WEBVTT 00:00:00.000 --> 00:00:02.379 Welcome back to the deep dive. We are so glad 00:00:02.379 --> 00:00:04.879 you're here with us today because we were tackling 00:00:04.879 --> 00:00:08.199 a subject that feels, you know, incredibly familiar. 00:00:08.320 --> 00:00:10.580 It really does. Maybe even deceptively simple. 00:00:10.660 --> 00:00:12.560 But when you actually start to peel back the 00:00:12.560 --> 00:00:18.000 layers, it reviews itself to be this this incredibly 00:00:18.000 --> 00:00:21.539 complex economic and psychological engine that's 00:00:21.539 --> 00:00:23.839 running a huge chunk of the modern world. It's 00:00:23.839 --> 00:00:26.559 one of those topics where the. let's call it 00:00:26.559 --> 00:00:28.420 the popular perception, is almost completely 00:00:28.420 --> 00:00:31.059 at odds with the mechanical reality of what's 00:00:31.059 --> 00:00:33.799 going on. It is a topic that is, I mean, it's 00:00:33.799 --> 00:00:36.520 reshaping global economies. It's changing the 00:00:36.520 --> 00:00:39.719 way political campaigns are run. And it is fundamentally 00:00:39.719 --> 00:00:42.899 altering how human beings perceive truth itself. 00:00:43.219 --> 00:00:45.359 And yet, if I were to ask the average person 00:00:45.359 --> 00:00:47.020 on the street, or even you listening right now, 00:00:47.179 --> 00:00:49.479 what image pocks into your head when I say the 00:00:49.479 --> 00:00:52.920 word influencer? What do you see? Oh, it's a 00:00:52.920 --> 00:00:54.979 caricature. For most people, it's a caricature. 00:00:54.979 --> 00:00:57.439 They see someone who's, you know, largely famous 00:00:57.439 --> 00:00:59.200 for being famous. Maybe they're dancing in a 00:00:59.200 --> 00:01:01.740 kitchen on TikTok or they're posting a heavily 00:01:01.740 --> 00:01:04.620 filtered photo of avocado toast in Dubai. It 00:01:04.620 --> 00:01:07.480 just feels frivolous. Frivolous. Exactly. It 00:01:07.480 --> 00:01:09.000 feels like a vanity project that's just gone 00:01:09.000 --> 00:01:11.900 viral. Exactly. We tend to dismiss it as, you 00:01:11.900 --> 00:01:14.780 know, kids these days or just the latest iteration 00:01:14.780 --> 00:01:18.269 of celebrity culture. But the mission. of this 00:01:18.269 --> 00:01:21.530 deep dive is to really challenge that mental 00:01:21.530 --> 00:01:25.049 image. We have a massive stack of source material 00:01:25.049 --> 00:01:28.890 here. I mean, articles, historical records, marketing 00:01:28.890 --> 00:01:31.569 theory, economic reports, that paints a completely 00:01:31.569 --> 00:01:33.689 different picture. A very different picture. 00:01:33.870 --> 00:01:36.030 This isn't just about selfies. This is a multi 00:01:36.030 --> 00:01:39.030 -billion dollar industry with roots that go back, 00:01:39.109 --> 00:01:41.469 I mean, centuries. And it's an industry that, 00:01:41.469 --> 00:01:44.930 you know, it capitalizes on a very specific failure 00:01:44.930 --> 00:01:48.140 of our traditional institutions. We are going 00:01:48.140 --> 00:01:49.879 to look at the history, which is surprisingly 00:01:49.879 --> 00:01:53.260 deep and, believe it or not, involves 17th century 00:01:53.260 --> 00:01:55.060 theology. Which is wild. We're going to look 00:01:55.060 --> 00:01:57.420 at the economics, which are incredibly top -heavy 00:01:57.420 --> 00:02:00.120 and, frankly, pretty brutal for most people involved. 00:02:00.420 --> 00:02:02.359 And we're going to get into the psychology why 00:02:02.359 --> 00:02:04.760 this specific form of marketing works better 00:02:04.760 --> 00:02:08.099 than anything Madison Avenue ever invented. So 00:02:08.099 --> 00:02:11.259 let's start by defining our terms. Because influencers 00:02:11.259 --> 00:02:14.560 are such a buzzword, and buzzwords, they tend 00:02:14.560 --> 00:02:16.080 to lose their meaning after a while. They get 00:02:16.080 --> 00:02:18.800 watered down. They do. And the source material, 00:02:19.020 --> 00:02:21.120 specifically the breakdown from this comprehensive 00:02:21.120 --> 00:02:24.240 Wikipedia review and its associated marketing 00:02:24.240 --> 00:02:27.319 literature, it draws a really hard line in the 00:02:27.319 --> 00:02:30.419 sand on the definition. Right. And we have to. 00:02:30.439 --> 00:02:32.259 We need to distinguish between a celebrity and 00:02:32.259 --> 00:02:37.039 an influencer. In the, let's say, traditional 00:02:37.039 --> 00:02:39.860 model think Hollywood in the 90s, a celebrity 00:02:39.860 --> 00:02:42.680 is someone who gets famous through a pre -existing 00:02:42.680 --> 00:02:45.520 industrial machine. You're an actor, so a studio 00:02:45.520 --> 00:02:48.139 makes you famous. You're a musician, so a record 00:02:48.139 --> 00:02:51.099 label promotes you. You have fame, and then because 00:02:51.099 --> 00:02:52.699 of that fame, people might buy the sunglasses 00:02:52.699 --> 00:02:55.060 you wear. So the influence is a byproduct of 00:02:55.060 --> 00:02:57.280 the fame. It comes second. Precisely. But the 00:02:57.280 --> 00:02:59.379 definition of an influencer, at least in the 00:02:59.379 --> 00:03:01.639 context of this whole creator economy, is the 00:03:01.639 --> 00:03:04.000 inverse of that. An influencer is someone who 00:03:04.000 --> 00:03:06.620 builds a, quote, grassroots online presence. 00:03:06.979 --> 00:03:09.319 They often start from zero. Right from scratch. 