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Digital Influencer utilizing social selling

Risk & The Rise of the Digital Influencer

by Jonathan Gilliam, Momentum Factor

 

We’re all slowly watching it happen. Content is becoming shorter, more interactive, and more accessible. With the advent of platforms like TikTok catering to younger people, as well as photo-sharing apps like Instagram adapting to the rise of short, video-based posts with the invention of Instagram Reels, content is changing. And with it, the creators who monetize it. You may have thought to yourself, “it seems like just about anyone can be an influencer these days,” and you’d be correct. Young people are finding it easier than ever to monetize the now-marketable skill of content creation. The transition from long-form to short-form content created a higher demand for more content, and thus more digital content creators.

Earlier birthplaces of the modern “influencer”, like the late Vine app, didn’t have the infrastructure to appropriately compensate popular users, so these creators packed up and moved to new platforms like Instagram, Facebook, YouTube, and now TikTok.

This led to a boom in e-commerce, which resulted in consumers actually seeking out digital ads and trusted voices when purchasing, instead of avoiding and ignoring them. The “trusted voices” are, of course, the creators that have more credibility with their audience than the average corporate ad paid actor. Though they are essentially also paid actors, the sponsored content that influencers do is often just as engaging as their non-sponsored content. This variety of individuals, all different niches of internet micro-celebrity, allows brands to go through potential promoters with a fine-tooth comb and select the one they think already has the “look” or presence that could well-represent their specific brand.

This is especially true in the direct sales industry, as direct selling brands often rely on that “real people, real results” angle when promoting. It seems that direct sellers truly have the pick of the litter when it comes to promoting products and opportunities, but in the heyday of influencer marketing, risks are almost as present as advantages.

In terms of risk, let’s talk about an increase in Federal Trade Commission (FTC) enforcement when it comes to income, health, and product claims. Influencers are often the ones curating their own content, sponsored or not, and this leads to them wanting to protect the voice they have curated, and followers are familiar with. They are, in a sense, a brand in themselves. However, they can’t entirely say whatever they want in an ad. The FTC has declared that influencers must use the appropriate hashtags, such as #ad, #spon, and #partner when posting sponsored content. This, however, is not something that many influencers want or think to do. They want their audience to perceive their reactions to the sponsored product as authentic, not paid. But regulators say that inauthenticity and misleading statements about a product that is not tagged #ad is grounds for citation by the FTC. According to a survey of influencers conducted by eMarketer in 2018 and reported by Forbes, 41% of influencers do not tag correctly unless they are explicitly told to, and 7% don’t tag at all. The risks associated with this mistake are grave and can lead to direct sellers being fined.

So how can direct selling companies combat regulatory and compliance risks while still adapting and taking advantage of the new golden goose that is the influencer market? It starts with rejecting convention and embracing the future of direct selling. Influencership is a coveted role pursued by many bright, young people as they are learning to make their way and contribute to the digital economy. There is an infinite number of worthy voices out there to have faith in, whether you are searching for a quick sponsorship deal to dip your toes into the waters of TikTok marketing, or even searching for the next face of your company. Regardless, it is imperative to prioritize best practices and compliance procedures. Influencer marketing is not going anywhere, and when employed with risk in mind, could put your company on the digital map, where it should be.

To learn more, click here to contact Jonathan and the Momentum Factor team today.

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