The Secret World of Influencer Cartels: How Social Media is Being Played

Social media influencers are the new celebrities, dominating marketing strategies across the globe. But beneath the glitzy surface of this fast-growing industry lies a sneaky secret: influencer cartels. These are alliances where influencers join forces to fake their engagement numbers, making their promotions seem much more popular than they actually are.

Think of it like a college where professors get rewarded based on how often their research gets cited. Some might create a “citation cartel,” where they agree to always cite each other’s work, resulting in a bunch of useless citations just to boost their numbers. Influencer cartels operate in much the same way, with influencers liking, commenting, and hyping each other’s posts to artificially inflate their engagement. While this might look impressive on the surface, it’s ultimately a trick that misleads both brands and consumers.

In 2023, spending on influencer marketing soared to a whopping $31 billion, almost matching the entire print newspaper ad market. Despite this massive spend, most influencers get paid based on their follower count and engagement stats, not on the actual results of their campaigns. This encourages some to game the system, leading to around 15% of influencer marketing budgets going up in smoke on fake engagement.

To crack down on this, the US Federal Trade Commission proposed a rule in 2023 to ban the sale of fake social media engagement. But here’s the catch: influencer cartels don’t usually involve money directly; they work by swapping fake engagement, making them trickier to spot.

So, how exactly do these influencer cartels pull off their tricks? Influencers in these groups agree to interact with each other’s content to give their numbers a boost. This creates a false picture for advertisers, who end up paying premium prices for ads that don’t actually reach the right people. For instance, these cartels often use online chat rooms to share links and request engagement. To post a link, influencers must first engage with others' content, with algorithms keeping everyone in line. 

Not all cartels are created equal, though. If the influencers involved share a common niche or interest, their engagement might still have some value. For example, a group of vegan influencers promoting plant-based products to their audiences could still be a win for advertisers. But when influencers with totally different interests—like vegans pushing steak ads—get involved, it’s a complete mismatch and a waste of advertising dollars.

Our deep dive using machine learning revealed that engagement from general cartels (where interests are all over the map) is way less effective than natural engagement. Meanwhile, niche-specific cartels (where everyone’s on the same page) can almost match the real deal.

Based on our findings, we suggest three bold moves:

1. Tighten the rules around general influencer cartels to protect both consumers and brands.

2. Extend regulations against fake social media metrics to cover non-monetary trades, like reciprocal engagement.

3. Shift the influencer pay model to focus on actual value delivered, not just flashy engagement stats.

4. Tap into the power of reel production companies to dodge the pitfalls of influencer marketing.

Luckily, many brands are already switching to this value-driven payment model. Social media platforms can help, too, by spotlighting the quality of engagement.

If you’re not getting the bang for your buck with influencer marketing, don’t sweat it—there’s a better way. Reel production companies like SelebZ are masters at crafting captivating Instagram reels that genuinely connect with your audience. With SelebZ, your marketing isn’t just authentic; it’s a real game-changer.