Joseph Lawlor, a New York-based intellectual property and advertising litigator at corporate law firm Haynes and Boone, says brands should be wary of embracing a Bloomberg 2020-style micro-influencer strategy.

The Michael Bloomberg 2020 presidential campaign has hired hundreds of individuals in California to post social media content supportive of the New York billionaire, as first reported by the Wall Street Journal. This strategy is an unorthodox method for distributing sponsored content at a scale previously unheard of.

Bloomberg’s strategy has already hit several roadblocks. Its quality control team has failed to prevent paid micro-influencers from making false postings on social media postings. 70 Bloomberg micro-influencers have been banned by Twitter outright. Brands will be wise to consider the significant compliance and PR costs before engaging in a micro-influencer campaign of this scale.

Brands are increasing their influencer marketing budgets at a swift pace, but they should be wary of engaging in a Bloomberg campaign-style social media campaign that relies on hundreds of micro-influencers. A lengthy brand activation utilizing micro-influencers may promise sales and engagement KPIs that excite a brand’s marketing team. However, running a months-long campaign that requires managing hundreds of micro-influencers posting both pre-written and unique content daily across several platforms requires a massive and expensive compliance program. A Bloomberg-style activation will rarely be a cost-effective use of a brand’s marketing dollars.

Brand guidelines
The prototypical influencer marketing campaign involves a brand that engages one, or a handful, of well-known influencers who typically each have more than 100,000 followers. Either the brand team or an outside agency ensures that the influencer’s posts meet brand guidelines and comply with relevant law. Brands also regularly engage micro-influencers, who typically have between 1,000 and 100,000 followers. Micro-influencers are generally engaged for brand activations that are aimed at niche markets where the influencer has a reputation that outpaces their follower count.

According to a 2019 Rakuten Marketing report, micro-influencers make up 36 per cent of global brand partnerships, compared to 30 per cent for high-tier celebrity influencers. Importantly, recent studies have shown that the engagement rate for micro-influencers can be 1.5-4x the rate for celebrity influencers.

The higher engagement rate of micro-influencers comes with the trade-off of significantly smaller follower counts. While a celebrity with 1m Instagram followers may only generate a 2 per cent engagement rate compared to a micro-influencer at 4 per cent, the celebrity influencer is generating much greater numbers of raw comments, likes, and shares.

The Bloomberg 2020 micro-influencer strategy represents a very public rollout of a new frontier in micro-influencer marketing. The Bloomberg team is hiring hundreds of micro-influencers in California, who tend to have no notable public reputation. Instead, the Bloomberg campaign is seeking out individuals with pedestrian online presences.

There may be some benefit to paying $2,500 a month to hundreds of individuals in a political campaign where the appearance of authentic grassroots support can lead to gains at the polls. This article does not address the legality of the Bloomberg campaign, which involves evaluating FEC regulations and social media Terms of Service that do not apply to typical brand-focused influencer activations.

Costs of compliance
Any brand that may consider hiring an army of micro-influencers should seriously consider the costs of compliance and their ability to oversee hundreds of inexperienced micro-influencers. It will be difficult for a brand to control two critical components of such a campaign in a cost-effective manner: proper disclosure and truth in advertising.

If an individual receives anything of value in return for posting social media content about a brand, the post must include a prominent disclosure alerting all viewers that it is advertising content. Disclosure rules on most social media platforms can be accomplished by placing “#ad” prominently in the posting.

However, disclosure in a Bloomberg-style campaign can be tricky for a few reasons. Inexperienced micro-influencers, like the individuals being paid by Bloomberg’s campaign, are unlikely to be familiar with the Federal Trade Commission rules regulating influencer marketing. An inexperienced user engaging in his or her first ever paid marketing campaign could easily forget to add “#ad” to their posts or even use terms like “spon” or “collab” that are generally disfavored.

According to the WSJ, the Bloomberg campaign is not advising its micro-influencers to disclose that their posts are advertising, and instead describes their effort as “a new form of political advertising rather than paid influencer content.” The campaign’s approach to disclosures has already led to the type of negative market reaction savvy brands scrupulously avoid.

