That didn’t slow down advertisers’ thirst for an effective way to covertly raise the profile of their brand in the eyes of consumers. Average payment rates only continued to soar, especially after influencers started to retain agents and managers. Today, influencers are all over social media platforms like Instagram, YouTube, TikTok, Twitch, Tumblr, and Snapchat, and sponsored content has become so ubiquitous that some platforms, like Instagram, now have built-in tools to help influencers disclose and promote their paid partnerships in Stories or feed posts.
The digital marketplace model pioneered by PayPerPost is booming, with thousands of companies now vying to play matchmaker between brands and content creators to craft the perfect #ad. Grapevine and Famebit are two of the most popular. Famebit, which connects YouTubers and Instagram users with sizable followings to companies interested in sponsored content, took off in 2016 after it was purchased by YouTube. The company has since integrated Famebit into its platform, making it easier for content creators looking to monetize their YouTube accounts to find an ad campaign that aligns with their interests. It seems like only a matter of time before Instagram attempts something similar.
On YouTube and Instagram, product placement deals are now common, as are the use of affiliate marketing links and sponsored coupon codes. Popular YouTuber Sanders Kennedy, who chronicles drama in the influencer world, told WIRED that a brand once offered him a couple thousand dollars to place a beverage on his desk while filming a video. A 2018 WIRED investigation into the influencer marketing industry found that payouts increase if the influencer tags or shouts out the brand specifically, but covert endorsements are often preferred.
Influencers like Luka Sabbat, a model-turned-actor with two million followers on Instagram, can charge upwards of $40,000 to promote products in story and feed posts.The cost of a single promotional photo posted by Instagram influencer with a million followers starts at $10,000. YouTube is more expensive. A video from a YouTuber with 3 million subscribers will cost at least $40,000. Influencers charge up to $10,000 to $30,000 more to post a negative review of a company’s competitor, the investigation found.
Influencer payout rates have risen so quickly that advertisers that used to be some of the industry’s biggest advocates now feel priced out of the market. Marlena Stell, a popular beauty influencer and entrepreneur, relied on influencers to promote her cult cosmetics brand Makeup Geek since its launch in 2011. However, she cut back on the practice in 2018, telling WIRED that content creators had begun to regularly demand $50,000 to $60,000 per video.
These prices are a function of the fact that, online, value is quantifiable. Or at least it’s supposed to be. The worth of an idea, person, movement, or meme is based on how many likes, views, clicks, and shares it has. An idea expressed in a tweet that garners thousands of likes seems inherently more valuable and widely accepted than one with four. An Instagram user with tens of thousands of followers is assumed to have an audience of that many real people, and a YouTube video with millions of views is thought to have captured the attention of millions of actual viewers. But those interactions can easily be bought.
That an influencer’s potential earnings are directly linked to their reach has come as a major boon for fake engagement marketplaces, where key metrics like followers, views, and likes can be purchased anonymously online for cheap. As the influencer marketing industry grows increasingly overheated, with more and more brands getting onboard each quarter, the problems posed by rampant engagement fraud have only worsened. According to cybersecurity firm Cheq, influencer marketing fraud is projected to cost brands $1.3 billion in 2019 alone.
Which, of course, has led to the rise of influencer fraud detectors. Some companies rely on human investigators to suss out fake or inflated accounts, while others use proprietary programs designed to spot signs of fakery, but it’s largely a cat and mouse game. One of the simplest tricks used by industry experts to tell whether an Instagram influencer padded their stats—comparing the amount of likes per post to the influencer’s follower count—won’t be possible if Instagram goes ahead with its plans to do away with public like counts. (Instagram, for its credit, hopes that getting rid of like counts will disincentivize fake engagement peddling more generally, but that seems unlikely.)
A return to a less quantifiable era of influence may seem like a loss, but if anything it’s the opposite. Trust, ultimately, is unquantifiable. And perhaps in the absence of futile attempts to assess it, gooey amorphous authenticity will reign once more.
