscape anytime soon, it is crucial for brands and consumers to navigate their way to authentic and credible content creators. Here AI-powered tools come into the picture, conducting matchmaking considering both brand and influencer profiles and curating the most relevant list of creators with fraud protection. Along with these tools, influencer transparency also holds a crucial place in the influencer marketing ecosystem, offering the audience full disclosure in terms of the nature of content. This, in turn, will benefit the end users as they will obtain access to authentic brand content and modify their buying decisions based on the same.

Influencer Fraud: Its Ripple Effects on Brands and Consumer Trust


Prey to fake influencers: Imagine putting all your efforts into an influencer marketing campaign only to discover that your influencers are plagued with fake followers, rendering your campaign’s reach and impact deceptive and undermining its intended objectives. Over 49% of influencers engage in follower fraud, according to Statista. This data highlights the fact that influencers are increasingly using bots and fake followers to create a false impression of popularity and fool firms into working with them. This ultimately makes social match challenging because it becomes hard to manually identify an appropriate influencer due to inflated engagement and bot audience. Here, influencer transparency comes into play, with influencers completely disclosing the nature of their partnerships, resulting in strong advocacy between the company and the creator. This open transparency ensures that influencer engagement is legitimate and does not mislead consumers.

Loss of revenue: With the growing tendency of influencer marketing frauds, the risk of loss of revenue has also become a significant possibility. Especially with fake influencers pretending to be social media giants with a fake large following and strong engagement rates are able to fool marketers and misuse their marketing budgets, resulting in revenue loss. Offering better transparency and visibility pertaining to creator profiles, AI-based tools aid modern-day firms in efficiently negating challenges posed by the menace of influencer marketing fraud. Instead of relying on personal connections or intuition, these tools employ data to identify potential influencers and examine brand and influencer synergy to ensure that businesses are connected with the right influencer.

Wastage of time and money: There is no denying the fact that running an influencer marketing campaign can be time-consuming and costly endeavor, when executed manually. As a result, this can lead to increased chances of influencer frauds considering that manual operation can make it difficult to spot such misleading activities in-time. Falling prey to such acting influencers not only costs marketers time but also disrupts their marketing budget. Using phishing, bots, and phony followers, fraudulent influencers are causing organizations to lose $300 for every post, according to a study conducted by Influencer Marketing Hub. Thus, in order for brands to stay clear of these pretending to be content creators, it is crucial to resort to technology-powered solutions to gain access to only legitimate and reliable creators.



Blocks access to authentic content: Though bots and fake influencers are significantly disrupting the influencer marketing landscape but the disclosure evasiveness that brands and actual influencers are practicing is largely preventing the end customer from accessing original and reliable content. This limits their capacity to form an accurate impression of the brand and its offerings, which adversely affects their buying decisions. Acting on the need to bridge the gap between consumers and authentic content, ASCI has made disclosure of material connections between brands and influencers mandatory. Whether content is created entirely for the goal of marketing a product or service, or simply contains some branded references or appearances, it has become critical for both businesses and influencers to label it in some manner. This, in turn, will make sure that users are being exposed to credible content and can thus make informed decisions.

Hampers brand loyalty: When consumers come across deceptively represented brand content it not only undermines their trust in the brand but also their commitment to it. This, in turn, ends up creating a conundrum between creators and brands and they indulge in blaming the other while, in reality, the onus lies on both. On the part of creators, it is crucial to follow ASCI guidelines and label the promotional and non-promotional content in order for consumers to identify and distinguish the nature of content. And for brands, it is important to find genuine influencers who can rightly represent their brand.

Data and security concerns: With the rising concerns around user data and security, consumers have become increasingly conscious of the content they choose to engage with. Moreover, as a result of the rise in fake influencers and bots, customer data is increasingly exposed and at risk of exploitation, which is causing users to lose faith in influencers. Here, influencer transparency provides them full disclosure regarding the nature of the content and improved visibility on user data, inculcating brand loyalty and significantly improving brand image.

Cracking Down on Influencer Fraud: Strengthening Trust in Brand-Consumer Relationships

As brands traverse their way through the ever-changing marketing landscape, influencer marketing serves as a light of innovation and potential for organizations. However, frauds have corrupted the influencer marketing space, posing nothing but tons of challenges for brands. Fake influencers and bots, in particular, have made it hard for marketers to effectively reach their target audience and for customers to obtain genuine brand content.

Especially with social media usage being registered as one of the most popular online activities according to Statista, the need for flagging influencer marketing frauds has become vital. In order for brands to get away with fraudulent activities and unlock new milestones, technology-centric tools could be the arsenal that they need. These tools allow marketers to spot fraudulent activities in time, channel their budget in the right direction and save themselves from falling victim to fake followers or bots. Further, breaking beyond the constraints of traditional marketing, these cutting-edge tools also enable brands to find ideal influencers and target favorable reach. Fostering profound relations with the audience, these technologically enabled solutions are rapidly proving to be the ideal approach to combat common influencer marketing frauds.


(The author is Ritesh Ujjwal, Co-founder & CEO of Kofluence, and the views expressed in this article are his own)

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