Jerry Media
The Bloomberg campaign came under fire just last week, following a series of social media posts by Jerry Media that were revealed to be paid advertising for the Bloomberg 2020 campaign. These ads were intended to look like private DMs from the Bloomberg campaign to marketing firm Jerry Media asking the company to create a meme for Bloomberg that would rival the popular Bernie Sanders ‘Asking for Your Support’ meme.

While, these posts carried a tag that said, “Yes this is really sponsored by @mikebloomberg,” the entirety of the ad left it unclear whether it was simply a meta-meme or actual advertising. The fact that the ad carried such a long disclosure rather than the ubiquitous “#ad” only served to highlight this potential confusion. Ultimately, news outlets clarified that the Bloomberg campaign had in fact paid Jerry Media to run the ads.

In addition to ensuring that its micro-influencers provide proper disclosures, a brand also must work to ensure that its advertising is true. Contrary to some public misconception, an influencer who endorses a brand must actually use the product and only make truthful statements regarding the product. Thus, for example, it would be inappropriate for a paid micro-influencer to post to his or her social media that: “I will be voting for Mike Bloomberg in the 2020 Democratic Primary” if he is planning to vote for one of the other candidates. Similarly, a brand influencer cannot discuss experience with a product that they have not used or provide an endorsement of qualities of a product that is inconsistent with their honest opinions.

Generally, when a brand employs an influencer, the brand tracks the influencer’s social media postings for compliance (or engages an outside agency or law firm to do so) and sometimes provides the influencer with pre-written content to post. There will often be a discussion regarding the content of posts to ensure that they match the brand’s guidelines and the influencer’s honest opinions about the product.

Untenable tension
Running a large-scale micro-influencer campaign can create an untenable tension between the brand’s desire to provide pre-written content that meets its guidelines, and the requirement that all postings accurately state the influencer’s opinions and experience. Most brands will simply not have the bandwidth, nor will it be cost effective, to engage in detailed conversations with these micro-influencers to tweak pre-written content to match the influencer’s opinions. Thus, micro-influencers will either post pre-written content that, in some cases, will not be true, or will post content in their own words that does not meet the brand’s guidelines.

The Bloomberg campaign’s efforts highlight the difficulty in ensuring that micro-influencer advertising is truthful. According to the WSJ, Bloomberg’s approach will be to “suggest content for sharing and exert some control over the social-media outreach efforts.” The Bloomberg team will also have a “quality-control staff [to] verify that the organizers are posting appropriately.”

Bloomberg’s micro-influencers have routinely been reposting the stock text and links provided by the Bloomberg campaign according to the LA Times. While this practice may ensure compliance with brand guidelines, it does not encourage truthfulness. According to the LA Times, Bloomberg’s army of micro-influencers include “A vocal Bernie Sanders supporter. A Chicagoan with zero followers on Twitter. A dozen registered Republicans.”

The LA Times also detailed the postings of one Blomberg influencer who, after sending a paid message supportive of the candidate, quickly followed up with another message, “Please disregard, vote Bernie or Warren.”

Quality control
Bloomberg’s quality control team is clearly unable to keep up with the demands required to ensure compliance by its army of posters. More broadly, it does not seem practical, or an efficient use of a brand’s resources, to employ the sort of detailed quality-control that would be necessary to run an appropriate micro-influencer campaign at this scale that complies with the relevant regulations.

In a campaign with hundreds of micro-influencers, the failure to ensure proper disclosure and truthful advertising in even a small percentage of cases could be significant enough to earn the attention of the FTC in the US, and the equivalent regulator for campaigns in other countries. Thus, quality control would require a significant investment. The primary difficulty a brand would encounter running a Bloomberg-style micro-influencer campaign is that the compliance costs would more than likely dwarf the returns as measured by the brand’s KPIs.

It is possible to foresee a Bloomberg-style campaign working for a brand where the activation is limited in time and scope, such as a single post by each micro-influencer in order to get a brand trending. However, a full-fledged, months-long social media campaign of this type would require a significant investment in compliance resources to avoid FTC scrutiny and related public relations backlash.