What is the social media “black market”

A new lawsuit from Facebook is once again drawing attention to the issue of influencer fraud.

The social media giant is suing a New Zealand company and three of its directors for allegedly selling fake likes, views, and followers to Instagram users. In the lawsuit, Facebook claimed the defendants made around $9.4 million from the sale of fake engagement on Instagram.

“By filing the lawsuit, we are sending a message that this kind of fraudulent activity is not tolerated on our services, and we will act to protect the integrity of our platform,” Jessica Romero, director of platform enforcement and litigation at Facebook, wrote in a post on the company’s website.

According to the lawsuit, Instagram users who wanted to boost their engagement could pay for automatic likes through the New Zealand company’s various websites. As a result, Facebook said some users were able to gain 500 likes within seconds of posting something.

This isn’t the first time Facebook has taken legal action against fake engagement. In March, it filed a lawsuit against four companies and three people in China for promoting the sale of fake accounts, likes, and followers on Facebook and Instagram.

While social media companies have been clamping down on the industry’s “black market,” the issue is a growing concern given the surge in influencer marketing campaigns.

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What is influencer fraud?

To be a social media influencer, you need to have a decent number of followers on different platforms. That helps determine how influencers are hired, how much brands pay them, and how customers perceive their endorsements. The more people an influencer reaches, the more money they make.

That allure of generating a quick high profit leads some to purchase fake engagement.

One route is for online personalities to use bots that automatically like and share social media posts. Another way is to buy a mass of fake followers.

And making purchases for fake engagement is a lot easier than you may think. While Twitter and other social media platforms prohibit buying followers, other websites openly sell them.

One of those websites was from the now-defunct company Devumi, which sold fake followers, likes, and views on platforms like Twitter, YouTube, LinkedIn, and Pinterest.

A New York Times investigation found that Devumi used “an estimated stock of at least 3.5 million automated accounts, each sold many times over” and in total provided its customers with more than 200 million Twitter followers. Earlier this year, Devumi settled a case with the state of New York after the attorney general’s office said the company’s practices constituted illegal deception and impersonation.

Of course, not all influencers use fake engagement. Many, especially micro-influencers (more on them later), have worked hard to secure a group of followers that trust and value their endorsements.

The trouble is that the rise in fraudulent engagement can make it difficult to tell the difference between what’s real and what’s fake. And that’s a situation that’s troubling for brands, consumers, and non-fraudulent influencers alike.

How much of a problem is influencer fraud?

What makes fake engagement such a concern is the recent increase in influencer marketing use. In fact, the market is projected to worth up to $10 billion globally by 2020.

A survey by the Association of National Advertisers found that in 2018, 75% of brands utilized influencers and nearly half were planning to increase spending on this type of marketing in the year ahead.

But at the same time, companies could be wasting millions of advertising dollars. According to a report from Captiv8, a company that helps brands with influencer marketing campaigns, in 2017 more than $2.1 billion was spent on influencer marketing on Instagram and that 11% of the engagement came from fake accounts. The company claimed that a quarter of a billion dollars was wasted as a result.

It’s a problem that’s become widespread. In 2018, Facebook removed more than 1.5 billion fake accounts from its platform. Plus, research from the University of Southern California and Indiana University found that as of 2017, up to 15% of Twitter accounts were fake.

In a session at the 2019 TED conference, Jack Dorsey, Twitter’s CEO, went so far as to say that he regrets creating a platform that puts so much emphasis on followers and likes.

“If I had to start the service again, I probably would not emphasize the follower count as much. I would not emphasize the ‘like’ count as much. I don’t think I would even create ‘like’ in the first place,” said Dorsey.

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What brands need to look for

Despite the problems with fake engagement, influencer marketing still offers brands numerous benefits.

But how can you ensure your business doesn’t fall victim to fraud when working with influencers? You’ll need to do your homework.

Verify an influencer’s background by requesting their portfolio, studying their demographics, and analyzing their social media posts. Be on the lookout for influencers with a high follower count but limited engagement. If an influencer with thousands of followers only has a few likes and shares, their fanbase has likely been artificially enhanced. With Instagram, for example, the average rate of likes is between 1% and 5% of the total following size.

Also, look at the comments on different posts. If you see a pattern of comments being unrelated to posts or routinely coming from the same account, that’s a red flag.

And keep an eye out for sudden and drastic shifts, both increases and decreases, in followers.

Don’t just select someone based on the number of followers they have, either. While the idea of a social media influencer conjures up the image of someone with millions of followers, it’s the level of engagement with fans that really matters.

Micro-influencers typically have a high level of engagement with their followers. In fact, micro-influencers with 1,000 fans have been found to have an 85% higher level of engagement than influencers with 100,000 followers.

The difference is that micro-influencers have niche audiences that they engage with. So, working with micro-influencers that cater to your business’ sector can lead to a better return on investment since the audience will already have an interest in your goods or services.

As social media use continues to rise, so too will the popularity of influencer marketing. A little due diligence can go a long way to ensuring your business doesn’t waste resources on social media’s “black market.”

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