00:03:09.819 --> 00:03:12.520 From scratch. They use engaging content, you 00:03:12.520 --> 00:03:15.879 know, photos, videos, blogs to establish authenticity 00:03:15.879 --> 00:03:19.060 and expertise first. So the influence comes before 00:03:19.060 --> 00:03:21.759 the fame. That is the crucial distinction. They 00:03:21.759 --> 00:03:24.259 build this direct line of communication with 00:03:24.259 --> 00:03:26.599 an audience. They establish trust or at least, 00:03:26.599 --> 00:03:28.500 you know, the performance of trust. And then 00:03:28.500 --> 00:03:30.979 once that community is solid, they leverage it 00:03:30.979 --> 00:03:34.259 for commercial gain, for ideological gain, you 00:03:34.259 --> 00:03:37.280 name it. It is basically influence for hire. 00:03:37.689 --> 00:03:40.629 That word grassroots is so interesting because 00:03:40.629 --> 00:03:45.150 it implies this democratic process. We, the audience, 00:03:45.409 --> 00:03:48.189 chose to make this person famous by following 00:03:48.189 --> 00:03:50.050 them rather than having them, you know, thrust 00:03:50.050 --> 00:03:52.430 upon us by a movie poster or a record label. 00:03:52.550 --> 00:03:54.789 And that feeling of choice is exactly why the 00:03:54.789 --> 00:03:56.370 psychology works so well, which we'll definitely 00:03:56.370 --> 00:03:59.250 get to. But first, we have to completely dismantle 00:03:59.250 --> 00:04:01.449 the idea that this is new. You would assume, 00:04:01.569 --> 00:04:03.789 just looking at the current landscape, that the 00:04:03.789 --> 00:04:06.210 concept of an influencer was invented in some 00:04:06.210 --> 00:04:09.110 boardroom in Silicon Valley around, what, 2010 00:04:09.110 --> 00:04:12.360 when Instagram launched? I certainly did. I assumed 00:04:12.360 --> 00:04:14.240 it was a millennial invention through and through. 00:04:14.360 --> 00:04:16.660 But the source material pulls up a reference 00:04:16.660 --> 00:04:18.939 that honestly just stopped me in my tracks. The 00:04:18.939 --> 00:04:22.060 Oxford English Dictionary. It cites the earliest 00:04:22.060 --> 00:04:25.600 usage of the word influencer. Not in 2010, not 00:04:25.600 --> 00:04:31.189 in 1990. but in 1664 get out of here 1664 1664 00:04:31.189 --> 00:04:34.009 we are talking about the era of isaac newton 00:04:34.009 --> 00:04:36.569 and the great plague of london we are the usage 00:04:36.569 --> 00:04:39.990 comes from a man named henry moore he was a philosopher 00:04:39.990 --> 00:04:42.569 a theologian one of the cambridge platonists 00:04:42.569 --> 00:04:45.560 and he wrote this book with the just incredible 00:04:45.560 --> 00:04:48.759 title, A Modest Inquiry into the Mystery of Iniquity. 00:04:48.860 --> 00:04:50.259 That sounds like a bestseller. I'd read that. 00:04:50.339 --> 00:04:52.959 Right. It was dense stuff for sure. But in this 00:04:52.959 --> 00:04:56.459 text, he uses the term to describe, and I'm quoting 00:04:56.459 --> 00:04:59.199 here, the head and influencer of the whole church. 00:04:59.500 --> 00:05:01.480 Okay. So he's using it in a religious context, 00:05:01.600 --> 00:05:03.920 the head of the church. But does that really 00:05:03.920 --> 00:05:06.579 map onto what we see today? Is there like a direct 00:05:06.579 --> 00:05:09.439 through line from a 17th century church leader 00:05:09.439 --> 00:05:12.829 to a beauty vlogger on YouTube? If you think 00:05:12.829 --> 00:05:15.709 about the mechanics of it, absolutely. What was 00:05:15.709 --> 00:05:18.610 the church in the 17th century? It was the original 00:05:18.610 --> 00:05:22.269 social network. It was the primary platform for 00:05:22.269 --> 00:05:25.029 disseminating ideas, for shaping behavior and 00:05:25.029 --> 00:05:27.550 for establishing community norms. It was the 00:05:27.550 --> 00:05:29.910 media. It was the media. The influencer in that 00:05:29.910 --> 00:05:33.110 context was the person who stood at the pulpit. 00:05:33.389 --> 00:05:35.850 the hub of the network, and guided the flock. 00:05:36.149 --> 00:05:38.509 They interpreted the truth for their audience. 00:05:38.730 --> 00:05:40.930 Exactly. They were the mediator, the mediator 00:05:40.930 --> 00:05:42.930 between the source material, and in that case, 00:05:42.949 --> 00:05:44.649 you know, the Bible and the daily lives of the 00:05:44.649 --> 00:05:47.310 people. Modern influencers do the exact same 00:05:47.310 --> 00:05:49.329 thing. They mediate between the market products, 00:05:49.449 --> 00:05:51.790 lifestyle trends, news, and their followers. 00:05:52.490 --> 00:05:55.310 The medium has changed from a pulpit to a smartphone, 00:05:55.569 --> 00:05:58.329 but the core dynamic of one person guiding the 00:05:58.329 --> 00:06:01.129 behavior of a community, that's ancient. That 00:06:01.129 --> 00:06:03.519 is a fascinating way to frame it. It's not about 00:06:03.519 --> 00:06:05.259 the technology. It's about the social structure. 00:06:05.399 --> 00:06:07.579 Yeah. OK, so let's jump forward to a time period 00:06:07.579 --> 00:06:10.579 that feels a bit more tangible. The sources present 00:06:10.579 --> 00:06:12.920 this case study that I think is the perfect bridge 00:06:12.920 --> 00:06:15.939 between that old world and our new digital one. 00:06:16.100 --> 00:06:18.300 This is one of my favorite parts of the research, 00:06:18.540 --> 00:06:21.060 the search for the original media influencer. 