It wasn’t too long ago that “influencer marketing” was a novel concept. The idea was a thoroughly modern product of the digital economy: rather than spending a massive advertising budget on conventional means like TV commercials, billboards, and glossy magazine ads, pay someone who has a social media account with lots of followers to hawk your product or service for you. It may have a slightly smaller reach than national press, but the ad seems more authentic if coming from a “real person”.
The popularity of influencer marketing has spread like wildfire. Now, on Instagram, you can see everyone from reality TV stars to mommy bloggers selling weight loss products, teeth whitening methods, clothing brands, and fitness trackers. And whether it’s a “micro-influencer”—someone with a relatively small, but devoted following around a niche interest—or full blown celebrities like Kendall Jenner or Bella Hadid, the trust factor that comes from influencer marketing is huge. According to AdWeek, “92 percent of people trust recommendations from other people over brands. Teens have a seven times higher emotional attachment to YouTube stars than to ‘traditional’ celebs. And 49 percent of people rely on influencer recommendations when they’re making a purchase.”
But recently, there have been a slew of scandals that have put the efficacy of influencer marketing into question. The major one was Fyre Festival, a music festival in the Bahamas that was sold almost exclusively through the use of influencer marketing. A leaked pitch deck for the event detailed all the social media stars that the production company boasted to investors would help turn the event into a sensation. As the New York Times reported, “Kendall Jenner was reportedly paid $250,000 to promote the Fyre Festival on Instagram and is said to have neglected F.T.C. rules that the post be labeled an ad. She and others gave a convincing enough impression of real enthusiasm that magazines covered Fyre — a thing that was not actually a thing — as the hot new thing.”
Organizers are now facing a class action lawsuit from attendees who claim that the organizers never intended to provide all they promised. When the festival fell apart, fans became angry, and for the first time cracks in the influencer marketing model began to show. Traditionally, when you paid a model or celebrity to sell a product for a massive brand, consumers understood that celebrity was being paid large amounts to sell it. However, with influencer marketing, that is not always clear. While the Federal Trade Commission does require influencers to indicate on their post that it is indeed sponsored (usually with a hashtag like #sponsored or #ad), there is little recourse if they don’t abide by that rule, such as in the case of Jenner. Because this is not always obvious, followers believe a celebrity or influencer like Jenner is actually endorsing a product, rather than the more transactional situation of merely being paid to appear on a commercial. Thus, when things go wrong—as they did with Fyre Festival—fans are more likely to hold the spokesperson to account in a way they might not have before.
Quoted in the New York Times, Caroline Issa, the fashion director and chief executive of Tank magazine and a street-style star-turned-occasional Influencer, said “The influencer bubble will totally collapse in the next 12 months if people aren’t very careful about the money being thrown around as brands try to buy influencer placement.” This works from both sides: brands need to be more careful about whether or not their influencer marketing is simply getting lost in a sea of branded posts that now dominate social media. Meanwhile, influencer themselves need to be more critical about what they are endorsing, and to take on the responsibility of due diligence where they might not have needed to before.