Learn More
Inside the Pricey War to Influence Your Instagram Feed When Sahara Lotti started her lash extensions company, Lashify, in 2017, she didn’t know what she was getting herself into. It wasn’t making and selling fake lashes that stumped her—she was more than prepared for that—but rather the bizarre and shadowy industry that seemed to envelop her. In interviews, more than a dozen people involved in influencer marketing expressed concerns over the ethics of the burgeoning industry, where brands routinely shell out well over $60,000 in exchange for one video review—or upwards of $85,000 to publicly disparage a competitor’s product.
When Influencers Switch Platforms—and Bare It All On Instagram, an influencer is helping sell products, essentially to add a degree of cool to, say, sunglasses or dietary supplements. On OnlyFans, influencers are themselves the product. Partnerships and #sponcon can lead to considerable paydays, but there now exists an additional source of revenue with the rise of bare-all subscription fandom. In front of a camera, and sometimes with multiple partners, they are no longer just influencers but digital sex deities.
Fighting Instagram’s $1.3 Billion Problem—Fake Followers As influencers strive for ever-higher engagement numbers, the battle between fake followers and fake-follower-detection tools is turning into an arms race. Not being rubes, influencer economy participants know that signing a contract isn’t enough to certify continuous truthfulness. Online tricks evolve like Pokémon, though, and fake followers are getting much harder to identify.
Colleges Need Influencers, but Do Influencers Need College? Colleges try to leverage the social media savvy of their students with “social media ambassador” programs that help them advertise to prospective new students, raise the schools’ profiles, and educate their current students about school programs. And for some influencers, college can be a windfall, landing them brand deals to market dorm furnishings, Victoria’s Secret underwear, and tooth-straightening solutions to their fellow students. For others, college just gets in the way of their real passion.
Byeeeee, Logan Paul: Brands Prefer ‘Micro Influencers’ Now Endorsements are no longer the sole domain of the broadly popular megawatt star. Instead, companies want to work with the smaller, more niche internet personalities they’re calling “micro influencers”—generally speaking, people with followings of about 50,000. Limiting the scope of a potential scandal is only one of the benefits of working with a micro influencer. Analysts argue that micro influencers’ intimate, engaged communities are more likely to trust and buy what the influencer recommends.
YouTube and Pinterest Influencers Almost Never Disclose Marketing Relationships Research from Princeton University indicates that the vast majority of affiliate marketing relationships go undisclosed by influencers on platforms like YouTube and Pinterest. The vast majority of disclosures that the Princeton researchers did find don’t even abide by FTC guidelines. In 2013, the agency began requiring that affiliate links embedded within product reviews include a disclosure.
Last updated December 3, 2019.
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Depending on who you ask, blockchains are either the most important technological innovation since the internet or a solution looking for a problem.
The original blockchain is the decentralized ledger behind the digital currency bitcoin. The ledger consists of linked batches of transactions known as blocks (hence the term blockchain), and an identical copy is stored on each of the roughly 60,000 computers that make up the bitcoin network. Each change to the ledger is cryptographically signed to prove that the person transferring virtual coins is the actual owner of those coins. But no one can spend their coins twice, because once a transaction is recorded in the ledger, every node in the network will know about it.
The idea is to both keep track of how each unit of the virtual currency is spent and prevent unauthorized changes to the ledger. The upshot: No bitcoin user has to trust anyone else, because no one can cheat the system.
Other digital currencies have imitated this basic idea, often trying to solve perceived problems with bitcoin by building new cryptocurrencies on new blockchains. But advocates have seized on the idea of a decentralized, cryptographically secure database for uses beyond currency. Its biggest boosters believe blockchains can not only replace central banks but usher in a new era of online services that would be impossible to censor. These new-age apps, advocates say, would be more answerable to users and outside the control of internet giants like Google and Facebook.
