Centres Of Excellence

To focus on new and emerging areas of research and education, Centres of Excellence have been established within the Institute. These ‘virtual' centres draw on resources from its stakeholders, and interact with them to enhance core competencies

Read More >>

Faculty

Faculty members at IIMB generate knowledge through cutting-edge research in all functional areas of management that would benefit public and private sector companies, and government and society in general.

Read More >>

IIMB Management Review

Journal of Indian Institute of Management Bangalore

IIM Bangalore offers Degree-Granting Programmes, a Diploma Programme, Certificate Programmes and Executive Education Programmes and specialised courses in areas such as entrepreneurship and public policy.

Read More >>

About IIMB

The Indian Institute of Management Bangalore (IIMB) believes in building leaders through holistic, transformative and innovative education

Read More >>

Influencer Marketing with Fake Followers

Abhinav Anand, Souvik Dutta and Prithwiraj Mukherjee
2022
Working Paper No
580
Body

Influencer marketing is a practice in which an advertiser pays a popular social media user (influencer) in exchange for brand endorsement. We develop a contract-theoretic model of an advertiser and an influencer. The influencer can inflate her publicly displayed follower count by buying fake followers, and can take a hidden action to legitimately increase her true number of followers. An imperfect audit can detect fraud, which imposes a high cost on the influencer. We show that the optimal contract exhibits high faking for influencers with intermediate follower counts, while faking levels are low for those with very small or very large true follower counts. Audits deter fraud only when accompanied by high penalties, but perversely, restitution paid to the advertiser encourage more fraud.

Key words
Digital marketing, social media, influencer marketing, fake followers, optimal control, contract theory, moral hazard.

Influencer Marketing with Fake Followers

Author(s) Name: Abhinav Anand, Souvik Dutta and Prithwiraj Mukherjee, 2022
Working Paper No : 580
Abstract:

Influencer marketing is a practice in which an advertiser pays a popular social media user (influencer) in exchange for brand endorsement. We develop a contract-theoretic model of an advertiser and an influencer. The influencer can inflate her publicly displayed follower count by buying fake followers, and can take a hidden action to legitimately increase her true number of followers. An imperfect audit can detect fraud, which imposes a high cost on the influencer. We show that the optimal contract exhibits high faking for influencers with intermediate follower counts, while faking levels are low for those with very small or very large true follower counts. Audits deter fraud only when accompanied by high penalties, but perversely, restitution paid to the advertiser encourage more fraud.

Keywords: Digital marketing, social media, influencer marketing, fake followers, optimal control, contract theory, moral hazard.