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BizReport : Social Marketing : July 29, 2019

Study: 'Finfluencers' costing brands billions

You've heard of influencers but how about 'finfluencers' - i.e. Fake Influencers? It's a relatively new problem for brands in the social space, but one that is already costing billions. According to new data out from CHEQ, about 15% of influencer ad dollars are being spent of fake followers, and it could cost marketers up to $2 billion this year.

by Kristina Knight

Social media has become an integral part of branded ad campaigns in a relatively short span of time, and with its quick growth, influencer marketing has also become a heavy hitter. Brands quickly found that their products, presented by a social media user that other people trusted to find new products and brands for them, could reach many more people than more traditional ad campaigns.

The problem? Scammers invaded, promising even bigger follower counts for social media users, but instead of those followers being human, most were bots or click farms.

This year, fake influencers - bots and click farms - are expected to cost businesses about $1 billion, but could grow to about $1.5 billion next year. Researchers with CHEQ found that the cost of fraud associated with influencer campaigns is more than the cost of the actual post, story, or ad. According to their data the cost of a Mega-Influencer Post (those with 1-2 million followers) averages $250,000. The cost of fraud associated with these posts averages $375,000.

Smaller influencers do cost brands less. Researchers found that Macro-Influcer (those with 100,000 to 1 million followers) posts cost brands about $25,000 on average; fraud associated with these posts costs $3750.
Despite the costs associated with influencer marketing - and the fraud growing in the segment - marketers continue to push ad spend toward it. According to CHEQ data most brand marketers believe social media/influencer marketing is 'highly strategic' (71%) and 55% plan to invest more budget dollars into the sector.

"In every aspect of digital marketing, there has always been a way for people to buy or fake the numbers," said CHEQ founder and CEO Guy Tytunovich. "This has been the case with other more advanced deceptions - such as ad fraud which costs marketers at least 20-times the costs of fake influencer marketing. It is important at this early stage, when best practices are being formed, that everyone in the online influencer marketing ecosystem, including influencers, technology providers, platforms, and brands seek to mitigate the early problems and deliver the authenticity and trust we all want to see."

More data from CHEQ's Fake Influencer Marketing in 2019 report can be accessed here

Tags: advertising, CHEQ, ecommerce, fake influencers, influencer marketing, mobile marketing, social marketing

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