Unless, of course, Facebook runs away with the idea itself. In June, Facebook announced Libra, a new blockchain that will support a digital currency. Unlike the thousands of anybodys who run Bitcoin nodes, it will be controlled by an association comprised of just 100 companies and NGOs. Libra is certainly a challenge to central banks, not least because it’s a privately controlled monetary system that will span the globe. But replacing government with corporations is not exactly the revolution that enthusiasts imagined blockchain would bring. So far, the crypto community is divided on whether Libra is a good thing. Some see Facebook’s effort as a corruption of a technology designed to ensure that you don’t need to trust your fellow users—or any central authority. Others are celebrating it as the moment that blockchain goes mainstream.
Other so-called “private” blockchains, like Libra, are growing in popularity. Big financial services companies, including JP Morgan and the Depository Trust & Clearing Corporation, are experimenting with blockchains and blockchain-like technologies to improve the efficiency of trading stocks and other assets. Traders buy and sell stocks rapidly using current technology, of course, but the behind-the-scenes process of transferring ownership of those assets can take days. Some technologists believe blockchains could help with that.
Blockchains also have potential applications in the seemingly boring world of corporate compliance. After all, storing records in an immutable ledger is a pretty good way to assure auditors that those records haven’t been tampered with. This might be good for more than just catching embezzlers or tax cheats. Walmart, for example, is using an IBM-developed blockchain to track its supply chain, which could help it trace the source of food contaminants. Many other experiments have emerged: Voting on the blockchain. Land records. Used cars. Real estate. Streaming content. Hence the phrase “xxx on the blockchain” as a catch-all for the enduring hype cycle. The question is, if one organization (say, Walmart) has control of the data, did it really need blockchain at all?
It’s too early to say which experiments will stick. But the idea of creating tamper-proof databases has captured the attention of everyone from anarchist techies to staid bankers.
The First Blockchain
The original bitcoin software was released to the public in January 2009. It was open source software, meaning anyone could examine the code and reuse it. And many have. At first, blockchain enthusiasts sought to simply improve on bitcoin. Litecoin, another virtual currency based on the bitcoin software, seeks to offer faster transactions.
One of the first projects to repurpose the bitcoin code to use it for more than currency was Namecoin, a system for registering “.bit” domain names. The traditional domain-name management system—the one that helps your computer find our website when you type wired.com—depends on a central database, essentially an address book for the internet. Internet-freedom activists have long worried that this traditional approach makes censorship too easy, because governments can seize a domain name by forcing the company responsible for registering it to change the central database. The US government has done this several times to shut sites accused of violating gambling or intellectual-property laws.
Namecoin tries to solve this problem by storing .bit domain registrations in a blockchain, which theoretically makes it impossible for anyone without the encryption key to change the registration information. To seize a .bit domain name, a government would have to find the person responsible for the site and force them to hand over the key.
In 2013, a startup called Ethereum published a paper outlining an idea that promised to make it easier for coders to create their own blockchain-based software without having to start from scratch, without relying on the original bitcoin software. In 2015 the company released its platform for building “smart contracts,” software applications that can enforce an agreement without human intervention. For example, you could create a smart contract to bet on tomorrow’s weather. You and your gambling partner would upload the contract to the Ethereum network and then send a little digital currency, which the software would essentially hold in escrow. The next day, the software would check the weather and then send the winner their earnings. A number of “prediction markets” have been built on the platform, enabling people to bet on more interesting outcomes, such as which political party will win an election.
So long as the software is written correctly, there’s no need to trust anyone in these transactions. But that turns out to be a big catch. In 2016, a hacker made off with about $50 million worth of Ethereum’s custom currency intended for a democratized investment scheme where investors would pool their money and vote on how to invest it. A coding error allowed a still unknown person to make off with the virtual cash. Lesson: It’s hard to remove humans from transactions, with or without a blockchain.
Depending on who you ask, blockchains are either the most important technological innovation since the internet or a solution looking for a problem.
