Instagram has grown to become one of the biggest social media platforms in the world, and companies would be misguided to ignore the potential reach of the platform.

The nature of Instagram’s celebrity-focused community means that businesses can find it difficult to reach people using their company posts.

A solution to this problem has evolved in the form of Instagram influencers – social media “celebrities” who sell product endorsements while cultivating a widespread following by documenting their lives and other experiences.

The influencer marketing industry has seen massive growth and is set to continue on its upward trajectory.

According to a study by Influencer Marketing Hub, the global influencer marketing sector is expected to grow to around $6.5 billion in 2019.

While this marketing channel may seem like an effective way to access audiences through their favourite celebrities, it is not without its drawbacks.

The world of influencer marketing is a unregulated minefield of MLM schemes, fraudulent “celebrities”, disappointing results, shady endorsements, and unprofessional practices.

Failure to deliver

A popular 18-year-old Instagram “macro-influencer” named Arii recently announced in a now-deleted Instagram post that she was unable to sell 36 t-shirts despite having over two million followers.

The influencer needed to sell at least 36 initial orders for her new t-shirts to move forward with designing and producing the products.

Despite appealing to her large following, Arii was unable to drum up enough sales, illustrating the problem with converting large followings on platforms like Instagram into actual results.

The influencer bubble is bursting. This young lady has well over 2 million followers and couldn’t sell 36 shirts. Focus on genuine engagement and not followers cuz they ain’t gonna buy a thing. pic.twitter.com/uOSVxc2k4D — Flawless and Brown (@kissmyelite) May 27, 2019

This example does not mean that all influencers struggle to convert their followers into product buyers, but it does show the potential ineffectiveness of an influencer campaign if the wrong product is sold or the audience cannot relate to the advertisement.

Another infamous example was the Fyre Festival, where the team behind the project paid popular influencers to promote the event.

Many influencers did not disclose that they were paid to advertise the event, and after the explosive failure of the event itself, there was a significant consumer backlash against influencer marketing tactics.

Influencers are also human, and can subsequently be relatively volatile compared to standard advertising channels.

Companies could spend a great deal of money to get an influencer to punt their product to their followers, but there is no guarantee that the influencer in question will deliver.

Snapchat once paid $60,000 to social media influencer Luke Sabbat to promote the company’s Spectacles on Instagram.

Sabbat did not submit his posts for approval and did not deliver on more than half the requirements stated in the deal, which resulted in Snapchat suing him for breaching his contract.

Other common errors include influencers mistakenly posting written instructions from the company behind their campaign in their paid posts, or forgetting to disclose that their posts or videos are an advertisement.

Shady products and bots

One of the possible reasons for the occasional lack of results from influencer campaigns might be due to the prevalence of bots on the platform.

The large amount of money available for influencers to earn from brands has made many aspiring influencers turn to fraudulent solutions to artificially boost their following.

According to a study conducted using Social Chain’s bot-scanning tool across 10,000 well-known profiles, 25% of influencers have paid for fake followers from illegal bot farms.

The nature of social media systems means that users with smaller followings – or “micro-influencers” – cannot earn the large paychecks of bigger celebrities, but are perfectly-poised to exploit multi-layer-marketing scams by convincing their followers to sign up.

Pyramid schemes and other scams are relatively standard throughout social media, but it is only the beginning of inappropriate and illegal influencer behaviour on the platform.

Last year, Floyd Mayweather and DJ Khaled were sued by victims of a cryptocurrency scam called Centra Tech.

Both Mayweather and DJ Khaled were paid to endorse the scam on social media, resulting in a heavy backlash against the influencers for aligning with the fraudulent ICO.

Bad behaviour and regulation

Some influencers may endorse illegal products, fail to disclose adverts, or fraudulently inflate their follower numbers, but others occasionally just exhibit behaviour which no company would want associated with its products.

For example, YouTube influencer Logan Paul once published a video of a dead body hanging from a tree in Japan’s “Suicide Forest”, and soon afterwards followed this up with a video of himself shooting dead rats with a taser.

Tales of social media influencers engaging in similar behaviour, such as being arrested for throwing chairs off skyscrapers or for laundering money, are also relatively common.

These risks will always be present when companies endorse celebrities by naming them a “brand ambassador”, but the major problem with influencer marketing is the lack of regulation around the subject.

Many paid YouTube videos, Instagram posts, and tweets are still not disclosed as advertisements, and this has the potential to result in legal consequences or the alienation of the influencer’s following.

Once global advertising regulations have evolved to properly account for the influencer marketing model, companies could benefit greatly from directing their products at targeted audiences through clearly-disclosed advertisements.

The return on investment for some influencer marketing campaigns may be projected to be much higher, but the lack of regulation around the practice, the proliferation of scams, and the widespread use of illegal bots muddy the waters for potential advertisers.