00:06:21.360 --> 00:06:24.000 And it is not who you would expect at all. It's 00:06:24.000 --> 00:06:26.480 not a movie star from the golden age of Hollywood. 00:06:26.579 --> 00:06:30.740 It's not a model. It is Eleanor Roosevelt. The 00:06:30.740 --> 00:06:33.379 first lady of the United States from 1933 to 00:06:33.379 --> 00:06:36.579 1945. Now, wait a minute. I know Eleanor Roosevelt 00:06:36.579 --> 00:06:38.639 was influential, of course, in a political sense. 00:06:38.680 --> 00:06:40.839 She was a diplomat, an activist, a powerhouse. 00:06:41.500 --> 00:06:45.019 But calling her a media influencer in the modern 00:06:45.019 --> 00:06:47.500 sense of the term, that feels like a bit of a 00:06:47.500 --> 00:06:49.519 stretch. It sounds like a stretch until you look 00:06:49.519 --> 00:06:51.720 at the specific actions she took. She didn't 00:06:51.720 --> 00:06:53.360 just rely on the prestige of the White House. 00:06:53.379 --> 00:06:55.740 That wasn't her platform. She built a personal 00:06:55.740 --> 00:06:58.480 content machine that rivals any modern creator. 00:06:58.860 --> 00:07:01.040 You're talking about her newspaper column. Yes, 00:07:01.100 --> 00:07:04.079 my day. And this wasn't, you know, a weekly op 00:07:04.079 --> 00:07:07.120 -ed on dense policy. This was a daily newspaper 00:07:07.120 --> 00:07:11.040 column. It ran six days a week for 26 years. 00:07:11.199 --> 00:07:14.079 Daily. Six days a week. That is an incredible 00:07:14.079 --> 00:07:16.220 volume of content. I mean, most YouTubers can't 00:07:16.220 --> 00:07:18.939 keep that up. It's the 1930s equivalent of daily 00:07:18.939 --> 00:07:21.660 vlogging or blogging. She wrote about everything. 00:07:21.860 --> 00:07:24.240 She'd cover her breakfast, her travels, her conversations 00:07:24.240 --> 00:07:26.709 with the president. But then she would pivot 00:07:26.709 --> 00:07:29.850 to lifestyle content. She reviewed books she 00:07:29.850 --> 00:07:32.170 was reading. She recommended plays. She talked 00:07:32.170 --> 00:07:34.670 about products she liked and used. She is building 00:07:34.670 --> 00:07:37.009 this parasocial relationship. She is inviting 00:07:37.009 --> 00:07:39.889 the entire American public into her private life 00:07:39.889 --> 00:07:42.329 every single day. Exactly right. And in doing 00:07:42.329 --> 00:07:44.629 so, she established a brand that was completely 00:07:44.629 --> 00:07:47.589 distinct from her husband's administration. She 00:07:47.589 --> 00:07:50.449 was seen as independent, wise and above all. 00:07:50.759 --> 00:07:53.800 trustworthy. And here, here is where it gets 00:07:53.800 --> 00:07:57.319 really murky and really modern. She monetized 00:07:57.319 --> 00:07:59.620 that trust. This is the part I really struggled 00:07:59.620 --> 00:08:01.360 to believe at first. The first lady of the United 00:08:01.360 --> 00:08:04.459 States doing paid commercials. She did. And not 00:08:04.459 --> 00:08:06.540 just for, you know, war bonds or public service 00:08:06.540 --> 00:08:08.899 announcements. The source material highlights 00:08:08.899 --> 00:08:12.740 this specific campaign she did in 1959. She starred 00:08:12.740 --> 00:08:15.920 in a TV commercial for Good Luck Margarine. I 00:08:15.920 --> 00:08:18.519 just cannot picture a modern first lady doing 00:08:18.519 --> 00:08:21.930 that. Imagine if Jill Biden or Melania Trump 00:08:21.930 --> 00:08:24.709 popped up on your screen selling butter. The 00:08:24.709 --> 00:08:27.009 media would tear them apart. It would be a massive 00:08:27.009 --> 00:08:29.430 conflict of interest scandal. It would be absolutely 00:08:29.430 --> 00:08:34.070 unthinkable today. But in 1959, the rules of 00:08:34.070 --> 00:08:36.409 media and celebrity were just different. And 00:08:36.409 --> 00:08:38.490 the payout, I mean, the payout was astronomical 00:08:38.490 --> 00:08:41.389 for the time. For that one commercial, Eleanor 00:08:41.389 --> 00:08:45.070 Roosevelt was paid $35 ,000. OK, $35 ,000 in 00:08:45.070 --> 00:08:48.259 1959. What is that today? Adjusting for inflation, 00:08:48.440 --> 00:08:52.559 that is roughly $250 ,000 in today's currency. 00:08:52.820 --> 00:08:56.100 A quarter of a million dollars for a single margarine 00:08:56.100 --> 00:08:59.100 ad. That is Super Bowl money. It is mega influencer 00:08:59.100 --> 00:09:02.019 money. And she executed it just like a modern 00:09:02.019 --> 00:09:04.399 influencer would. She had to weave her own brand 00:09:04.399 --> 00:09:06.840 values into the ad copy. She couldn't just stand 00:09:06.840 --> 00:09:08.860 there and say, buy this butter substitute. So 00:09:08.860 --> 00:09:10.960 why does she do it? In the commercial, she actually 00:09:10.960 --> 00:09:13.460 manages to pivot the conversation from margarine 00:09:13.460 --> 00:09:15.779 to the problem of world hunger. She connected 00:09:15.779 --> 00:09:18.240 margarine to world hunger? She framed it in the 00:09:18.240 --> 00:09:21.159 context of ensuring everyone, everywhere had 00:09:21.159 --> 00:09:25.059 enough to eat. It was totally on brand. It maintained 00:09:25.059 --> 00:09:28.500 her persona as this global humanitarian while 00:09:28.500 --> 00:09:32.080 simultaneously selling a consumer product. That 00:09:32.080 --> 00:09:35.539 is the holy grail of influencer marketing. The 00:09:35.539 --> 00:09:38.019 seamless integration of commerce and personal 00:09:38.019 --> 00:09:40.539 identity. And the sources mentioned she didn't 00:09:40.539 --> 00:09:42.899 just pocket the cash, right? Which is a big difference. 