The original blockchain is the decentralized ledger behind the digital currency bitcoin. The ledger consists of linked batches of transactions known as blocks (hence the term blockchain), and an identical copy is stored on each of the roughly 60,000 computers that make up the bitcoin network. Each change to the ledger is cryptographically signed to prove that the person transferring virtual coins is the actual owner of those coins. But no one can spend their coins twice, because once a transaction is recorded in the ledger, every node in the network will know about it.
The idea is to both keep track of how each unit of the virtual currency is spent and prevent unauthorized changes to the ledger. The upshot: No bitcoin user has to trust anyone else, because no one can cheat the system.
Other digital currencies have imitated this basic idea, often trying to solve perceived problems with bitcoin by building new cryptocurrencies on new blockchains. But advocates have seized on the idea of a decentralized, cryptographically secure database for uses beyond currency. Its biggest boosters believe blockchains can not only replace central banks but usher in a new era of online services that would be impossible to censor. These new-age apps, advocates say, would be more answerable to users and outside the control of internet giants like Google and Facebook.
Unless, of course, Facebook runs away with the idea itself. In June, Facebook announced Libra, a new blockchain that will support a digital currency. Unlike the thousands of anybodys who run Bitcoin nodes, it will be controlled by an association comprised of just 100 companies and NGOs. Libra is certainly a challenge to central banks, not least because it’s a privately controlled monetary system that will span the globe. But replacing government with corporations is not exactly the revolution that enthusiasts imagined blockchain would bring. So far, the crypto community is divided on whether Libra is a good thing. Some see Facebook’s effort as a corruption of a technology designed to ensure that you don’t need to trust your fellow users—or any central authority. Others are celebrating it as the moment that blockchain goes mainstream.
Other so-called “private” blockchains, like Libra, are growing in popularity. Big financial services companies, including JP Morgan and the Depository Trust & Clearing Corporation, are experimenting with blockchains and blockchain-like technologies to improve the efficiency of trading stocks and other assets. Traders buy and sell stocks rapidly using current technology, of course, but the behind-the-scenes process of transferring ownership of those assets can take days. Some technologists believe blockchains could help with that.
Blockchains also have potential applications in the seemingly boring world of corporate compliance. After all, storing records in an immutable ledger is a pretty good way to assure auditors that those records haven’t been tampered with. This might be good for more than just catching embezzlers or tax cheats. Walmart, for example, is using an IBM-developed blockchain to track its supply chain, which could help it trace the source of food contaminants. Many other experiments have emerged: Voting on the blockchain. Land records. Used cars. Real estate. Streaming content. Hence the phrase “xxx on the blockchain” as a catch-all for the enduring hype cycle. The question is, if one organization (say, Walmart) has control of the data, did it really need blockchain at all?
It’s too early to say which experiments will stick. But the idea of creating tamper-proof databases has captured the attention of everyone from anarchist techies to staid bankers.
The First Blockchain
The original bitcoin software was released to the public in January 2009. It was open source software, meaning anyone could examine the code and reuse it. And many have. At first, blockchain enthusiasts sought to simply improve on bitcoin. Litecoin, another virtual currency based on the bitcoin software, seeks to offer faster transactions.
One of the first projects to repurpose the bitcoin code to use it for more than currency was Namecoin, a system for registering “.bit” domain names. The traditional domain-name management system—the one that helps your computer find our website when you type wired.com—depends on a central database, essentially an address book for the internet. Internet-freedom activists have long worried that this traditional approach makes censorship too easy, because governments can seize a domain name by forcing the company responsible for registering it to change the central database. The US government has done this several times to shut sites accused of violating gambling or intellectual-property laws.
Personal data is also used by artificial intelligence researchers to train their automated programs. Every day, users around the globe upload billions of photos, videos, text posts, and audio clips to sites like YouTube, Facebook, Instagram, and Twitter. That media is then fed to machine learning algorithms, so they can learn to “see” what’s in a photograph or automatically determine whether a post violates Facebook’s hate-speech policy. Your selfies are literally making the robots smarter. Congratulations.
