With an average ROI of $6.50 for every $1 spent and the ability to drive website traffic and sales, influencer marketing can be a powerful tool for businesses looking to increase brand awareness, drive sales, and build trust with their target audience. In fact, a study by the Influencer Marketing Hub found that influencer marketing has an average ROI of $5.20 for every $1 spent, while a survey by Linqia found that influencer marketing delivers 11x higher ROI than traditional forms of digital marketing. These numbers demonstrate the effectiveness of influencer marketing as a tool for businesses looking to reach and engage with their target audiences.
However, while influencer marketing can bring numerous benefits to businesses, it also carries potential risks and negative outcomes that companies must be aware of and work to mitigate in order to fully reap its benefits. To ensure the success and avoid the potential pitfalls of influencer marketing campaigns, it is important for businesses to be cognizant of the potential risks and take steps to address them.
One potential risk of influencer marketing is lack of authenticity. If an influencer is not genuine in their endorsement of a brand's products or services, it can damage the credibility of both the influencer and the brand. For example, in 2018, cosmetics brand Nars faced backlash after it was revealed that some of its influencers had used Photoshop to edit their Instagram photos to make the brand's products appear more effective. This led to accusations of false advertising and damaged the credibility of both the influencers and the brand. In 2017, fashion brand Calvin Klein faced a similar backlash after it was revealed that some of its influencers had used Photoshop to edit their images and make the brand's products appear more effective. This led to accusations of false advertising and damaged the credibility of both the influencers and the brand.
Another potential risk is misalignment with brand values. If an influencer's personal brand or values do not align with those of the brand, it can damage the reputation of both the influencer and the brand. For example, in 2017, fashion brand Michael Kors faced backlash after partnering with influencer Danielle Bernstein, whose personal brand and values did not align with those of the brand. Bernstein was known for promoting a luxurious and extravagant lifestyle, while Michael Kors was known for its more accessible and affordable fashion. The partnership was met with criticism from both Bernstein's followers and Michael Kors' customers, and ultimately damaged the reputation of both the influencer and the brand.
Legal risks are also a potential pitfall of influencer marketing. If an influencer fails to disclose sponsored content or makes false or misleading claims about a brand's products or services, it can result in legal liabilities for both the influencer and the brand. In 2017, the Federal Trade Commission (FTC) in the United States issued guidelines on influencer endorsements, stating that influencers must clearly and conspicuously disclose sponsored content and that endorsements must be honest and not misleading. In 2019, the FTC settled a case with beauty influencer Michelle Phan, who was accused of failing to disclose sponsored content and making false or misleading claims about the effectiveness of the products she endorsed. The settlement required Phan to clearly disclose sponsored content in the future and pay a $5,000 fine.
In 2018, cosmetics brand Maybelline faced a similar backlash after partnering with influencer Manny Gutierrez, whose followers were critical of the brand's decision to hire a male influencer to promote their makeup products. The negative response led to negative comments and reviews on social media, which damaged the reputation of the brand.
Finally, difficulty measuring ROI is a potential challenge of influencer marketing. It can be difficult to accurately measure the ROI of influencer marketing campaigns, which can make it challenging to determine the effectiveness of the campaign and justify the investment. In order to maximize the potential of influencer marketing and ensure that it is a worthwhile investment, businesses must carefully plan and execute their campaigns and carefully track and measure their results.
In conclusion, influencer marketing can be a powerful tool for businesses looking to reach and engage with their target audiences. However, it is important for businesses to be aware of the potential risks and negative outcomes and take steps to mitigate them in order to maximize the potential of their influencer marketing efforts. By carefully planning and executing their campaigns and tracking and measuring their results, businesses can effectively use influencer marketing to drive website traffic, increase sales, and build trust with their target audience.
For further reading on the potential risks and negative outcomes of influencer marketing, check out these resources:
"The dark side of influencer marketing: what brands need to know" by Forbes
"Influencer marketing pitfalls to avoid" by Business News Daily
"The risks and rewards of influencer marketing" by Marketing Week
By understanding and addressing the potential risks and negative outcomes of influencer marketing, businesses can effectively leverage the power of influencer marketing to drive website traffic, increase sales, and build trust with their target audience.