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            Social media Influencers: How they're changing the marketplace and tips to avoid fraud

            By Better Business Bureau. May 13, 2020.

            (Getty)

             

            The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.


            BBB thanks Google for their sponsorship of this series.

            The digital world today provides windows into the lives of others and far-away places that were once cut off to the average person. Want to see the world? You can follow world travelers who have captured images of beaches, sunsets, tavernas and hotels. Interested in fashion tips? Jump online to find people sharing tips for style and beautification. Interested in learning a new skill, such as home remodeling, scrapbooking, or auto repair? Go online to find the right teacher. And that’s not it. You can follow athletes of all stripes engaging in jaw-dropping action or experience the moments of joy that come with children unboxing a brand-new toy with their parents or meeting a new sibling or pet. And if you’re simply bored, you can pick up your smartphone to watch a brand-new video from your favorite entertainer.


            In this article, we’ll explore this marketplace phenomenon of social media influencers and content creators. We’ll highlight some of the well-known influencers on multiple platforms, and alert you to potentially fraudulent practices you should watch out for.

            Who are social media influencers and content creators? Where can I find them?  
            Younger consumers increasingly are spending their free time on social media platforms such as Instagram, YouTube, Facebook, TikTok, Twitter, and Snapchat. Influencers and content creators are social media users who have leveraged their personalities, travels, stories, and/or talents to acquire great numbers of online followers, many of whom are young people. [1]  And as influencers extend their reach across the digital world, brands are eager to gain access to the new consumers who follow them.

             

            What are the opportunities? 
            Big brands and advertisers covet the impact influencers have over their followers, and they engage with influencers hoping to tap into their reach and appearance of authenticity. By partnering with an influencer a brand can promote its product and service in a way that doesn’t look like traditional advertising. Notably, Google searches for the term “influencer marketing” have grown 1500% over the past three years. [2]


            Many content creators and influencers partner with brands to promote products and services in their video streams and social media feeds. Others use their influence to promote their own businesses to their followers and subscribers. Major social media companies have also built new features into their platforms that content creators and influencers use to make money off of their feeds. Recently, small and up-and-coming businesses have also reached out to influencers to gain new, young customers. 

             

            Authenticity offers value
            What makes a particular influencer or content creator valuable to a brand or advertiser is their authenticity. Influencers and content creators build followings of people who share their interests or personal passions. This is in contrast to traditional advertising, native advertising, or even interest-based advertising. With an influencer, a consumer feels they are interacting with a real person in their life, like a close friend or family member. Advertisers aim to harness this unique relationship between an influencer and his/her followers. Indeed, tapping into this authenticity has become a major marketing strategy for reaching Generation Z, roughly described as individuals born after 1996 to 2015 who are known for growing up in the digital world. [3] Brands are hungry to reach this generation, especially through tapping into Instagram influencers and YouTube content creators. 

             


            The big players
            Some famous social media influencers have obtained millions of followers. On YouTube, Swedish content creator Felix Arvid Ulf Kjellberg, who goes by PewDiePie, is known for video game tips, comedy, and commentary on meme culture. His popular content on YouTube allowed him to amass 101 million followers. Dude Perfect, a sports entertainment group, follows behind with 46.7 million followers. Top influencers and content creators on YouTube include Brazilian video blogger Felipe Neto and “kidfluencer” Stacy Nastya.


            Top Instagram accounts feature celebrities, athletes, and artists such as Cristiano Ronaldo, Beyoncé, and Selena Gomez, but also National Geographic and Nike, whose followers number in the millions. Popular influencers on Snapchat include American hip hop producer DJ Khaled and fashion model Jelena Noura “Gigi” Hadid. On Twitter, popular accounts include individuals with backgrounds and expertise as diverse as Katy Perry, Lebron James, Bill Gates, President Donald Trump, Justin Bieber, and former President Barack Obama. 

