A license to bill
September 20, 2019
How the UAE Influencer License for business can affect the Global Digital Market
Nowhere was the meteoric rise of the influencer market felt more than the United Arab Emirates, especially the sleek, ultra-modern, luxury shopping destination that is Dubai. Fashion connoisseurs, beauty products trendsetters and just regular run-of-the-catwalk models seized the opportunity handed to them by social media and became internet superstars, raking in millions in income. And rake they did.
It is estimated that an influencer operating in UAE charges an average of $1,000 – $5,000 per post, whereas the heavy hitters (such as the youngest member of the Kardashian klan, Kylie Jenner) are reportedly charging $1 million for a single post.
But excess wealth and corruption go together like a concealer pencil and a contouring brush. Media companies and clients complained over lack of accountability, influencers going back on agreements and the worst offender of them all; influencers with inflated follower numbers, the result of bots and buying fake followers.
Seeing the chaos, the UAE government decided to put a stop to it. Effective since July, influencers based on the UAE need to secure an e-media license to be able to operate and charge companies for their services. The move sparked furious debate, with some praising the regulation as it will usher an era of transparency in the influencer world while others saw it as the establishment’s attempt to regulate what is supposed to be unregulated and spontaneous.
But while UAE is coping with influencer fraud that way, how will that affect the global market?
Time to go to the vet (not that kind)
While it is highly unlikely that other governments will go as far as force influencers to secure licenses from the state, the complaints expressed by companies are not without merit and should be addressed. Influencer fraud runs rampant and companies can easily fall victim to it. This is an extremely common problem, as shown by the case of the agency that went the meta way and actually manufactured non-existent influencers, bought followers and used stock photos for their accounts and actually managed to get deals for them.
The main reason for using influencers to promote products is brand awareness and reaching new audiences – (especially GenZers) who only engage online and don’t have the time for traditional media – a purpose rendered null if the influencer hired has inflated follower numbers. There are ways for checking for that, but companies simply do not have time to wade through the sea of influencers and properly vet them.
Ad agencies know how to determine an influencer’s impact and it rarely has to do with follower numbers. Engagement, activity, leadership, and authenticity are four major factors, that are easily evaluated if one knows how to go about it. Hiring an experienced agency that can properly vet potential influencers and help pair your product or company with one that can represent your brand effectively, is a surefire way to avoid pitfalls. Any attempt to regulate the market is likely to steer clients towards respectable agencies that have the necessary tools to deliver results.
Partners, in time
While some influencers in the UAE did go ahead and applied for a license themselves, the majority went a different way. They either established companies -thus being subjected to all company regulations- or simply partnered up with an ad agency. Since clients would now have to go through an ad agency to get the services of a particular influencer, there is a far greater degree of transparency and accountability. The influencer – ad agency relationship is a symbiotic one. The ad agency lends its legitimacy to the influencer and in turn, gets a way to tap into the money spent on influencer marketing. An estimate of $3 billion was spent on influencer marketing in 2017, expected to double in 2020. With so much revenue up for grabs, it was only a matter of time before ad agencies and influencers, once rivals, decided to join forces.
Micro in influence, macro in impact
Introducing regulation and forcing influencers to go through legal hoops might be a minor inconvenience with those who have millions of followers, but is a career stopper for most micro-influencers. Finding the ideal micro-influencer has become the Holy Grail for marketers. Identifying an influencer, a true influencer, that might not have the numbers but has a dedicated audience and high metrics of engagement comes with a far cheaper price tag. Without the leverage of international fame, most micro-influencers are local relatively unknown to the public at large and thus cost way less for promotion. High levels of engagement and a very specific audience can drive up a company’s ROI through the roof. Ad agencies now have dedicated departments identifying these diamonds in the rough, keeping them in reserve for when the ideal client comes along. The whole industry is now catching up to the overcommercialization of the big influencer accounts, opting instead to partner with micro-influencers who are far more impactful. One of the most frequent complaints by people opposing the UAE regulation is that applying for a license is costly and thus stifles the micro-influencer scene, pushing more and more to actively seek out partnerships with respectable agencies.
The fact and the furious
In a world of fame, controversy is what fans the flames of relevancy. Influencers are prone to diva behaviour and outrageous faux-pas, such as using a World War 2 concentration camp as a photo op for cutsie pics. Much like Hollywood superstars, mega influencers are prone to erratic behaviour and outlandish demands. While this could turn out well both for the influencer (the old creed still stands, there is no such thing as bad publicity) and the company that paid him/her but it spells bad news for the smaller companies that can’t afford to associate their brand with someone who is unpredictable. Not to mention that influencers may falsify their metrics to show a campaign being far more successful than it really was.
The UAE regulation and what may come off of it will put an end to that. In with the data, out with the drama. Being forced to work at a more professional level by either setting up a company or working with an agency, means that influencers will be subjected to a much more vigorous vetting process. Proper metrics and actual campaign results that can be broken down and analysed by marketers will be the norm, allowing the client to get more bang for his buck when using influencers.
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