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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4 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.

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