Influencer marketing continues to grow like a weed, but that doesn't mean that brands employing it don't face big challenges.

Here are six inconvenient truths that brands using this increasingly popular digital marketing technique should be aware of.

1. Calculating ROI can be difficult

As Rakuten Marketing MD and Econsultancy contributor James Collins recently noted, “influencer marketing is often about raising awareness through aspirational content, with a view to generating purchases further down the line, rather than pushing immediate sales.”

But for brands spending growing amounts of big bucks on influencer marketing campaigns (according to research from Linqia, marketers will spend $50,000 to $100,000 per influencer marketing campaign this year) justifying that spend increasingly requires more than faith that it will produce a return down the line. 

Unfortunately, a recent Econsultancy report revealed that measuring ROI on their influencer initiatives is the biggest challenge for 65% of marketers. While measuring ROI is hardly a challenge exclusive to influencer marketing, given the growing cost of influencer marketing campaigns, it's getting harder and harder for marketers to brush the ROI question aside.

2. Engagement doesn't necessarily translate to efficacy

Part of the ROI calculation challenge is that some of the most easily tracked metrics in influencer marketing campaigns are related to how much followers engage with sponsored content. But likes, retweets and comments aren't always meaningful metrics and don't even necessarily mean that an influencer's followers have truly engaged with the branded content.

At a minimum, companies should use benchmarking to assess whether or not the engagement their campaigns is generating is in line with what they expect based on an influencer's non-paid content, but it's not clear that marketers are even doing this.

3. It's hard to assess audience quality 

Fake accounts, often created by automated means, have for years been a thorn in the side of social platforms like Facebook and Twitter. While it's impossible to pin down exactly how many fake accounts exist, even if a relatively small percentage of the accounts on these platforms are fake, that represents tens of millions of fake accounts, if not more.

By some estimates, even some of the biggest influencers on these platforms have fake followers well into the double digit percentages, which can equate to anywhere from tens of thousand to millions of fake followers. Even though in most cases this almost certainly isn't intentional, it's a problem given that the most popular influencers are setting their prices based on their total audiences and marketers can't really be sure whether the number of useless accounts following a particular influencer is 1%, 10%, 25%, etc.

Beyond fake accounts, it's even more difficult to assess the quality of an influencer's legitimate audience. How many followers are active? How many are truly fans of the influencer? And so on and so forth.

4. You can't control how people will react

The concept behind influencer marketing – that brands benefit by positive associations with high-profile individuals on social media platforms – isn't an invalid one, but that doesn't mean that campaigns are guaranteed to produce positive reactions.

For example, Marigold, a prominent dairy and beverage company in Singapore, learned that the hard when when it used three influencers to promote its Marigold Peel Fresh juice drink. One of the influencers, Naomi Neo, who did not disclose that she was being paid by Marigold, claimed that she “always [carries] around a carton of my favorite MARIGOLD PEEL FRESH juice.”

That claim was, for obvious reasons, met with extreme skepticism and lots of negative comments on social media and the web – probably not what Marigold was looking for.

naomi neo

5. Influencer relationships can go south, and quickly

Influencers are human beings and thus not infallible. That means influencer relationships are fraught with many of the same risks as typical celebrity endorsements.

In a worst-case scenario, brands associated with an influencer could suffer some level of embarrassment if the influencer becomes the subject of a public firestorm.

Case in point: after a Wall Street Journal article highlighted a number of anti-Semetic videos posted by PewDiePie, YouTube's biggest homegrown star, brands that had been involved with him, including Disney, made the decision to cut ties. 

While it's unlikely that the PewDiePie association will have a lasting negative impact on a brand like Disney, the fact that it had to end the kind of long-term influencer relationship that is most likely to pay dividends demonstrates just how hard it can be to bank on internet stars as reliable partners.

6. Disclosure is still an issue

In the U.S., the Federal Trade Commission (FTC) is ramping up its efforts to ensure that influencers are adequately disclosing when they are being paid to promote products and services for companies. 

While in theory it should be easy for marketers to require that the influencers it works with are following the applicable rules, and platforms like Instagram are aiming to make it even easier, the FTC is still finding dozens upon dozens of instances of violations of its rules. Even following the FTC's letters, a number of watchdog groups discovered that many of the influencers the FTC warned are not disclosing when they are posting content for brands.

Ultimately, if brands aren't proactive about making sure the influencers they work with are following the rules, it's likely that the FTC will be forced to take enforcement action, action that could carry with it fines for brands.

Patricio Robles

Published 30 June, 2017 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2556 more posts from this author

You might be interested in

Comments (0)

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Digital Pulse newsletter. You will receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.