eCommerce

NYC Summit To Tackle Lack Of Influencer Regulation

Influencer Fraudnomics Summit, influencer marketing, social media, followers, fraud

The first Influencer Fraudnomics Summit in New York City on Tuesday (Sept. 17) will discuss the fraud problem stemming from influencer marketing.

The event strives to unite the worlds of communications and marketing to stimulate conversations about digital marketing and influencer campaigns, PR Daily reported on Monday (Sept. 16).

“It’s challenging that the industry that was built on trust is struggling with that trust,” said Erick Schwab, co-founder of Sylo, a third-party service that authenticates online audiences. Sylo is sponsoring the event. “It’s a very fine, delicate balancing act.”

University of Baltimore professor of economics and statistics Dr. Robert Cavazos researched the influencer fraud problem and said issues are anticipated with a model like influencer marketing.

“Like with all new innovations, there are going to be some hitches to it,” Cavazos said.

A research study he conducted estimates that annually, 15 percent of money budgeted for influencer marketing campaigns is wasted.

He said, “$1.3 billion is a conservative estimate. The 15 percent is an average. There will be some influencers that have 90 to 95 percent of their followers which are real followers. Some are going to have bought half of their followers.”

Regulation could be the answer, some companies have speculated, and Unilever said it is all for tackling the problem aggressively.

“The scale and scope of influencer marketing is growing apace and holds increasing importance in the marketing mix as a way for brands to reach consumers, given influencers’ deep and direct connections with their audiences,” said Casey DePalma McCartney, director of PR and digital engagement for Unilever North America. “At the same time, bad practices or dishonest business models have the potential to erode trust in the whole ecosystem.”

Despite reports about influencer fraud, luxury fashion brands like Christian Dior, Louis Vuitton and Gucci are upping their social media game, especially on Instagram, and pouring real money into efforts to court young shoppers. As social media influencers are reaching mainstream status, they can ask for upwards of $22,000 per post.

——————————

New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

TRENDING RIGHT NOW