00:09:43.080 --> 00:09:45.279 Correct. And this is a key distinction for most 00:09:45.279 --> 00:09:47.919 modern influencers, for sure. She donated the 00:09:47.919 --> 00:09:50.679 vast majority of her earnings to charity. However, 00:09:50.840 --> 00:09:52.799 the sources also note that she wasn't afraid 00:09:52.799 --> 00:09:55.480 to use her influence to help her family. She 00:09:55.480 --> 00:09:58.179 absolutely leveraged her sway to assist the entertainment 00:09:58.179 --> 00:10:00.340 careers of her children. So we have the origin 00:10:00.340 --> 00:10:02.320 of the Nepo baby discourse, too. It's all there. 00:10:02.419 --> 00:10:05.220 It is all there. The paid spots, the brand building, 00:10:05.419 --> 00:10:08.580 the personal content, the family promotion. Sources 00:10:08.580 --> 00:10:10.679 even argue that her influence was so potent it 00:10:10.679 --> 00:10:13.279 had real world political consequences beyond 00:10:13.279 --> 00:10:16.220 just selling products. A JFK election. There's 00:10:16.220 --> 00:10:18.600 a theory that her televised support of John F. 00:10:18.659 --> 00:10:21.460 Kennedy in his 1960 campaign helped nudge him 00:10:21.460 --> 00:10:24.000 to victory. A hairline victory, as the history 00:10:24.000 --> 00:10:26.779 books say, decided by an influencer endorsement. 00:10:26.860 --> 00:10:29.539 Essentially. It just demonstrates the raw power 00:10:29.539 --> 00:10:31.879 of that connection she'd built. People trusted 00:10:31.879 --> 00:10:35.100 Eleanor. If Eleanor said JFK was OK, then for 00:10:35.100 --> 00:10:38.820 a lot of voters, he was OK. It completely bypassed 00:10:38.820 --> 00:10:41.000 the political party machinery and went straight 00:10:41.000 --> 00:10:43.620 to the voters' trust receptors. So he had this 00:10:43.620 --> 00:10:47.000 rich... long history of influence. But then we 00:10:47.000 --> 00:10:50.360 hit the internet age and everything just accelerates. 00:10:50.440 --> 00:10:53.059 The source material tracks this digital evolution 00:10:53.059 --> 00:10:55.200 starting in the early 2000s. This is where we 00:10:55.200 --> 00:10:58.720 move from mass media TV newspapers to the complete 00:10:58.720 --> 00:11:01.820 fragmentation of the web. In the early 2000s, 00:11:01.820 --> 00:11:04.419 we saw the rise of the bloggers. The era of LiveJournal 00:11:04.419 --> 00:11:07.159 and Blogspot and Zanga. And product forums. People 00:11:07.159 --> 00:11:09.159 were going online to talk about, you know, digital 00:11:09.159 --> 00:11:11.700 cameras or video games or parenting techniques. 00:11:11.960 --> 00:11:13.980 And companies started to realize something. Really 00:11:13.980 --> 00:11:16.399 important. Consumers did not trust their banner 00:11:16.399 --> 00:11:20.039 ads. Right. But they did trust user 745 on a 00:11:20.039 --> 00:11:23.480 camera forum who wrote a detailed 5000 word review 00:11:23.480 --> 00:11:25.879 of a new Canon camera. But this was the Wild 00:11:25.879 --> 00:11:28.259 West, wasn't it? There were no rules, no disclosures. 00:11:28.320 --> 00:11:31.220 None whatsoever. Companies would just send free 00:11:31.220 --> 00:11:34.929 products. Cameras, clothes, fast food to these 00:11:34.929 --> 00:11:37.789 bloggers in exchange for a write -up. But nobody 00:11:37.789 --> 00:11:40.129 was disclosing it. It was a complete gray market 00:11:40.129 --> 00:11:43.970 of opinion. Then in 2004, a guy named Ted Murphy 00:11:43.970 --> 00:11:46.529 decided to formalize it. He launched something 00:11:46.529 --> 00:11:49.529 called the Blogstar Network. Which sounds like 00:11:49.529 --> 00:11:52.529 a very 2004 name. It really does. But the concept 00:11:52.529 --> 00:11:55.149 itself was revolutionary. He created a database 00:11:55.149 --> 00:11:57.330 of bloggers and essentially went to advertisers 00:11:57.330 --> 00:11:59.929 and said, I can get your product mentioned on 00:11:59.929 --> 00:12:02.679 all these sites for a fee. This eventually evolved 00:12:02.679 --> 00:12:05.879 into a platform called PaperPost in 2006. And 00:12:05.879 --> 00:12:07.700 PaperPost was exactly what it sounds like. You 00:12:07.700 --> 00:12:10.840 pay, I post. And it caused a massive ethical 00:12:10.840 --> 00:12:13.159 outcry. I mean, journalists and media ethicists 00:12:13.159 --> 00:12:14.860 were horrified. The idea that you could just 00:12:14.860 --> 00:12:17.980 pay for coverage without any disclosure, it violated 00:12:17.980 --> 00:12:20.220 every tenet of the profession. But it worked. 00:12:20.259 --> 00:12:22.259 It worked because the audience didn't know the 00:12:22.259 --> 00:12:24.820 difference. Then came the visual shift. The 2010s 00:12:24.820 --> 00:12:27.340 arrived. And with them, the rise of Instagram. 