It is important to understand the ethics of influencer marketing, before you can decide whether to trust an influencer
According to the media investment company GroupM, influencer marketing is slated to be a Rs 900 crore market by the end of this year in India. What’s more, nearly two-thirds of the Indian population follow an influencer. When it comes to marketing dollars spent on famous personalities, only 27% goes towards celebrities. On the other hand, the majority of 73% goes towards influencer marketing! Accept it or not, influencers and hence influencer marketing is here to stay.
With so many influencers out there, the question is whether you should trust an influencer. Also, what are some of the things you need to keep in mind before you trust an influencer? For this, we first need to understand the ethical considerations of influencer marketing.
Ethics of influencers
Influencers enter into some sort of agreement with a brand that they are promoting. This could be monetary or non-monetary. It is only natural that readers should have the right to know of any such partnership an influencer has with a brand. Such disclosure augurs well for both the brand and for the influencer as it builds trust.
Several countries have brought in a set of guidelines that require influencers to make necessary disclosures for influencer marketing purposes. In May 2021, the Advertising Standards Council of India (ASCI) launched influencer marketing guidelines. The guidelines say the influencers need to be transparent in their disclosures when they are promoting a brand for commercial gain. Several influencers have already started complying with these guidelines.
It is important to understand that the guidelines stipulate that an influencer needs to disclose any partnership with a brand. This includes whether there is any material agreement between them. Such material connection is not just limited to monetary compensation, but also to anything of value. Plus, such disclosures need to be made clearly. The idea is that the reader or the viewer does not miss it and it is easy to understand. So, these can’t be mentioned in very small print or be hidden in hashtags.
Should you trust them?
Since an influencer influences you to buy a certain brand or avail a certain service, you need to be sure that you can trust an influencer. When it comes to financial influencers or finfluencers, that is even more important. This is because you would probably be learning and following their investment advice. Here are a few things to note when it comes to trusting influencers.
Don’t blindly go by the numbers
It is natural to assume that you could trust an influencer who has a large number of followers. But it may not always be true. However, a large following does not necessarily mean that you should trust an influencer.
Also, just because something shows up on Google may not be a sure-shot way of knowing whether you should trust an influencer. This is because what Google shows you depends on Search Engine Optimization (SEO) and using the right keywords. It may not always be because of good content. You should not blindly trust an influencer just because Google is ranking it high. However, you can always use Google to find out who are some of the most popular influencers. For example, a search for ‘top Instagram influencers in finance’ will throw up a list of famous influencers who use the Instagram channel and deal with finance topics.
Check the credentials of an influencer
Always check the credentials of the influencers. When you search for influencer synonyms, a couple of the synonyms that are thrown up are ‘maven’ and ‘authority’. This means that an influencer should be one who is an expert or an authority in a subject. It is for that reason that brands invest in influencer marketing.
In the case of a financial influencer, you would expect him to have some knowledge or understanding of finance at least. So, while he or she may not have an Ivy League degree, you would expect some degree of education and experience in finance. One simple way to find out is to check the person’s LinkedIn profile.
Do your own research
Do not to follow any advice on social media blindly. You should always do your research, even if something you find online piques your interest. For example, if you are investing in a stock, do your research on the company and based on your research decide whether you should invest in it or not. Remember, you should always invest based on your risk profile and your goals, and an investment that is right for someone else may not be right for you.
If you do not have the time or the expertise, always take professional advice. If you are investing in US stocks through Vested, you can invest through Vests, which comprise curated portfolios of stocks and for different risk profiles and are constructed with different themes or goals in mind.
Look for red flags
Whether you should trust an influencer may not be an easy question to answer. However, some red flags should warn you to never trust an influencer. When an influencer is using words or phrases like ‘double your money,’ ‘guaranteed return’, and so on, you should be suspicious that something is not right. The same goes for any get-rich schemes or tips to make money quickly. If you look a bit carefully, it is easy to stay away from clickbait content like this.
Also, looking at the content of an influencer, have a reasonably fair idea of whether the person has used and vetted a product he or she is reviewing and promoting. Also, if one is careful, one can distinguish between an honest review and praise for the sake of it. Remember, if what is promised is too good to be true, it often is. Remember, brands spend big dollars on influencer marketing, so you should always double check.
Trust your guts
In the end, it is up to you to analyze their profile and content and decide if you should trust what they are saying. Some influencers will try to be very transparent in what they are doing. If a post is an advertisement, they will disclose that. They would also explain the way sponsored content works in a disclaimer. Some may even go to the extent of sharing how much money they make. However, others may not be disclosing any information about any paid partnerships. When you are following any influencer, you may keep some of the above in mind. It always pays to listen to your gut instincts.
All in all, when looking for a financial influencer to follow, make sure that it is someone you can trust. After all, it is your hard-earned money.Â