What's an Influencer The Complete WIRED Guide

The Future of Influencers

Over the last five years, influencer marketing has grown into a multibillion-dollar industry, with brands large and small coming to view the practice as a less ham-fisted way to hawk their products. In the early days, brands that sent an influencer free products or offered to pay them a small commission in exchange for their consideration would often receive a shoutout or casual promotion. But as more and more companies came to see the practice as an invaluable marketing tool, the power balance flipped, and influencers began to command significantly higher fees for each post, mention, or product placement.

That didn’t slow down advertisers’ thirst for an effective way to covertly raise the profile of their brand in the eyes of consumers. Average payment rates only continued to soar, especially after influencers started to retain agents and managers. Today, influencers are all over social media platforms like Instagram, YouTube, TikTok, Twitch, Tumblr, and Snapchat, and sponsored content has become so ubiquitous that some platforms, like Instagram, now have built-in tools to help influencers disclose and promote their paid partnerships in Stories or feed posts.

The digital marketplace model pioneered by PayPerPost is booming, with thousands of companies now vying to play matchmaker between brands and content creators to craft the perfect #ad. Grapevine and Famebit are two of the most popular. Famebit, which connects YouTubers and Instagram users with sizable followings to companies interested in sponsored content, took off in 2016 after it was purchased by YouTube. The company has since integrated Famebit into its platform, making it easier for content creators looking to monetize their YouTube accounts to find an ad campaign that aligns with their interests. It seems like only a matter of time before Instagram attempts something similar.

On YouTube and Instagram, product placement deals are now common, as are the use of affiliate marketing links and sponsored coupon codes. Popular YouTuber Sanders Kennedy, who chronicles drama in the influencer world, told WIRED that a brand once offered him a couple thousand dollars to place a beverage on his desk while filming a video. A 2018 WIRED investigation into the influencer marketing industry found that payouts increase if the influencer tags or shouts out the brand specifically, but covert endorsements are often preferred.

Influencers like Luka Sabbat, a model-turned-actor with two million followers on Instagram, can charge upwards of $40,000 to promote products in story and feed posts.The cost of a single promotional photo posted by Instagram influencer with a million followers starts at $10,000. YouTube is more expensive. A video from a YouTuber with 3 million subscribers will cost at least $40,000. Influencers charge up to $10,000 to $30,000 more to post a negative review of a company’s competitor, the investigation found.

Influencer payout rates have risen so quickly that advertisers that used to be some of the industry’s biggest advocates now feel priced out of the market. Marlena Stell, a popular beauty influencer and entrepreneur, relied on influencers to promote her cult cosmetics brand Makeup Geek since its launch in 2011. However, she cut back on the practice in 2018, telling WIRED that content creators had begun to regularly demand $50,000 to $60,000 per video.

These prices are a function of the fact that, online, value is quantifiable. Or at least it’s supposed to be. The worth of an idea, person, movement, or meme is based on how many likes, views, clicks, and shares it has. An idea expressed in a tweet that garners thousands of likes seems inherently more valuable and widely accepted than one with four. An Instagram user with tens of thousands of followers is assumed to have an audience of that many real people, and a YouTube video with millions of views is thought to have captured the attention of millions of actual viewers. But those interactions can easily be bought.

That an influencer’s potential earnings are directly linked to their reach has come as a major boon for fake engagement marketplaces, where key metrics like followers, views, and likes can be purchased anonymously online for cheap. As the influencer marketing industry grows increasingly overheated, with more and more brands getting onboard each quarter, the problems posed by rampant engagement fraud have only worsened. According to cybersecurity firm Cheq, influencer marketing fraud is projected to cost brands $1.3 billion in 2019 alone.

Which, of course, has led to the rise of influencer fraud detectors. Some companies rely on human investigators to suss out fake or inflated accounts, while others use proprietary programs designed to spot signs of fakery, but it’s largely a cat and mouse game. One of the simplest tricks used by industry experts to tell whether an Instagram influencer padded their stats—comparing the amount of likes per post to the influencer’s follower count—won’t be possible if Instagram goes ahead with its plans to do away with public like counts. (Instagram, for its credit, hopes that getting rid of like counts will disincentivize fake engagement peddling more generally, but that seems unlikely.)