Timothy A. Koonce: Is it time to regulate social media influencers?

Image promoting the ill-fated Fyre Festival

By Mark Schaefer

Social media influencers have been under the microscope, and deservedly so. A couple of recent headlines:

The disastrous Fyre Festival has been exposed in the press and two films documentaries. Although the organizers committed fraud in multiple ways, it also served as a lightening rod for the super-model influencers who promoted the event without disclosing the sponsorship.
Last year, The New York Times published an investigation into the prevalence of social media bots, particularly those purchased by wannabe influencers and celebrities who want to inflate their importance online. Over a period of years, a company called Devumi “sold about 200 million Twitter followers to at least 39,000 customers,” including famous athletes, chefs, and reality TV stars.
One of the most prominent legal actions against influencers came this year when the Securities and Exchange Commission announced a settlement with Floyd Mayweather Jr. and DJ Khaled for “failing to disclose payments they received for promoting investments.”
And my favorite case study … an agency created fake social media influencers with purchased followers and was able to attract brand sponsorship for them.

So many observers are asking the natural question … should we regulate social media influencers?

My answer is no. Let me explain.

Social media influencers on the rise

Social media influence is a rapidly-growing business. Estimates I’ve seen put annual brand spending on influencers at about $2 billion, a mind-boggling escalation in just a few years. Still, this is less than 5 percent of the total worldwide advertising spend, so the amount of attention it attracts is probably disproportionate to its relative importance, at least for now.

With the deterioration of more traditional advertising channels, I project that we are still at the beginning of the influencer trend. Why? Because it works. Many brands, especially in fashion, entertainment, travel, and tech, have seen huge sales gains through influencer advocacy.

The corruption

When anything becomes profitable and popular, it’s bound to become corrupted. That’s the way the world works.

Over the last couple of years there have been a few high-profile SEC punishments of celebrities like DJ Khaled and even our influencer queen Kim Kardashian. But the FTC cannot possibly regulate this growing army of Instagram stars. Instead, they’re turning toward the companies actually paying the influencers.

In another case, the FTC issued a complaint against Lord & Taylor for paying fashion influencers to create posts about one of its dresses on Instagram, without disclosing that the retailer paid them and gave them the dresses for free.

But these punitive actions represent a tiny portion of the ethical infractions that are carried out by social media influencers every day. With the rise of “nano” and “micro” influencers — social media personalities with a just a few thousand followers — this world has become too fractious for any single government agency to monitor effectively.

Bottom line, the government already regulates influencers but it’s impractical to enforce the laws. The government will have to aim at the sponsoring companies because it cannot possibly monitor tens of thousands of influencers and millions of posts.

So if you’re a company that is sponsoring influencers, step up. It’s your responsibility to monitor your influencers for legal compliance and train them as if you would train your own employees on legal and ethical responsibilities.

In defense of influencers

It’s not a surprise that embarrassing celebrity social media gaffes get all the attention and provide fuel for the detractors.

That should in no way make you think that you shouldn’t take influencer marketing seriously.

I have one agency friend who cannot stand social media influencers. He regards them as fluffy charlatans and dismisses any company who would use them. I wrote this statement on a white board in his office:

“Our job is to sell more shit.”

And influencers sell shit. They do. No question. In some industries, they sell shit better and faster than any advertising program in the history of the world. A single Instagram post from some influencers can change a business. It can change an industry.

Even in the Fyre Festival debacle, the people who actually did their jobs well were the influencers. Just a few Instagram posts from these stars convinced thousands of people to sign up (although the effort fell into chaos from that point on).

Look at the big picture

One last point. I have yet to see an accurate breakdown of influencers who are paid versus not paid. My sense is that the people authentically posting content about brands they love without pay represents 99 percent of the “influencers” out there. A few may get some free gear or even an invitation to an event, but almost no social media influencer makes money from being an influencer.

Most people post content and follow the rules. Most people create content to simply have fun and express their passion.

I think if we group all social media influencers into a bucket of “fluffy nothings” we are missing a profound and important point.

We live in a magical time when anybody — regardless of who they are, the color of their skin, the darkness of their past, their economic condition, or anything else that may define them by society — can create content and build their own independent power in this world.

Nobody has to wait to be picked like the old days. You pick yourself.

For those who are bold enough to create content and be heard, I say, thank you. I wish everybody took advantage of this power. Let’s not be jealous of those who have the courage to be heard. Let’s celebrate it.

Keynote speaker Mark Schaefer Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant. The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.