Why The Influencer Marketing Industry Requires Guardrails

In the past few years, the influencer marketing industry has exploded, and more and more brands are investing billions of dollars in partnering with social media personalities. It isn’t hard to tell that a piece of previously small-scale marketing practice has evolved into a central element of contemporary approaches. When properly executed, influencer campaigns can be a highly effective way to engage with your core audience while also increasing awareness and generating leads for the business.

However, the bigger the influencer economy has grown, the bigger the concerns have also become. Whether it’s the lack of transparency or dubious endorsement practices, mental health repercussions on the influencers themselves, or a total lack of repercussions, the industry undoubtedly operates like a barely tamed frontier. With further exponential growth on the horizon, it might be time to rethink our approach and introduce tighter guardrails and regulations.
In this detailed guide, we will examine the major challenges of the influencer field and explain why it is so important to bring more regulation and responsibility into the market. You will also learn more about the most significant cases and be introduced to the most recent studies and opinions of the experts. I expect that after reading this research work, you will have no doubts anymore that the “Wild West” era of influencer marketing should be stopped for the good of companies, customers, and influencers themselves.

The Rise of the Influencer Economy

Before we can appreciate the necessity of guardrails, we first have to understand how widespread the influencer economy has become. The most recent industry estimates predict that worldwide spending on influencer marketing will soar to $16.4 billion by 2024, compared to only $1.7 billion ten years ago.

Influencer partnerships have become a central element of the marketing strategy of brands in almost every market. A study showed that 93% of marketers consider collaborating with influencers to be a critical aspect of their current plan. Every doubt about the role of this collaboration disappears when it becomes apparent that influencer campaigns can gain far more public engagement and return on investment than old-fashioned marketing channels.

So, what’s driving this rapid growth? A few key factors.
1. Consumer attention: There is a shift in consumer attention, which has progressively shifted to social platforms such as Instagram, TikTok, and YouTube. Accordingly, brands have been compelled to adapt. Influencers have been the media’s new stars, with a broad impact on their devout followings.

2. The Trust Factor: According to research, the audience is more prone to trust individual people rather than movie-star images or a marketing strategy. Influencers seem more trustworthy, human, and professional.

3. Trackable Performance: Influencer marketing is data-based, meaning managers can measure an influencer’s campaign success by the exact number of views, number of shared or liked posts, and customers gained. As a result, the brand can see if it is overpriced or affordable

4. Cost Efficiency: The pricing is based on various factors, but small and middle-sized annexes prefer micro-influencers because of the lower price.

Lack of Transparency & Questionable Practices

Another significant issue that the influencer industry faces is the lack of transparency regarding the funded material. All platforms have rules on such disclosures, but in reality, there are no meaningful repercussions for breaking them. The 2021 study on the matter, conducted by the University of Southern California, revealed the shocking reality: “Nearly 93 percent of influencer posts violated Federal Trade Commission disclosure guidelines”; a significant percentage of anything collected hints at complete impunity.

What influences this is the thin line between non-sponsored and sponsored content. Most influencers will blur the lines further by slipping mentions of sponsored products or services into their regular social media posts. For the average consumer, it might be impossible to tell what’s an ad and what’s a real recommendation. It is not just a matter of disclosure, though; many people doubt the authenticity of influencer audiences. The trend of buying fake followers or using bots to boost engagement rates is truly shocking. In reality, many influencers artificially exaggerate their reach and importance. In this way, brands can collaborate with “influencers” who have achieved popularity on Instagram or TikTok, depriving them of the trust and authenticity they need.

However, it’s not just the fairness of Instagram’s pricing policy that raises doubts here. There have been plenty of stories of influential individuals misrepresenting products, services, or experiences. Indeed, from promoting shady health supplements inexplicably to pushing five-star travel packages that turn into nightmares, a few influencers have crossed some ethical boundaries while hunting for cash. The Fyre Festival case was one of the most infamous ones: influencers were paid enormous amounts of money to advertise the event, which rapidly spiraled into shame and disaster, leaving its attendees stuck with a cheese sandwich. The whole picture is compounded by the lack of transparency and the sheer scale of grey practices that have ruined the reputation of the entire industry. And without more robust guardrails, there’s a real risk that the entire model could come crashing down.