             


            The medium and small players
            Mid-tier influencers have followings that range from roughly 50,000 to 500,000.[4]   These influencers include individuals with a vast range of interests. Besides world travelers, fashion experts, and food bloggers, mid-tier influencers are also comprised of personalities that focus on parenting, do-it-yourself, emerging technology, religion, and journalism. With audiences from a variety of educational, cultural, and economic backgrounds, these influencers are often viewed as more trustworthy and relatable than larger players because their content appears more authentic. [5] 

             


            New international platforms for influencers
            Influencers are making their mark on Instagram, YouTube, Snapchat and other platforms, but new players are emerging in our interconnected world. TikTok, based in China, is an app that encourages users to create short-form video content. Recently, companies such as Chipotle have partnered with TikTok and some of its influencers in order to reach young consumers. TikTok was the third most downloaded app in the first quarter of 2019 and has recently surpassed Instagram and Facebook in downloads on the Google Play Store. As China increases its global digital footprint, the potential for new content creators on emerging platforms continues to grow. 

             


            Watching out for fraud
            Anytime new platforms arise and bring opportunities to generate revenue, fraud is likely to follow. The Fyre Festival – a failed event that cost investors $26 million and is the subject of ongoing lawsuits -- has become emblematic for fraud in the influencer space. [6]  This event, the subject of popular Netflix and Hulu documentaries, was known for planners using influencers to promote a luxury Bahamas music festival on Facebook and Instagram. This resulted in partygoers travelling overseas to the event, only to learn the festival was cancelled; they paid thousands of dollars to stay in disaster-relief tents without access to plumbing, running water, or hot food. 


            Additionally, some influencers have also used bots to artificially inflate followers, and some companies have profited by selling fake followers to influencers. Other influencers have knowingly promoted fake or faulty products. 


            Below are a few tips to help consumers avoid fraud, and help businesses be on the lookout for untrustworthy influencer partners:
             • Be skeptical about exaggerated claims for a particular product, trip, or service.
             • Be aware of high spikes in follower count for an influencer or content creator.
             • Look in the comments section for a high number of generic or irrelevant comments – comments that only contain emojis or one or two words, or don’t appear to comment on the content of the posting, for example.
             • Keep an eye out for followers from distant places; if an influencer based in Virginia has a large number of commentators from Asia or Africa it is possible they may be artificial.
             • Look for verification marks from platforms – some social media companies will verify influencers with a special marker if they appear to have a large number of followers. For example, Instagram has a blue checkmark for accounts it has verified for a public figure, celebrity, or brand. 

             


            Rules of the road: Influencers must disclose their relationships
            It’s critical for influencers and the businesses that partner with them to understand the laws regarding  truth in advertising, disclosure, and fairness. While the legal landscape is still emerging, there are legal rules for using hashtags, curating comments, adding followers, and announcing relationships with brands. It’s important for both influencers and their business partners to look closely at these requirements to make sure they are following the law. Our next article in this series will do a deeper dive into the some of the laws that impact influencers. 


            This article is the first in a series about social media influencers. All articles can be found at BBB.org/Ad-Truth and were created with financial support provided by Google. 

             

            [1] 71% of Instagram users are under 35: https://influencermarketinghub.com/influencer-marketing-statistics/  Distribution of Instagram influencers creating sponsored posts: 31% are 18-24, 54% are 25-24: https://www.statista.com/statistics/893733/share-influencers-creating-sponsored-posts-by-age/

            [2] https://influencermarketinghub.com/influencer-marketing-2019-benchmark-report/, see also https://influencermarketinghub.com/Influencer_Marketing_Benchmark_Report_2020.pdf

            [3] https://www.salesforce.com/blog/2017/10/how-millennials-and-gen-z-are-different.html

            [4] https://www.wsj.com/articles/online-influencers-tell-you-what-to-buy-advertisers-wonder-whos-listening-11571594003, see also  https://medium.com/socialbook/a-quick-guide-to-starting-your-first-influencer-marketing-campaign-598bebaf4d54

            [5] https://www.digitalinformationworld.com/2019/11/influencers-are-more-trusted-than-celebrities-as-brand-spokespeople.html, see also https://adage.com/article/wp-engine/gen-z-doesnt-want-buy-your-brand-they-want-join-it/2163281, see also, https://www.ceotodaymagazine.com/2019/11/real-life-in-the-digital-world-gen-zs-search-for-authenticity/

            [6] https://www.cnbc.com/2019/08/18/how-fyre-festivals-organizer-scammed-investors-out-of-26-million.html, see also https://www.rollingstone.com/music/music-news/fyre-festival-14-lawsuits-talent-agencies-927897/

             

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