00:12:27.980 --> 00:12:30.059 This changed the entire game from being about 00:12:30.059 --> 00:12:33.559 information to being about aspiration. Blogs 00:12:33.559 --> 00:12:35.220 were often text heavy. They were information 00:12:35.220 --> 00:12:38.440 rich. Instagram was about the aesthetic. It allowed 00:12:38.440 --> 00:12:41.240 people to curate a visual lifestyle that was 00:12:41.240 --> 00:12:44.740 designed to be envied. The glossy magazine of 00:12:44.740 --> 00:12:47.110 the Internet. Perfectly put. And despite the 00:12:47.110 --> 00:12:49.690 recent rise of TikTok and short form video, the 00:12:49.690 --> 00:12:53.169 sources all note that as of 2023, Instagram is 00:12:53.169 --> 00:12:55.809 still the undisputed king of influencer marketing 00:12:55.809 --> 00:12:58.509 spend. It's where the big money is. Which brings 00:12:58.509 --> 00:13:01.509 us to the big question. Why does it work? Why 00:13:01.509 --> 00:13:03.649 do we care so much? That's what we need to get 00:13:03.649 --> 00:13:06.149 into. The psychology of it all. Right. Because 00:13:06.149 --> 00:13:07.929 on the surface, it seems completely irrational. 00:13:08.670 --> 00:13:10.909 Why would I trust a stranger on the internet 00:13:10.909 --> 00:13:14.110 more than, say, a professional critic or a billion 00:13:14.110 --> 00:13:16.570 -dollar brand with a reputation to protect? It 00:13:16.570 --> 00:13:19.230 all comes down to a crisis of institutional trust. 00:13:19.679 --> 00:13:22.039 The source material references this pivotal study 00:13:22.039 --> 00:13:24.299 from Rutgers University that was conducted way, 00:13:24.360 --> 00:13:26.919 way back in 2001. 2001. That's pre -Facebook. 00:13:26.960 --> 00:13:28.940 That's pre -YouTube. It's ancient in digital 00:13:28.940 --> 00:13:31.740 years. But the findings were incredibly prophetic. 00:13:31.980 --> 00:13:34.379 They found that even back then, people already 00:13:34.379 --> 00:13:37.259 preferred Internet forums and other social sources 00:13:37.259 --> 00:13:39.919 over conventional ads and even over professional 00:13:39.919 --> 00:13:42.559 reviews when making purchasing decisions. And 00:13:42.559 --> 00:13:44.960 what was the logic there? It boils down to two 00:13:44.960 --> 00:13:48.220 things. Perceived authenticity and a lack of 00:13:48.220 --> 00:13:51.200 obvious bias. we are conditioned from birth to 00:13:51.200 --> 00:13:54.240 know that an advertisement is a lie or at least 00:13:54.240 --> 00:13:57.159 a manipulation the company is talking about itself 00:13:57.159 --> 00:13:59.500 it has a direct financial incentive to deceive 00:13:59.500 --> 00:14:03.490 you but a real person on a forum Theoretically, 00:14:03.509 --> 00:14:05.730 they have no skin in the game. They are a neutral 00:14:05.730 --> 00:14:08.389 third party. But the great irony is that the 00:14:08.389 --> 00:14:11.370 influencer industry has turned those real people 00:14:11.370 --> 00:14:14.870 into walking, talking advertisements. That is 00:14:14.870 --> 00:14:16.970 the great paradox. The source material defines 00:14:16.970 --> 00:14:19.269 an influencer as a third party who significantly 00:14:19.269 --> 00:14:21.850 shapes the customer's purchasing decision but 00:14:21.850 --> 00:14:24.330 may never be accountable for it. That phrase, 00:14:24.490 --> 00:14:26.070 never be accountable, that's the dangerous part. 00:14:26.700 --> 00:14:28.860 But the perception of being a third party is 00:14:28.860 --> 00:14:31.360 what generates all the trust. The sources also 00:14:31.360 --> 00:14:34.000 bring in Malcolm Gladwell's work from the tipping 00:14:34.000 --> 00:14:36.860 point. He breaks down the types of people who 00:14:36.860 --> 00:14:39.200 drive this kind of influence. And I think this 00:14:39.200 --> 00:14:41.720 is really helpful for understanding that not 00:14:41.720 --> 00:14:44.120 all influencers are doing the same job. Right. 00:14:44.779 --> 00:14:48.159 Gladwell identifies three key archetypes. First, 00:14:48.279 --> 00:14:50.139 you have the connectors. These are the social 00:14:50.139 --> 00:14:52.000 butterflies, the networkers? They're the network 00:14:52.000 --> 00:14:54.259 nodes. They know everyone. They bridge all these 00:14:54.259 --> 00:14:56.580 different social circles. In the digital age, 00:14:56.679 --> 00:14:59.740 this is someone who aggregates a lot of content, 00:14:59.879 --> 00:15:02.080 or they're always the first to share viral memes, 00:15:02.279 --> 00:15:04.759 or they just seem to know everybody in their 00:15:04.759 --> 00:15:07.419 particular industry. Their value is their reach. 00:15:07.600 --> 00:15:10.080 If a connector mentions you, you get seen by 00:15:10.080 --> 00:15:11.840 a lot of different people. Okay, so that's one 00:15:11.840 --> 00:15:14.659 type. Then you have the mavens. The maven is 00:15:14.659 --> 00:15:17.889 the information specialist. The nerd. This is 00:15:17.889 --> 00:15:20.470 the tech YouTuber who does a 40 minute deep dive 00:15:20.470 --> 00:15:23.610 breakdown of a new graphics card. Or it's the 00:15:23.610 --> 00:15:26.009 beauty guru who analyzes the chemical ingredients 00:15:26.009 --> 00:15:28.529 of a moisturizer. They aren't trying to sell 00:15:28.529 --> 00:15:30.490 you based on personality. They are selling you 00:15:30.490 --> 00:15:33.730 based on data and expertise. You trust them because 00:15:33.730 --> 00:15:35.450 they've done the homework that you are too busy 00:15:35.450 --> 00:15:38.370 or frankly too lazy to do. And the third one, 00:15:38.450 --> 00:15:41.149 the salesman. The salesman is pure charisma. 