Businesses commonly use social media platforms to increase brand and product awareness and drive traffic to their websites. Partnerships with “influencers” can be integral to these efforts — particularly if your company sells consumer goods or services. But how well do you know your influencers? Some may exaggerate their reach or even perpetrate fraud to profit from business marketing and advertising spending. Here’s what you need to know.

Piggybacking on popularity

In general, influencers are individuals who use social media platforms, including Instagram, TikTok, YouTube and Facebook, to engage other users. They typically discuss their interests and make recommendations (which is important for establishing credibility and building an audience), and some are paid to promote certain goods and services. The more followers an influencer has, the more that person can typically charge companies to promote their offerings.

Currently, high-profile influencers have 500,000 to one million (or more) followers. But it can be cost-effective to partner with influencers with many fewer followers if their audience aligns with your business. For example, take a cookware store in Philadelphia. It might give a cooking influencer with 10,000 followers in the metro area a new skillet or pay a flat fee for the influencer to demonstrate the store’s offerings. This partnership could pay off, even if it yields only a dozen new customers for the store.

Look before you leap

There are several ways to screen out influencers who either aren’t worth your money or might actually engage in fraud. For example, legitimate influencers adhere to Federal Trade Commission guidelines. These include disclosing any “material connections,” such as financial or employment incentives, they might have with promoted products and services. If you partner with an influencer who doesn’t follow the law, it could spell legal jeopardy for your business.

Take the time to click on an influencer’s account to look for potential red flags. Also be wary of social media accounts that lack bios and other personal details or contain nonsensical language. And review at least some of an influencer’s comments for generic or suspicious feedback, such as “Nice!” or emojis. Higher-than-expected levels of engagement, including likes and shares, may reassure you. However, these metrics can be manipulated to inflate an influencer’s social media presence. Likewise, don’t rely solely on an influencer’s follower count. Purchased or bot-generated followers are a common form of influencer fraud.

Vetting methods

While illegitimate influencers may use AI tools for dishonest purposes, you can use other AI resources to vet influencers. Examples of budget-friendly social media analytics platforms are HypeAuditor and Impact.com.

Of course, don’t discount “old-fashioned” relationship-building approaches, such as in-person meetings, phone interviews and email conversations. Finally, when you find a good match, work with your attorney to draft a contract that covers such topics as deliverables, disclosures and consequences for fraudulent behavior.

Conclusion

Partnering with influencers can be an effective way to boost your company’s digital marketing efforts, but it may also introduce fraud and compliance risks.

(This is Blog Post #1906)