Social media influencers place reputations at risk in FMCG sector

The vast majority of fast moving consumer goods companies have suffered reputation risks at hands of social media influencers, and a proportion of these on multiple occasions.

Still, nearly half of these firms plan to spend up to 50% of their marketing budget on social media influencers post-COVID-19.

This is among the findings of a study conducted by Kroll and Duff & Phelps, whose poll of over 900 marketing and brand managers within the FMCG sector highlights the reputational and financial impact of negative influencer experiences on the sector.

Some 25% of FMCG businesses across the UK, US, France, Germany, Ireland, Netherlands, Spain, Italy and the United Arab Emirates have suffered a £77,400 to £193,000 loss from a negative influencer experience.

Done right, 42% of UK FMCG businesses said their most successful influencer campaign increased sales by up to £770,000. Some of the best campaigns are thought to have generated five times that amount.

Benedict Hamilton, managing director in Kroll’s Business Intelligence and Investigations practice, said: “Companies spend years creating brands built on trust and loyalty, characteristics which are hard-won but can be quickly lost, and are difficult to regain. When a negative incident with an influencer occurs, the reputational damage that follows can have long-term commercial impacts. Companies need to do their due diligence and not just take an influencer at face value. We are seeing increasing demand from brands to investigate influencers’ online activity and identify potentially sensitive issues, including those posted many years ago, to allow brands to establish whether or not an influencer’s values match their own, and ensure they are making informed decisions about their influencer programmes.”

The report's authors say consumer devotion to digital devices during the pandemic has supercharged the influencer industry. During lockdown, two-thirds of FMCG companies have either maintained their influencer spending at pre-COVID-19 levels or increased it slightly, while nearly a fifth (19%) upped it significantly.

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