Transparency is a growing trend in many industries and sectors. However, when it comes to influencer marketing, it is more than a trend. That’s because it is the driving force behind measuring campaign effectiveness, controlling costs, and ensuring that influencers are meeting brands’ expectations.
Influencer marketing is the fastest-growing online acquisition channel. It is becoming more popular among brands that want to effectively build their credibility and reputation. In fact, marketers across various industries – including food & beverage, retail, CPG, and media – revealed that 86% used the growing acquisition channel in 2017. Of them, 92% found it effective.
Meanwhile, the same survey found that 30% of marketers expect to spend between $25,000 and $50,000 for each influencer marketing program, while another 25% plan to spend between $50,000 and $100,000 per program. Last year, marketers reported an ROI of $6.50 for each $1 spent on influencer marketing.
The Importance of Transparency
As the above figures suggest, it is important for marketers to know exactly what they can expect to achieve by running influencer marketing programs. Such investments are only sustainable if they can continue to deliver good ROI, and prove that this tactic is a cost-effective way to reach their marketing goals. However, this is not the only reason that transparency is essential in this area.
Shoppers are now demanding it as well. They want to know when an influencer is being sponsored and by what brand, and they prefer if both parties make statements to inform them of these relationships. In fact, this demand is so strong that the Federal Trade Commission (FTC) has implemented regulations that call for such disclosures.
Transparency from a Business Perspective
One of the key metrics used to determine the amount paid for a social media post, mention, or other promotion by an influencer is the number of followers that he or she has; this indicates reach. Needless to say, some have realized that if they can inflate their follower counts, they can make more money. This has become a huge problem for brands engaging in influencer marketing.
Influencers can inflate their follower counts in a number of ways. One of the most common is to use “bot” accounts that automatically follow for their main account. Another method is to use bots to generate fake views without adding followers. This is most noticeable on YouTube, where a new video may show hundreds of thousands of views, even though the publishing account has only a few people subscribed to it. However, both methods may be combined to make the numbers appear more legitimate.
Unilever Strikes Back
According to AdAge, a high number of FMCG brands are in partnerships with influencers who have artificial followers. And Unilever, in particular, recently advocated for greater transparency in influencer marketing at the Cannes ad festival earlier this year. The company also announced that it would no longer advertise with those who buy followers, and that its own brands will never buy followers either. The goal is to reduce wasted ad spend, not only for its own company, but for others as well.
The report also indicated why these individuals might decide to inflate their follower counts. Someone with 100,000 Twitter followers, for example, can make $2,000 for a promotional tweet, but someone with 1,000,000 followers can generate $20,000 for the same tweet. It’s no surprise that mid-level influencers often have about 20% fake followers, according to Business Insider.
As brands strive for more transparency in their relationships with influencers, it’s sometimes difficult to filter out those who are dishonest in their business practices.
Fortunately, technologies are improving to provide clear metrics and robust tracking, which will make this task easier for marketers.
Transparency from a Shopper Perspective
Shoppers prefer to know when tweets, Facebook posts, and other content have been sponsored. So far, though, this information has been hard to obtain. According to a Zine study referenced in eMarketer, only 52% of influencers said that they routinely label sponsored content. Another 41% said they only label it when asked to, and 7% said that they never label it. But according to the FTC’s Endorsement Guides, any endorsement that’s made on behalf of a sponsoring advertising – whether it’s in the form of a blog or social media post – should provide full disclosure.
Though many social media platforms offer disclosure tools, these do not currently meet FTC requirements. Therefore, it’s recommended that both brands (sponsors) and influencers be fully aware of the requirements to achieve full compliance. Notably, Influicity’s recent report claims that 90% of endorsed content is not being properly disclosed according to FTC regulations. This suggests that there is more work to be done in this area.
Tips for Achieving Transparency
It is clear that more transparency is essential in the field of influencer marketing. Brands need to know the true reach of the individuals they work with, while shoppers deserve to know which posts are sponsored through full disclosure.
New tools are coming onto the market to help brands achieve more accountability in their partnerships with influencers, and in turn, make it harder for them to mislead brands with inflated follower counts. Many of these tools can help brands source influencers, while others will provide reliable data and bot-tracking software. Another option is to turn to micro-influencers, who may have fewer than 30,000 followers, but deliver 60% more engagement than those with larger followings. Lastly, brands may consider partnering with third-party agencies to manage their programs, which can monitor FTC regulations and ensure full compliance.
Although influencer marketing is experiencing tremendous growth as a viable marketing strategy, the lack of accountability can negatively impact the program’s success. Together, the strategies mentioned above should lead to increased transparency on both fronts and result in better ROI from your campaigns.