Fraud Finds Its Way To Influencer Marketing

By Mike Gasbara On Oct 18, 2019

Influencer Marketing has undoubtedly become an essential part of the Marketing mix for advertisers, with the industry on track to hit $10 billion in ad spend by 2020. But the industry is also at a “sink or swim” moment due to the issue of fraud. Roughly one year ago, Unilever’s former CMO Keith Weed called on the Influencer Marketing industry to clean up, and social platforms continue to delete massive amounts of fraudulent bot accounts in an effort to combat the problem. But is this a long-term solution?

Proactive Fraud Detection Solutions

Influencer Marketing platforms like CreatorIQ are taking matters into their own hands and using AI technology to identify the telltale signs of fraud. One example the company found is when audiences severely over-indexing in click farm hotbeds, like Brazil, Bangladesh or India.

“Companies are pouring money into Influencer Marketing, thinking that they are connecting with real people and not Russian bots,” said Anders Ankarlid, CEO and Co-founder of A Good Company. “In reality, they are pouring money down the drain and giving away free products to someone who acquired a mass-following overnight.”

A recent study from CreatorIQ showed that on average, 1.6% of most US-based creators’ audiences are in Brazil, while creators who purchased fake followers averages are more than double the norm at 3.6 percent.

Additionally, rapid follower growth without a commensurate bump in total engagements is another telltale sign of follower fraud. Meaning a creator’s engagement rate should track with a velocity on par with a creator’s audience growth.

For example, John Schaech’s 384,000 Twitter followers (see chart) may look tempting for a brand looking to work with rising inﬂuencers, but an audit using the CreatorIQ fraud detection toolkit uncovers an unusual spike in follower count in April and May 2017 (41% growth), and then again in May and June (60%). These massive increases in follower counts were not matched by a corresponding increase in engagement. In fact, substantial drops in engagement rate occurred during the same period.

These are the type of proactive fraud detection solutions that will be necessary to ensure advertisers that their dollars are being well spent. And as influencers begin to migrate off social and onto additional platforms like TV, addressing industry problems this are what the emerging media sector needs to prove its maturation. It’s also probably why consumer goods giant Unilever invested in CreatorIQ.