Influencer-endorsed marketing is a new trend among brands looking to attract and convert the rich social media customer base. In fact, the amount of money businesses spend on such endorsement are predicted to hit $10 billion worldwide this year.
But like they do with any other hot stuff that proves lucrative in the ecommerce niche, fraudsters are already interrupting business and taking advantage of innocent merchants. Influencer scam on social media is now eating up billions of dollars from business owners struggling to grow in a challenging market.
So how can a business owner separate the real influencers from the fakes? We’ll learn that in a few. First, let’s understand how influencer fraud works.
Influencer Scam: How it Works
Influencer advertising is when a company enters a deal with well-known social-media personality to promote their brand to an audience in exchange for a fee. However, sometimes the crowd or prospects paid for are fake!
Influencer scam is when the personality fakes their crowd size, engagement levels, (or does both) to entice marketing deals. Some fraudsters go as far as creating fake bot-guided influencer social media accounts with automatic profile-updating and human-interaction capabilities.
Brands that open talks with social media personalities directly are at a high risk of landing a false deal.
Influencer Scam Can Threaten to Throw You Out Of Business
Spending in the clouds for influencer endorsements can be a tricky move that can hinder cashflow, affect business revenue and lead to merchant account shutdowns, especially if the deal was a rip-off.
Such influencers can cause even more trouble when;
- They push to sell items at throw-away prices to attract more sponsorships in the future
- They make false claims to their crowd about your service or product.
Careless sales can affect ROI, while deceitful claims can lead to a pile of chargebacks, which is not good for business.
How to Detect and Avoid Influencer Fraud
- Be curios. Do not trust any influencer until you have verified their authenticity. Go the extra mile. Request more proof before you enter a deal. Inspect their relevance to your company, and to your current campaign—don’t just go for anyone!
- Look in the right place. A few agencies are already dedicated to ensuring businesses meet the right social media influencer for their campaigns. Platforms like Hashtagpaid.com vet and verify real influencers and link them to brands.
- Set crystal clear terms. Double-check your contract. Make sure it holds the influencer responsible if they don’t achieve what you paid for. Add protective measures like a cancellation clause or a refund in case you do not get a return on investment.
- Use upcoming influencers. Smaller influencers are easier to deal with in terms of costs and striking agreements. Also, onboarding one can be excellent in terms of ROI. Start small, and remember; you do not need mega-celebs to promote your brand.
Lastly, don’t throw all your revenue on social media endorsement campaigns hoping for the best results. Set a separate budget for influencer marketing.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk credit card processing partner in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.