The ‘Influencer Marketing’ Scam

Considerable attention these days is directed toward “influencer marketing.” My (as yet) unproven theory is that it’s basically all bogus.

It’s certainly true that trusted “influencers” — a term I dislike — can impact buying decisions. There is a lot of data to support that assertion. For example, the following from the 2015 Nielsen Global Trust in Advertising study shows that friends, family and “people we know,” as well as the opinions of other consumers, are the most trusted referral sources:

But what agencies and brands have frequently sought to do is co-opt that trust in the form of product placement or undisclosed sponsored posts or endorsements. In the language of business ethics it’s called a conflict of interest.

Basically influencer marketing involves walking a tightrope, either by trying to get so-called influencers to promote your product without paying them directly or by paying them but typically without clear and explicit disclosure of that fact. That’s because proper disclosure destroys credibility and their capacity to deliver influence.

This is the same MO employed by many native ads, which try as much as possible to look and feel like “content.” Facebook News Feed ads are less “deceptive” while some of the ads in the Yahoo stream are more deceptive in this regard.

These paid but undisclosed conflicts have resulted in myriad problems for brands and influencers with the FTC. The problem is that clear and explicit disclosure, sufficient to alert people to the fact that something is an ad, potentially kills its influence. But being deceptive holds longer-term negative implications for a brand.

According to research from Reuters (2015), “a third or more say they have felt disappointed or deceived after reading an article they later found had been sponsored.” I suspect the numbers would be higher and the negative feelings more intense with individual celebrities and experts. It would feel something more like a betrayal of trust.

I also suspect that if we surveyed 1,000 consumers and asked them whether a paid post or paid endorsement by their favorite celebrity or expert would have influence over a pending purchase decision they would say either “little” or “none.”

Would love for someone to argue with me — the key point being influence after clear disclosure of the paid relationship.

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7 Responses to “The ‘Influencer Marketing’ Scam”

  1. Andy Kuiper says at

    “… clear and explicit disclosure, sufficient to alert people to the fact that something is an ad, potentially kills its influence.”
    — I’d think it diminishes it quite a bit, but in most cases, it shouldn’t ‘kill its influence’. Many are likely influenced to some degree by their favourite ‘celebrity’ (sports star, activist, etc) recommending a service or product.
    Just my thoughts 🙂
    Thanks Greg 🙂

  2. Eric says at

    I agree.

    I do think that a brand/product can get a short term return through a paid endorsement or product placement, but it’s certainly not valuable as a long term strategy.

  3. Greg Sterling says at

    I can envision a scenario where a celebrity or expert clearly embraces the fact that it’s an ad-goes in the opposite direction-and that transparency inoculates the message against the cynicism and that would otherwise happen.

  4. Greg Sterling says at

    I would like to see somebody try something like that and see what occurs.

  5. Larissa says at

    Some celebrities and instagram influencers abide by the unspoken rule that #ad and #sponsored labels should go on posts, and I read last year that some social media influencers are upfront about the fact that the posts marked as ads get lower engagement from their followers. I think that the posts that are ads should be clearly labelled.

  6. Christina says at

    I will see your request for proof of “influence after clear disclosure of paid relationship” and raise you the catch-all darling word of today, “#authentic.”

    Speaking from a millennial perspective, the blurry space of art-as-advertisment is as familiar and non-threatening as a dangling-feet landscape photo or some candy-colored #vanlife lifestyle-porn. Everyone these days has an angle and I’d rather know it up front than feel duped finding out later. 

    In between the “art” (the sunsets, the farmscapes, the hipster avocado ice creams and the couples locked in aerial yoga poses), we see the “ads” (water bottles, work boots, leggings, yogurt cups, essential oils, sneakers, journals, animal crackers, headphones, stoves, gloves, towels etc.) for products that sustain these lifestyles, and we don’t bat an eye. They go together.

    When people we call “influencers” reveal a cross-section of their lives online, it would feel almost disingenuous if we didn’t see their cereal or their sneakers occasionally. Growing up in this culture of product-placement celebrity, we all understand that if you’re a good enough yogi, you’ll not only have a platform to talk about the leggings you prefer, you’ll win a lululemon sponsorship and show us the loot they send you by the boxful — which is total lifestyle #goals.

    In a way, we feel privileged to see these in-between bits of content, as if by knowing the Kardashians eat fast food or Grace Bonney shops at Target, they are showing us the secrets to their lifestyle. They are INCLUDING us. 

    So yes, #ad #sponsored can be clunky, but it’s familiar. It’s not going to scare us away. We know you’re running your online empire however you can and maybe if we play our cards right, if we listen to our wise/sexy online “friends” and buy that brand of headphones they mentioned, we too can catch up with Chrissy Teigen on a beach somewhere and spend our days sipping only the hippest coconut water! (#ad)

    Here’s a profile by the NYT of some lifestyle #vanlife influencers making a living with their niche marketing partnerships. It shows the gritty side of turning your life into “content” too. All around a solid read for anyone interested in this conversation: http://www.newyorker.com/magazine/2017/04/24/vanlife-the-bohemian-social-media-movement

    -C.

  7. Greg Sterling says at

    Not suggesting that brands and products people actually use be concealed or denied. That’s not paid placement. If some “creative” eats Honey Nut Cheerios it’s not a problem (for me) that it’s shown in a video. The problem is when General Mills pays for that placement and it’s not disclosed. And if it’s disclosed, as a basic matter, it probably diminishes the “effectiveness” of that paid placement.

    If someone genuinely loves a product or a movie or a dress, no problem. It’s when they pretend to do so that the problems begin, that it’s “deceptive.”

    As I said I can imagine it working, in a counter-intuitive way, if someone totally embraces their endorsements with total transparency, even gusto. The problem — and the “agreement” (until now) between influencers and brands — is that the product will appear to be a natural part of the person’s life and not a paid placement. I suppose one could disclaim all product appearances as ads, which might work too: “every product appearing in this video is a paid placement.” But such notices put people on guard or cause them to resist; that’s why there’s been hesitation among brands, retailers and agencies in being totally forthcoming about paid endorsements.

    With a few exceptions, most people don’t want their content to be interrupted or infused with ads. Witness ad blocking, ad skipping and so on.

    There are different types of influencer marketing that are more nuanced an indirect and don’t involve a direct manipulation of public perceptions — e.g., giving auto bloggers an opportunity to try a new electric vehicle, giving Instagram food bloggers access to a new restaurant, etc. These types of things are not efforts to disguise an ad as something more “organic.”

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