In the wake of recent media buying scandals and concerns around production budgets and spends, transparency of media and production buying and the effectiveness of advertisers’ investments in these services is becoming increasingly important and frequently scrutinised.

This raises the question of how advertisers and agencies might conduct due diligence in respect of buying more unconventional, non-traditional media such as the content created and exposure generated through social media influencers. This is especially true where the return and effectiveness of the media investment is difficult to accurately assess.

Given the ability of some influencers to command significant dollars for spruiking brands and products on their social media platforms, questions arise about their ability to not only reach, but to engage consumers and convert those engagements to sales. This is where it becomes important for advertisers and agencies alike to conduct due diligence on the influencer and in particular, their followers.

Social media platform algorithms aside, it is well established that in general, the higher the follower count, the higher the engagement. For aspiring influencers, the faster a high follower number can be reached, the greater the prospect of being engaged by advertisers willing to pay for the influencer’s services, either directly or via influencer platforms.

As more and more people attempt to establish themselves as influencers, it is becoming increasingly challenging for social media users to grow followers organically due to an abundance of impressive content being created and ever-changing social media algorithms.  For those struggling to reach a high follower count, the easy option of purchasing followers may seem enticing. It has been reported that more than 10% of influencers have fake and inactive followers. Furthermore, it is now becoming apparent that some well-established influencers have a dark past. Whilst they now have a genuine follower base, they originally grew their following through questionable means.

While advertisers are becoming more aware of how to spot extra-fraudinary influencers, such as through their high follower vs low post engagement, large follower count despite the profile’s newness, ‘spammy’ follower usernames and the use of social media account auditing tools, it is likely that extra-fraudinary influencers may slip through the cracks. For advertisers wary of how to spot an extra-fraudinary influencer, sites such as InfluencerDB and Hypetap are becoming increasingly valuable in helping with due diligence on social influencers and the veracity of their stated communities.

What are the implications then where an influencer has misled an advertiser about their following? Particularly where this leads to the advertiser paying for the influencer’s services on the basis that they have a significant following and on the understanding that they would have a significant reach to consumers?

Under section 18 of the Australian Consumer Law (ACL), a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Under section 29 of the ACL a person must not, in trade or commerce, in the connection with the supply or possible supply of services or in connection with the promotion by any means of the supply or use of services, make a false or misleading representation that the services have sponsorship, approval, performance characteristics, accessories, uses or benefits that they do not have.

Influencers must therefore be aware that falsifying their followers, or maintaining a dark past of ‘fake’ followers in order to represent to advertisers that they should be engaged to promote the brand, could see them fall foul of the Australian Consumer Law and breach sections 18 and 29.  In some cases it may amount to fraud.

Furthermore, an influencer who is found to have misrepresented their ability to influence their followers due to their followers being fake is likely to have a hard time convincing other advertisers to engage them and, if made public, may place at risk the all-important influencer qualities – trustworthiness and authenticity.  

DVM Tips

Agencies and advertisers who engage influencers should:

  • use trusted influencer platforms (for example The Right Fit) that take steps to vet influencers before allowing platform membership
  • conduct direct due diligence on proposed influencers to determine if their following is authentic
  • consider using audit tools for verification purposes
  • ensure you enter into an appropriate agreement with each influencer which mitigates agency and brand risk

Article by the DVM Law team.
Facebook – @dvmlaw
Linked In – DVM Law
Twitter – @dvm_law