As influencer marketing becomes an increasingly important pillar for brands and their budgets — spending is forecasted to hit USD 10 billion by 2020, up from USD 8.5 billion in 2019 — there’s a chance that these businesses could be losing substantial money due to influencer fraud.
The study, conducted by cybersecurity company Cheq and the University of Baltimore, claims that influencer fraud will cost advertisers USD 1.3 billion this year, a number projected to grow to USD 1.5 billion in 2020. Influencers can make a staggering USD 12,000 per post, but in an industry where paychecks are contingent on follower numbers, it costs just USD 16 to buy 1,000 Instagram followers. The research reveals that among 10,000 influencers audited by metrics company Social Chain, about 25% of their followers are fake.
There’s also the chance that influencers could be posting fake ads or sponsored posts on behalf of brands that they are not working with, to scam their way into getting actual contracts.
Development of an industry always has to take into account the development of fraud techniques and methods. It teaches that how important is verification of a potential business partner or an employee.