00:15:41.799 --> 00:15:43.480 This is the person who could sell sand in the 00:15:43.480 --> 00:15:46.539 desert. They use emotional persuasion. They make 00:15:46.539 --> 00:15:48.720 you feel like if you just buy this product, you'll 00:15:48.720 --> 00:15:51.159 be part of their cool, happy, exciting life. 00:15:51.500 --> 00:15:53.759 Most of the top tier influencers are some kind 00:15:53.759 --> 00:15:56.259 of hybrid of these three, but they usually lean 00:15:56.259 --> 00:15:59.000 heavily into one of these specific lanes. And 00:15:59.000 --> 00:16:00.940 companies are getting incredibly sophisticated 00:16:00.940 --> 00:16:03.820 about matching the right archetype to the right 00:16:03.820 --> 00:16:06.120 product. The sources talk about this concept 00:16:06.120 --> 00:16:08.639 of product and benefit matching. Oh, this is 00:16:08.639 --> 00:16:11.120 crucial. It's the difference between a campaign. 00:16:11.179 --> 00:16:13.519 pain that soars and one that just completely 00:16:13.519 --> 00:16:16.559 flops. The text uses the example of a shampoo 00:16:16.559 --> 00:16:18.639 brand. You don't just need a famous person. You 00:16:18.639 --> 00:16:20.879 need a person with, you know, good hair that 00:16:20.879 --> 00:16:22.940 seems pretty obvious right it does but you have 00:16:22.940 --> 00:16:25.679 to take it a step further if you are a brand 00:16:25.679 --> 00:16:29.019 that sells excitement or flashiness maybe a sports 00:16:29.019 --> 00:16:32.419 car or a high -end vodka you need an influencer 00:16:32.419 --> 00:16:36.000 who embodies that loud bold look at me lifestyle 00:16:36.000 --> 00:16:39.299 but if you're selling say a minimalist skincare 00:16:39.299 --> 00:16:42.320 line that's all about quiet luxury hiring that 00:16:42.320 --> 00:16:44.779 same loud influencer will absolutely backfire 00:16:44.779 --> 00:16:46.500 even if they have millions of followers even 00:16:46.500 --> 00:16:49.340 then the audience will sense the disconnect it's 00:16:49.360 --> 00:16:51.840 triggers that inauthentic alarm bell in our brains, 00:16:51.919 --> 00:16:53.419 they'll know something's off. So it's really 00:16:53.419 --> 00:16:55.759 about casting. You're casting a character to 00:16:55.759 --> 00:16:58.759 play a role in your brand's story. Exactly. And 00:16:58.759 --> 00:17:01.580 this leads us perfectly into the hierarchy of 00:17:01.580 --> 00:17:04.079 the industry because there is a very real caste 00:17:04.079 --> 00:17:06.599 system here. And the economics of it are fascinating 00:17:06.599 --> 00:17:09.700 because counterintuitively, bigger is not always 00:17:09.700 --> 00:17:13.000 better. This is our third section, the hierarchy. 00:17:13.799 --> 00:17:16.160 And we usually categorize these people by one 00:17:16.160 --> 00:17:19.789 simple metric. follower count. Right. The industry 00:17:19.789 --> 00:17:22.710 standard tiers are pretty rigid. At the very 00:17:22.710 --> 00:17:25.150 bottom, you have the nano influencers. These 00:17:25.150 --> 00:17:28.049 are people with under 10 ,000 followers. Which 00:17:28.049 --> 00:17:29.930 to an oral person sounds like a lot of people. 00:17:30.329 --> 00:17:33.410 But in this world, it's tiny. It is the absolute 00:17:33.410 --> 00:17:35.130 entry level. And you have micro influencers, 00:17:35.250 --> 00:17:37.970 which is generally from 10 ,000 up to 100 ,000. 00:17:38.349 --> 00:17:40.829 above that macro influencers go up to half a 00:17:40.829 --> 00:17:43.589 million and then anything above 500k you're in 00:17:43.589 --> 00:17:46.509 the mega or celeb influencer territory okay so 00:17:46.509 --> 00:17:48.490 if i'm a brand with a million dollar marketing 00:17:48.490 --> 00:17:51.009 budget my first instinct is to go straight to 00:17:51.009 --> 00:17:53.069 the mega influencer i want the most eyeballs 00:17:53.069 --> 00:17:55.170 right i want the celebrity and that was the old 00:17:55.170 --> 00:17:58.269 thinking for sure but the source material highlights 00:17:58.269 --> 00:18:01.509 a massive shift in strategy advertisers are increasingly 00:18:01.509 --> 00:18:04.390 dumping their money into the nano and the micro 00:18:04.390 --> 00:18:07.059 tiers why Why would you go for the person with 00:18:07.059 --> 00:18:09.559 5 ,000 followers instead of 5 million? It all 00:18:09.559 --> 00:18:11.299 comes back to what you could call the intimacy 00:18:11.299 --> 00:18:14.440 cost. As your audience grows, your engagement 00:18:14.440 --> 00:18:16.859 rate, the percentage of your followers who actually 00:18:16.859 --> 00:18:19.500 interact with your content, it almost invariably 00:18:19.500 --> 00:18:22.740 drops. A celebrity with 5 million followers might 00:18:22.740 --> 00:18:25.440 post a photo and get a lot of likes, but are 00:18:25.440 --> 00:18:27.730 they reading the comments? Are they replying 00:18:27.730 --> 00:18:30.109 to DMs? Of course not. It's a broadcast, not 00:18:30.109 --> 00:18:32.950 a conversation. But the nano -influencer? The 00:18:32.950 --> 00:18:35.609 nano -influencer probably knows half their followers 00:18:35.609 --> 00:18:38.670 by name, or at least recognizes their usernames 00:18:38.670 --> 00:18:41.849 from past comments. When they post, hey, I really 00:18:41.849 --> 00:18:44.109 love these new hiking boots, it feels like a 00:18:44.109 --> 00:18:46.809 genuine recommendation from a friend. The trust 00:18:46.809 --> 00:18:49.450 is incredibly high. And the data actually supports 00:18:49.450 --> 00:18:52.529 this, doesn't it? It does, in a big way. In 2024, 00:18:52.829 --> 00:18:55.730 45 % of the total U .S. marketing spend in this 00:18:55.730 --> 00:18:58.549 entire sector went to influencers with fewer 00:18:58.549 --> 00:19:01.369 than 20 ,000 followers. 