The History of Personal Data Collection
Humans have used technological devices to collect and process data about the world for thousands of years. Greek scientists developed the “first computer,” a complex gear system called the Antikythera mechanism, to trace astrological patterns as far back as 150 BC. Two millennia later, in the late 1880s, Herman Hollerith invented the tabulating machine, a punch card device that helped process data from the 1890 United States Census. Hollerith created a company to market his invention that later merged into what is now IBM.
By the 1960s, the US government was using powerful mainframe computers to store and process an enormous amount of data on nearly every American. Corporations also used the machines to analyze sensitive information including consumer purchasing habits. There were no laws dictating what kind of data they could collect. Worries over supercharged surveillance soon emerged, especially after the publication of Vance Packard’s 1964 book, The Naked Society, which argued that technological change was causing the unprecedented erosion of privacy.
The next year, President Lyndon Johnson’s administration proposed merging hundreds of federal databases into one centralized National Data Bank. Congress, concerned about possible surveillance, pushed back and organized a Special Subcommittee on the Invasion of Privacy. Lawmakers worried the data bank, which would “pool statistics on millions of Americans,” could “possibly violate their secret lives,” The New York Times reported at the time. The project was never realized. Instead, Congress passed a series of laws governing the use of personal data, including the Fair Credit Reporting Act in 1970 and the Privacy Act in 1974. The regulations mandated transparency but did nothing to prevent the government and corporations from collecting information in the first place, argues technology historian Margaret O’Mara.
Toward the end of the 1960s, some scholars, including MIT political scientist Ithiel de Sola Pool, predicted that new computer technologies would continue to facilitate even more invasive personal data collection. The reality they envisioned began to take shape in the mid-1990s, when many Americans started using the internet. By the time most everyone was online, though, one of the first privacy battles over digital data brokers had already been fought: In 1990, Lotus Corporation and the credit bureau Equifax teamed up to create Lotus MarketPlace: Households, a CD-ROM marketing product that was advertised to contain names, income ranges, addresses, and other information about more than 120 million Americans. It quickly caused an uproar among privacy advocates on digital forums like Usenet; over 30,000 people contacted Lotus to opt out of the database. It was ultimately canceled before it was even released. But the scandal didn’t stop other companies from creating massive data sets of consumer information in the future.
Several years later, ads began permeating the web. In the beginning, online advertising remained largely anonymous. While you may have seen ads for skiing if you looked up winter sports, websites couldn’t connect you to your real identity. (HotWired.com, the online version of WIRED, was the first website to run a banner ad in 1994, as part of a campaign for AT&T.) Then, in 1999, digital ad giant DoubleClick ignited a privacy scandal when it tried to de-anonymize its ads by merging with the enormous data broker Abacus Direct.
Privacy groups argued that DoubleClick could have used personal information collected by the data broker to target ads based on people’s real names. They petitioned the Federal Trade Commission, arguing that the practice would amount to unlawful tracking. As a result, DoubleClick sold the firm at a loss in 2006, and the Network Advertising Initiative was created, a trade group that developed standards for online advertising, including requiring companies to notify users when their personal data is being collected.
But privacy advocates’ concerns eventually came true. In 2008, Google officially acquired DoubleClick, and in 2016 it revised its privacy policy to permit personally-identifiable web tracking. Before then, Google kept its DoubleClick browsing data separate from personal information it collected from services like Gmail. Today, Google and Facebook can target ads based on your name—exactly what people feared DoubleClick would do two decades ago. And that’s not all: Because most people carry tracking devices in their pockets in the form of smartphones, these companies, and many others, can also follow us wherever we go.
By the 1960s, the US government was using powerful mainframe computers to store and process an enormous amount of data on nearly every American. Corporations also used the machines to analyze sensitive information including consumer purchasing habits. There were no laws dictating what kind of data they could collect. Worries over supercharged surveillance soon emerged, especially after the publication of Vance Packard’s 1964 book, The Naked Society, which argued that technological change was causing the unprecedented erosion of privacy.
