Can Influencer Marketing Get You in Trouble? Yes
This is the second post in Cheryl Snapp Conner’s new column series for LinkedIn. Follow this series to get my bi-weekly updates on crisis communications/PR.
At this point, everyone is familiar with influencer marketing. If you work in PR or marketing, it is likely you have a strategy for encouraging people with large social media followings to talk about, use and be pictured with your product or service.
As a market, influencer marketing was a $2B industry in 2017, according to Adweek, and is on track to reach $10B by 2020. According to research by Activate by Bloglovin, 67% of marketers believe influencer marketing has helped them reach a more targeted audience and get a more impactful result.
The concept is becoming a staple in marketing budgets. For celebrities, bloggers and those with massive followings it can be a valuable source of income or, in the best cases, a full-time career.
A 10-year study by a professor in Germany, however, concluded that 96.5% of YouTubers don’t make enough money (from YouTubing, at least) to reach the U.S. poverty line. But in the top cases, specialized influencers such as NYC-based fashion and lifestyle influencers Amra and Elma Beganovich had 658,000 and 617,000 followers on Instagram in 2016 and as Financial Times has reported, have risen to 857,000 and 705,000 since. According to people employed by the sisters, they earned around $714,000 apiece in 2015.
From all indications, influencer marketing is a win for all parties, right? So, what could happen to turn it from a boon to a crisis? Plenty, it seems. Consider these issues:
The FTC has specific rules on disclosure.
Do you know the difference between an ad, sponsored content and a brand partnership? An ad is… an ad. It needs to carry a designation to make it clear you are reading an ad and not an influencer’s serendipitous discovery of a lip gloss or a pair of boots they suddenly love. Branded content is material produced and published by the brand, on their own publication. Sponsored content is created by a magazine or journalist to publish on their publication and strives to avoid a salesy or promotional tone. But because the brand has paid to appear, the resulting piece must be clearly designated as sponsored.
Separate from these categories is earned media, where a company may send a sample of its products to journalists and bloggers in the hopes they will like the item and publish the opinions they form. Problems arise when a brand naively or purposely seeks to game the system by paying for coverage they control, but identifying the post as if it is the genuine opinion of the reporter or writer. Some unscrupulous writers have even asked to be paid for links, mentions or photos in their articles. The results, sooner or later: a PR disaster for the publication, the writer, the brand and any agent who has set up the unscrupulous deal.
Imagine the crisis of having an article you appeared in pulled down. Or the reputation hit for the magazine that didn’t catch the deceit. Imagine the writer who is suspended, perhaps with all prior articles also coming down. These outcomes, in my opinion, are more costly than any penalty the FTC might impose.
These are reasons to take extra care as a brand (or an influencer) to be explicit about any connection you have to the product or provider, and to ensure the way you provide that disclosure meets FTC rules as well as the rules of the publication you are contributing to.
The influencer or company becomes involved in a scandal.
Imagine the plight of Subway sandwiches when their iconic spokesman, Jared Fogle, was convicted of pedophilia. The company made headlines all over the world, in a negative way. Analysts concluded the brand would not see high damage from the criminal outcome. Fortune uncovered rumors the company was already planning to part ways with Fogle as photographs made it clear he’d regained much of the weight he lost while eating their sandwiches, which was incongruent with the healthy ingredient messaging they espoused. In any case, a tight relationship with a celebrity spokesperson can become a PR risk in both directions if the celebrity or the company becomes embroiled in negative news.
The partnership between the influencer and the company goes south.
Consider the news this week in Mashable about Grown-ish actor Luka Sabbat, who was paid by Snapchat’s PR agency, PR Consulting, (PRC) to promote the Spectacles product on Instagram. A recent complaint in New York’s Supreme Court says Sabbat received $45,000 upfront in a $60,000 influencer marketing deal to produce four unique posts, including one Instagram post to his 1.4M IG followers and three Instagram stories that required him to be photographed wearing the glasses during New York, Milan or Paris fashion weeks.
The agreement also required he submit all posts to PRC for approval before posting and provide analytics within 24 hours of the post. According to the complaint, Sabbat provided only one post and one story, failed to get approval or produce analytics, was not photographed wearing the specs in Milan or Paris and refused to return the $45,000. The agency demands return of the $45,000 and an additional $45,000 in damages.
Far worse, however, is the PR damage to Sabbat, to the agency and to Snap, Inc., which has confirmed that it engaged the agency for influencer marketing support but is not involved in the lawsuit against Sabbat. A disaster for all.
The influencer’s following is not applicable to your audience or is primarily fake.
This factor is less of a PR crisis issue, but a risk, nonetheless. Social media platforms are taking steps to eliminate phony or “purchased” connections and to provide meaningful analytics. But how do you explain to your company and client the value of 9 million views of your product or hashtag to legions of followers who are out of synch with your audience or message? Does it really help you or the celebrity or influencer to produce 8.75 million appearances of your HR or life insurance offering to an audience of vacationing teens?
Words to the (increasingly) wise
In addition to awareness of influencer marketing’s risk, get smart about the cheaper and better ways to achieve what you need. I wrote about this topic at length in my Forbes column “Celebrity Influencer Marketing Is Dead: Real Employees And Customers are Better.”
Target, Macy’s and a growing number of brands are eschewing celebrity pundits in favor of features about creative real-world uses of their products by genuine customers. The customers are honored, the use cases are ingenious and genuine, and the cost of producing these materials is low. True, these aren’t the folks with multi-million user followings. But their authentic stories will resonate with the customers you desire through your website or IG or Facebook ads you can direct at the demographic groups you are after with compelling information that is correctly and accurately identified as an ad.
You can extend the reach further with hashtag identifiers. Even better, the material is interesting enough you can include it email and content marketing as well. (When was the last time people were interested in opening an email because it featured a picture of Kim Kardashian wearing or holding your goods?)
In my Forbes article, I pointed to the example of a recent Macy’s campaign to create and broadcast video vignettes of customers showing their choice of styling for their Macy’s product in real-life experiences such as dinner parties, formal occasions and sporting events. The company pays the customers they feature a commission on the sales the campaign produces. One woman, they report, was responsible for $15,000 in handbag sales in a week.
No risk. No rules or laws broken. In contrast to the nightmares I’ve cited, this is a form of influencer marketing in which everyone wins. So how could these principles be applying to you? I welcome your thoughts.
More about me and SnappConner
I am a frequent speaker and author on issues of thought leadership and crisis PR. If you need more help from me or from our team, feel free to reach out to us at www.snappconner.com. There is also a library of more than 600 of my columns available at Forbes.com. We have some free resources you are welcome to download, and you can sign up for our bi-weekly Snappington Post while you’re there. You can also learn more about our thought leadership and content training and program by visiting www.ContentUniversity.com.