45%. That's almost half 00:19:01.369 --> 00:19:03.029 the market. Almost half the market is moving 00:19:03.029 --> 00:19:05.730 away from the big stars and toward the neighbors. 00:19:06.049 --> 00:19:08.130 It's the classic long -tail theory of the Internet. 00:19:08.329 --> 00:19:11.369 A million tiny niche markets are actually bigger 00:19:11.369 --> 00:19:14.569 and more valuable than one mass market. Precisely. 00:19:15.180 --> 00:19:18.539 It is way more efficient to pay 100 micro -influencers 00:19:18.539 --> 00:19:22.339 $500 each than it is to pay one celebrity $50 00:19:22.339 --> 00:19:25.200 ,000. You get better engagement, higher trust, 00:19:25.359 --> 00:19:27.579 and often you get better, more creative content 00:19:27.579 --> 00:19:29.740 because the small creators are hungry. They're 00:19:29.740 --> 00:19:31.740 trying to prove themselves. But there is another 00:19:31.740 --> 00:19:34.160 category emerging that sort of bypasses the whole 00:19:34.160 --> 00:19:37.440 human element entirely. The virtual influencers. 00:19:37.819 --> 00:19:40.359 This is where we fully enter the realm of science 00:19:40.359 --> 00:19:42.859 fiction or perhaps, you know, corporate dystopia, 00:19:42.859 --> 00:19:46.420 depending on your point of view. The AAIs, Artificially 00:19:46.420 --> 00:19:48.660 Intelligent Influencers. So these are characters. 00:19:48.799 --> 00:19:52.220 They're generated by CGI and AI. They have social 00:19:52.220 --> 00:19:54.960 media accounts, they post photos, they wear clothes, 00:19:55.079 --> 00:19:57.519 and they talk to their fans. But they don't exist 00:19:57.519 --> 00:19:59.700 in the real world. Think of characters like Lin 00:19:59.700 --> 00:20:02.420 McKella or Shudu. These accounts have millions 00:20:02.420 --> 00:20:05.140 of followers. And major brands, Prada, Samsung, 00:20:05.380 --> 00:20:07.339 Calvin Klein, are hiring them for campaigns. 00:20:07.759 --> 00:20:09.960 From a purely business perspective, I can absolutely 00:20:09.960 --> 00:20:12.619 see the appeal. It's the ultimate solution to 00:20:12.619 --> 00:20:15.519 the human problem. Humans are messy. Humans get 00:20:15.519 --> 00:20:18.440 tired. Humans get caught in scandals. Humans 00:20:18.440 --> 00:20:22.380 say the wrong thing. Humans age. A virtual influencer 00:20:22.380 --> 00:20:27.099 is immortal, indefatigable, and perfectly 100 00:20:27.099 --> 00:20:29.819 % controllable. They will never say something 00:20:29.819 --> 00:20:31.980 offensive unless you program them to. They'll 00:20:31.980 --> 00:20:34.259 never show up late to a photo shoot because they 00:20:34.259 --> 00:20:37.240 don't physically exist. Exactly. But... Doesn't 00:20:37.240 --> 00:20:39.519 that destroy the entire premise of authenticity 00:20:39.519 --> 00:20:41.539 that we've spent all this time talking about? 00:20:41.619 --> 00:20:44.680 If I know this is a robot, why on earth do I 00:20:44.680 --> 00:20:48.079 trust its recommendation for a moisturizer? It 00:20:48.079 --> 00:20:50.599 doesn't have skin. That is the paradox we are 00:20:50.599 --> 00:20:52.579 now living in. It turns out people might not 00:20:52.579 --> 00:20:55.039 care as much about biological reality as we once 00:20:55.039 --> 00:20:57.380 thought. If the character is compelling, if the 00:20:57.380 --> 00:21:00.220 storytelling is good, we engage with it. It challenges 00:21:00.220 --> 00:21:02.920 the very definition of what it means to be social. 00:21:03.220 --> 00:21:05.089 It's like professional wrestling. We all know 00:21:05.089 --> 00:21:06.869 it's scripted, but we still cheer for the good 00:21:06.869 --> 00:21:09.349 guy and boo the bad guy. Exactly. We are entering 00:21:09.349 --> 00:21:12.369 the era of kayfabe in marketing. The suspension 00:21:12.369 --> 00:21:15.089 of disbelief is now part of the product. Okay, 00:21:15.130 --> 00:21:18.230 so we have this massive industry. We have robots. 00:21:18.390 --> 00:21:20.269 We have nepo babies. We have nano influencers. 00:21:20.509 --> 00:21:23.690 Let's talk about the money. Section four, the 00:21:23.690 --> 00:21:26.630 economics. Because there is a very dangerous 00:21:26.630 --> 00:21:29.589 myth out there that becoming an influencer is 00:21:29.589 --> 00:21:31.829 some kind of get -rich -quick scheme. It's the 00:21:31.829 --> 00:21:34.250 modern gold rush. Every kid doesn't want to be 00:21:34.250 --> 00:21:35.950 an astronaut anymore. They want to be a YouTuber. 00:21:36.250 --> 00:21:39.130 But the source material provides a really brutal 00:21:39.130 --> 00:21:42.289 reality check. Let's look at the 1 % rule, or 00:21:42.289 --> 00:21:44.549 I guess in this case it's the 4 % rule. The data 00:21:44.549 --> 00:21:48.309 shows that only 4 % of all influencers make more 00:21:48.309 --> 00:21:52.410 than $100 ,000 a year. That is a staggering statistic. 