The Mental Health Crisis

And that’s not all – with the rapid growth of the influencer economy over the past few years, we have also witnessed distressing mental health issues within the individuals around whom it revolves – the influencers themselves. The almost constant need for new content creation, immaculate aesthetics, and interacting with hordes of followers can all add up. It has been reported that this group is significantly more likely to suffer from anxiety, depression, and burnout and even contemplate suicide than the population in general.

To some extent, this is an inherent drawback of the social media concept, as these people have to face a significant degree of intuitive personal criticism, harassment, and trolling. Having to adapt to the pressure of perpetual feedback from strangers and hordes of trolls often proves to be bad for the psyche.

Financial Challenges

Lastly, we cannot ignore financial pressures. Many influencers, especially when relatively new, are under immeasurable pressure to “go profitable” as quickly as possible. The constant need to secure sponsorships, negotiate the best deals, and align their content to earn the most is often too much to handle. “One survey from 2020 found that almost 40% of influencers have experienced burnout,” Brionesova reveals. She also notes that many of them reported the persistent stress of delivering new content and the lack of an adequate work-life balance as the main reasons. It is genuinely tragic that influencer suicides seem to be a pattern, not an unfortunate occurrence, in the recent past. In fact, it appears that our patterns of behavior only exacerbate the issue further.

Clearly, something needs to be done to address these pressing mental health challenges. Influencers should not have to sacrifice their well-being in the pursuit of fame and fortune. And brands that leverage influencer partnerships have an ethical obligation to ensure the creators they work with are being adequately supported.

The Need for Guardrails

Why, then, do we need better protective measures and policing in the influencer business? Put another way, the lack of guardrails and repercussions has perpetuated a slew of harmful practices that jeopardize the industry’s existence in general. As the reluctant flow of shady sponsored material and potential mental health terrorism among influencers show, the industry’s current state is unfeasible. And, as it rises in prominence, the threat grows stronger. Consumers have a right to feel invested when watching their preferred influencer share its endorsement of a product, regardless of whether the support is genuine or sterile.

Brands need to be confident that their influencer partnerships are established with trustworthiness and honesty. On the other hand, influencers require ensuring that they are sufficiently defended and supported. First, what might these important rules appear like?

Here are a few of the most vital:

• Disclosure & Transparency: explicit, consistent, and enforceable policies on sponsored content and paid partnerships. With lasting results for those platforms, accountabilities also make users report on the compliance of these policies with tough sanitation.
• Audience Authenticity: Requires all influencers to verify the authenticity of their follower base, with bans or penalties on the user of bots or other artificial means of inflating metrics. There could also be a concern regarding the real profiles of the audience members.
• Truth in advertising: Imposes even stricter rules to the truthfulness of product/service claims, with harsh consequences for misleading or deceptive endorsements.
• Help to struggling influencers: Industry-wide initiatives to provide influencers with access to mental health resources, counseling, and wellness programs. Brands should also consider their partners’ well-being when making selection decisions.
• Data Privacy: Requires stricter regulations on the collection and use of audience data, ensuring influencers and their partners are transparent about how it is leveraged.
• Ethics: Development of ethical codes of conduct for the industry, coupled with clear guidelines and enforcement mechanisms for acceptable influencer agencies.

Now, of course, implementing these guardrails is easier said than done. It will require buy-in from platforms, brands, regulators, and even the influencer community itself. But the alternative – the further slide into the muck of morally suspect business conduct and mental health crises – should be considered unacceptable. The influencer marketing industry is simply too big and has too much of an impact to keep governing by the Wild West rules. It has to be reined in for the good of brands, consumers, and the influencers themselves. The future of this critical marketing channel depends on it.

Conclusion

The history of the influencer marketing industry over the past decade has been nothing short of transformational. But as truly astronomical as the growth has been, the lack of guardrails and oversight has also led to a worrying proliferation of harmful practices. Whether it is the widespread lack of transparency surrounding sponsored content or the mental health crisis that many influencers are facing, the use of endorsements as they currently stand is not practicable. Consumers need more authenticity and honesty from the endorsements they encounter, brands deserve peace of mind about the trustworthiness of their collaborators, and influencers require increased protection and enforcement.

The influencer industry will need to implement the proper guardrails – around disclosure, audience authenticity, truth in advertising, mental health, data privacy, and ethical codes of conduct – if it wants to maintain long-term veracity and reputability. That would not be simple, but the entire edifice is in danger of toppling if we do not begin now. The influencer business is too big, too mighty, and too significant to be permitted to operate as a free-for-all. The future of the influencer industry is contingent on its conduct.