The next year, President Lyndon Johnson’s administration proposed merging hundreds of federal databases into one centralized National Data Bank. Congress, concerned about possible surveillance, pushed back and organized a Special Subcommittee on the Invasion of Privacy. Lawmakers worried the data bank, which would “pool statistics on millions of Americans,” could “possibly violate their secret lives,” The New York Timesreported at the time. The project was never realized. Instead, Congress passed a series of laws governing the use of personal data, including the Fair Credit Reporting Act in 1970 and the Privacy Act in 1974. The regulations mandated transparency but did nothing to prevent the government and corporations from collecting information in the first place, argues technology historian Margaret O’Mara.
Toward the end of the 1960s, some scholars, including MIT political scientist Ithiel de Sola Pool, predicted that new computer technologies would continue to facilitate even more invasive personal data collection. The reality they envisioned began to take shape in the mid-1990s, when many Americans started using the internet. By the time most everyone was online, though, one of the first privacy battles over digital data brokers had already been fought: In 1990, Lotus Corporation and the credit bureau Equifax teamed up to create Lotus MarketPlace: Households, a CD-ROM marketing product that was advertised to contain names, income ranges, addresses, and other information about more than 120 million Americans. It quickly caused an uproar among privacy advocates on digital forums like Usenet; over 30,000 people contacted Lotus to opt out of the database. It was ultimately canceled before it was even released. But the scandal didn’t stop other companies from creating massive data sets of consumer information in the future.
Several years later, ads began permeating the web. In the beginning, online advertising remained largely anonymous. While you may have seen ads for skiing if you looked up winter sports, websites couldn’t connect you to your real identity. (HotWired.com, the online version of WIRED, was the first website to run a banner ad in 1994, as part of a campaign for AT&T.) Then, in 1999, digital ad giant DoubleClick ignited a privacy scandal when it tried to de-anonymize its ads by merging with the enormous data broker Abacus Direct.
Privacy groups argued that DoubleClick could have used personal information collected by the data broker to target ads based on people’s real names. They petitioned the Federal Trade Commission, arguing that the practice would amount to unlawful tracking. As a result, DoubleClick sold the firm at a loss in 2006, and the Network Advertising Initiative was created, a trade group that developed standards for online advertising, including requiring companies to notify users when their personal data is being collected.
But privacy advocates’ concerns eventually came true. In 2008, Google officially acquired DoubleClick, and in 2016 it revised its privacy policy to permit personally-identifiable web tracking. Before then, Google kept its DoubleClick browsing data separate from personal information it collected from services like Gmail. Today, Google and Facebook can target ads based on your name—exactly what people feared DoubleClick would do two decades ago. And that’s not all: Because most people carry tracking devices in their pockets in the form of smartphones, these companies, and many others, can also follow us wherever we go.
The Future of Personal Data Collection
Personal information is currently collected primarily through screens, when people use computers and smartphones. The coming years will bring the widespread adoption of new data-guzzling devices, like smart speakers, censor-embedded clothing, and wearable health monitors. Even those who refrain from using these devices will likely have their data gathered, by things like facial recognition-enabled surveillance cameras installed on street corners. In many ways, this future has already begun: Taylor Swift fans have had their face data collected, and Amazon Echos are listening in on millions of homes.
We haven’t decided, though, how to navigate this new data-filled reality. Should colleges be permitted to digitally track their teenage applicants? Do we really want health insurance companies monitoring our Instagram posts? Governments, artists, academics, and citizens will think about these questions and plenty more.
And as scientists push the boundaries of what’s possible with artificial intelligence, we will also need to learn to make sense of personal data that isn’t even real, at least in that it didn’t come from humans. For example, algorithms are already generating “fake” data for other algorithms to train on. So-called deepfake technology allows propagandists and hoaxers to leverage social media photos to make videos depicting events that never happened. AI can now create millions of synthetic faces that don’t belong to anyone, altering the meaning of stolen identity. This fraudulent data could further distort social media and other parts of the internet. Imagine trying to discern whether a Tinder match or the person you followed on Instagram actually exists.
