Photo Credit: Google
It’s safe to say that this year’s Fyre Festival in the Bahamas – an event so atrociously planned and so fraudulent that it was literally canceled before it officially began – will go down as a cautionary tale of how NOT to do social media influencer marketing.
Fyre Festival as Ponzi scheme
In many ways, the marketing around the “ultra-luxury” Fyre Festival from the rapper Ja-Rule resembled a typical Ponzi scheme, in which the people who get in early – in this case, the mega-celebrities and the models with huge Instagram followings – make all the money, and all the people who come in later are the suckers.
In this case, an influencer like Kendall Jenner got paid a reported $250,000 to hype the event on social media. Other Instagram celebrities and models got paid $10,000 just for sending out a single Instagram post promoting the event. All told, there were 400-500 “Fyre Starters” who had the difficult job of lounging around in sexy outfits and telling people what a great “FOMO-inducing event” the Fyre Festival was going to be.
As a result, plenty of millennials took the bait and invested. Fyre Festival might not have been billed as the Woodstock of the current generation, but it was surely the next Coachella. It was supposed to feature luxury cabanas, meals catered by celebrity chefs, VIP events where people could hang out with famous musicians from groups like Blink-182, and, of course, lots of hot models on a beautiful beach.
What they got was quite different, of course: disaster relief tents instead of cabanas, and meals of bread and cheese served on styrofoam plates. In some cases, luggage was just dumped out of shipping containers. Chaos was rampant. This, all for the low-low price of just $1,500. In some cases, people paid $10,000 or more for packages to the event. And there was the option to pay $400,000 for a true VIP experience at the Fyre Festival.
Clearly, someone was making a lot of money. And as more money rolled in, there was more money to pay the influencers to produce even more posts. That’s why it was ultimately a Ponzi scheme – the more people who took the bait, the more money the promoters had to find additional suckers.
The new rules of the game for social media influencers
Of course, there’s nothing wrong with companies spending tens of thousands of dollars to promote an event. And there’s nothing wrong with hyping an event, or deploying a squad of social media influencers to hype the event for you. But none of the influencers ever disclosed that they were getting paid to hype the event. The Instagram posts never made it clear that they were making $10,000 for bringing in a bunch of suckers on this get-rich-quick-scheme. Even worse, many deleted their posts later to hide their potential guilt.
And that’s why it’s such a cautionary tale. This social media fiasco really could have happened to any brand or any company that relies on influencers to move product. In the world of blogging, for example, it’s customary to print a little notice at the end of any paid blog post, stating whether or not the blogger had been compensated for writing such nice things about a product. The Federal Trade Commission (FTC) requires this, but has never really enforced this rule with social media.
The reining in of influencer strategies
That might change, however, as the legal woes continue to mount for the event’s promoters. The FTC might be forced to get involved and start handing out fines. That might have a chilling effect on any social media influencer strategy – especially if the people getting fined include some of the influencers (“Fyre Starters”).
As with any Ponzi scheme, though, the people who don’t get out first are left holding the bag. The people who paid thousands of dollars for the ultimate VIP millennial event may never get their money back, and the low-level influencers who got paid last by the promoters might find that their fan base has completely disappeared due to a lack of credibility.
