Brands pay billions of dollars globally a year to promote their products through influencers who have sizable followings on top social media sites.
But, to appear more influential than they actually are, influencers can buy fake followers and pay for bots to like or comment on their posts. That fraudulent activity is costing advertisers about $1 billion this year, but could grow to about $1.5 billion next year.
Researchers with CHEQ, a cybersecurity company focused on the digital media space, 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-Influencer (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.