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In the article "Why Brands Should Tread Carefully With Influencer Marketing in 2023", Scott Clark highlights the impacts influencers can have on the reputation of a brand. While influencer marketing is a frequently used tactic that can have many positive effects, there are many risks companies incur while using influencers to promote their product. Clark names numerous brands that had issues with influencer marketing, such as Adidas with Kanye West, Pepsi with Kendall Jenner, Maker Studios with PewDiePie, etc., and underlines the nature of cancel culture and how it can immediately affect the brand's image. The author highlights the importance of picking 'appropriate' influencers to be the 'face' of the brand, as well as going about branded content in a way that allows for a sense of relatability and authenticity. Influencer marketing can be a great way to increase brand exposure, but it's also a strategy that needs to be well-thought-out to prevent irreparable damage.

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Tread Carefully With Influencer Marketing

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When a social media influencer goes wrong, the connection to a brand could damage trust.

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Another article that connects to this topic is titled "These Influencer Marketing Tools Can Maximize Your ROI," and the author, John Hall, explains how the digital field has expanded marketing tactics. The use of influencer marketing has completely changed the industry, and choosing the right influencer can lead to a successful marketing campaign; however, it is costly. Additionally, Hall mentions that the use of new AI technologies can help analyze aspects of influencer marketing campaigns and decide which are successful. Influencer marketing is a powerful method to reach a consumer in a personable way, but it's important to consider each component of the campaign to maximize success.

Hall, J. (2024, August 27). These influencer marketing tools can maximize your roi. Forbes

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These Influencer Marketing Tools Can Maximize Your ROI

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Maximizing your ROI just got easier. Discover how AI-powered tools are revolutionizing influencer marketing, allowing you to optimize your strategy, enhance your content, and track performance.

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Scott Clark's article highlights possible positive and negative effects of influencer marketing but emphasizes the importance of properly vetting influencers to prevent implications of 'cancel culture'.

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As seen through Scott Clarks's analysis, companies should be carefully considering the possible and negative effects of influencer marketing before proceeding. There are inherent risks taken when picking a person to be the face of the brand, and companies have to weigh those potential risks and decide if the influencers enhance the brand's mission and desired outcome.

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This graph represents the impact of cancel culture on influencers. In this scenario, demand and supply both shift to the left and decrease.

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Cancel culture can lead to a decrease in influencer marketing for both quantity demanded and quantity supplied. When looking at demand, companies will less frequently seek out an influencer to be the face of their brand if they have been involved in a scandal or controversy. For example, the article mentions when Pepsi partnered with Kendall Jenner, the public deemed their campaign insensitive and superficial. In turn, Pepsi was not looking for more influencers at that time. Moving on to supply, as more influencers get canceled and 'fumble' their career, the less there will be for promotions and endorsements. The impact on price isn't mentioned within the article and is hard to measure for the whole market. However, on an individual level, an influencer on their downfall would surely not be receiving as high of a commission anymore. All in all, our model's prediction aligns well with the points mentioned by the author.

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Brands begin by taking the cost benefit principle into account, asking themselves if they are open to the heightened visibility and increased sales against the risk of negative publicity. An example that was discussed in the article, “Why Brands Should Tread Carefully With Influencer Marketing in 2023” by Scott Clark was the partnership between Adidas and Kanye West. With Kanye’s large following, he initially provided immense value to Adidas but due to his anti semitic tirades Adidas ended up cutting ties with him. This example clearly shows how “influencer marketing can be risky” when the influencers actions damage trust and reputation. As Christy Pyrz pointed out, "Cancel culture not only impacts the influencer, but everyone around them as well — including brands." This highlights the high cost of such partnerships when things go wrong.

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Additionally, as discussed in class, the interdependence principle is a key theme in this article. When a brand chooses an influencer to partner with, its reputation becomes directly tied to the influencer's actions. So, if an influencer has poor behavior, the brand becomes damaged as well. For example, when influencers such as Kanye West expose them to “cancel culture” brands have to quickly disassociate from them to protect their reputation. The article highlights how, in such situations, brands must "tread lightly" because their success or failure is often tied to the influencer’s behavior.

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Furthermore, the market saturation of influencers has increased the supply, leading to brands becoming more selective. Waseem Ballou pointed out that brands are now seeking influencers who carefully select their partnerships, avoiding those who endorse products indiscriminately, which can lower the value of their influence.

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Influencers risk appearing inauthentic not only when partnering with too many brands but also when posting too often for a brand. The Federal Trade Commission (FTC) has expanded guidelines for paid posts stating that disclosure must be present at the beginning of videos and before the "read more." By posting in excess about a specific brand or product with disclaimers, the influencer risks losing the sense of authenticity that connects them to their audience. Additionally, the proliferation of sponsored posts will drive influencers to have to create more content to balance their posts. Influencers need to carefully consider how to balance their authenticity and make sure they are meeting the FTC's standards when creating content.

Steinman, M. (2024, March 22). Social Media, Influencers, and Endorsements: An Excerpt from the Advertising Law Tool Kit. Venable LLP

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When looking at the Stanley Cups, Stanley has leveraged social media to break into a new market segment quickly. Stanley's Quencher was featured on The Buy Guide, which opened Stanley's leadership's eyes to a large segment of consumers that had been previously ignored. They also figured out they could launch limited products in partnership with various brands, making Stanley's collectibles. This has driven up business for Stanley, and in fact drove the Quencher specifically to levels that it would have never achieved.

Jansen. C. (2023, November 14). The rise of the Stanley tumbler: How a 110-year-old brand achieved viral success. RetailDive

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From a brand's perspective, influencers can be risky while helping them break into markets that cannot be penetrated through traditional advertising. For influencers, the risk lies in partnering with too many brands or partnering with a brand that does not feel authentic to their image; this can cause a dilution of their audience. Additionally, having too many paid posts causes them to have to create more content outside of paid posts. The biggest winners are brands that can identify appropriate influencers that reach consumers while not alienating the brand's customer base due to poor behavior, and the use of AI gives the brands the ability quickly navigate the influencers reach. For influencers, finding the right product that reflects their social media presence and resonates with their audience can pay off immensely.