00:21:52.670 --> 00:21:54.650 I mean, that means 96 % of the people who are 00:21:54.650 --> 00:21:56.549 doing this as a job are making less than a living 00:21:56.549 --> 00:21:59.019 wage from it. And that's before costs. When you 00:21:59.019 --> 00:22:01.079 factor in the cost of equipment, the clothes, 00:22:01.279 --> 00:22:03.920 the travel, the editing software, many of them 00:22:03.920 --> 00:22:06.099 are likely operating at a net loss. So what are 00:22:06.099 --> 00:22:09.059 they getting paid in, if not cash? In -kind payments, 00:22:09.319 --> 00:22:11.920 free stuff. The sources highlight that for the 00:22:11.920 --> 00:22:14.279 vast, vast majority of creators, especially in 00:22:14.279 --> 00:22:16.779 those lower tiers, free products are the primary 00:22:16.779 --> 00:22:19.140 currency. A brand sends you a bottle of shampoo, 00:22:19.259 --> 00:22:21.880 you post a video, the brand gets its advertising, 00:22:22.180 --> 00:22:25.509 you get clean hair. You can't pay your rent with 00:22:25.509 --> 00:22:28.150 shampoo. No, you absolutely cannot. And this 00:22:28.150 --> 00:22:30.450 creates an economic structure that is incredibly 00:22:30.450 --> 00:22:33.549 similar to the Janini coefficient of a failed 00:22:33.549 --> 00:22:37.349 state. The wealth is concentrated so aggressively 00:22:37.349 --> 00:22:40.789 at the very, very top. The middle class of influencers 00:22:40.789 --> 00:22:43.589 is actually quite small and incredibly precarious. 00:22:44.009 --> 00:22:46.269 The sources mentioned that there were 27 million 00:22:46.269 --> 00:22:49.369 paid content creators in the U .S. alone in 2023. 00:22:49.769 --> 00:22:51.569 Right. But you have to break that number down. 00:22:51.670 --> 00:22:53.950 Seven million of those were classified as hobbyists. 00:22:53.970 --> 00:22:55.529 They're doing it for fun or for a little bit 00:22:55.529 --> 00:22:58.130 of side cash. The 12 million who consider themselves 00:22:58.130 --> 00:23:01.289 full -time creators, they are all fighting for 00:23:01.289 --> 00:23:04.130 a very specific, very small slice of the pie. 00:23:04.309 --> 00:23:06.910 So how do the winners, the tycoons at the top, 00:23:07.109 --> 00:23:09.549 how do they actually make the big money? Because 00:23:09.549 --> 00:23:11.970 it's clearly not just about sponsored posts anymore. 00:23:12.410 --> 00:23:15.589 No, the sponsored post, what some call the billboard 00:23:15.589 --> 00:23:18.309 model, it's unstable. If the platform algorithm 00:23:18.309 --> 00:23:20.910 changes, you can lose your entire income overnight. 00:23:21.190 --> 00:23:23.650 The smart ones, the ones who last, they diversify. 00:23:24.029 --> 00:23:26.269 The sources point to what they call the tycoon 00:23:26.269 --> 00:23:29.470 model or influencer 3 .0. This is where you stop 00:23:29.470 --> 00:23:31.029 selling other people's products and you start 00:23:31.029 --> 00:23:33.849 selling your own. Exactly. Look at the case of 00:23:33.849 --> 00:23:36.450 Kiara Farani. She started a blog called The Blonde 00:23:36.450 --> 00:23:39.559 Salad. It was just outfit photos. But she leveraged 00:23:39.559 --> 00:23:42.240 that audience to launch her own shoe line and 00:23:42.240 --> 00:23:45.039 then her own clothing brand. She built a business 00:23:45.039 --> 00:23:48.160 empire where she captures the full value of every 00:23:48.160 --> 00:23:50.839 sale, not just a small marketing fee from another 00:23:50.839 --> 00:23:53.200 company. Or they sell knowledge. The sources 00:23:53.200 --> 00:23:56.079 mentioned platforms like RGPL Academy and coffee. 00:23:56.200 --> 00:23:58.619 Education is a huge revenue stream. How to be 00:23:58.619 --> 00:24:00.900 an influencer, how to edit photos like I do, 00:24:01.059 --> 00:24:04.240 my secret recipe for sourdough. It is monetizing 00:24:04.240 --> 00:24:06.779 expertise. It's a much more stable revenue stream 00:24:06.779 --> 00:24:08.960 than just waiting for a brand deal to land in 00:24:08.960 --> 00:24:11.140 your inbox. There is one group, though, that 00:24:11.140 --> 00:24:13.460 has completely disrupted this economy recently, 00:24:13.519 --> 00:24:15.660 and we have to talk about them. Student athletes. 00:24:15.940 --> 00:24:19.269 Yeah. The whole NIL revolution. This is a seismic 00:24:19.269 --> 00:24:21.750 shift in the U .S. sports economy. I mean, for 00:24:21.750 --> 00:24:25.289 decades, the NCAA operated as a cartel that prevented 00:24:25.289 --> 00:24:27.950 athletes from earning any money, despite the 00:24:27.950 --> 00:24:30.369 universities making billions of dollars off their 00:24:30.369 --> 00:24:33.190 labor. The myth of amateurism. A myth which the 00:24:33.190 --> 00:24:35.990 Supreme Court essentially blew up in the case 00:24:35.990 --> 00:24:39.789 NCAA v. Alston back in 2021. The ruling allowed 00:24:39.789 --> 00:24:42.609 college athletes to finally monetize their name, 00:24:42.670 --> 00:24:45.759 image, and likeness, or NIL. So suddenly you 00:24:45.759 --> 00:24:48.220 have college kids becoming millionaires overnight. 00:24:48.720 --> 00:24:50.359 And not just the star quarterbacks, which is 00:24:50.359 --> 00:24:52.519 the fascinating part. The sources specifically 00:24:52.519 --> 00:24:54.920 mentioned the Cavender twins. They played basketball 00:24:54.920 --> 00:24:57.400 at Fresno State and then at Miami. They weren't 00:24:57.400 --> 00:24:59.740 necessarily the WNBA's number one draft picks, 00:24:59.920 --> 00:25:02.500 but they were absolute content geniuses. They 00:25:02.500 --> 00:25:05.019 built a massive TikTok following. They understood 00:25:05.019 --> 00:25:07.599 the assignment. They did. Or look at Adrian Nunez, 00:25:07.599 --> 00:25:09.740 a basketball player at Michigan. He played very 00:25:09.740 --> 00:25:11.359 few minutes on the court, but he had millions 00:25:11.359 --> 00:25:13.299 of followers on TikTok. He was reportedly making 00:25:13.299 --> 00:25:16.460 more money than his coaches. It completely decouples 00:25:16.460 --> 00:25:18.710 athletic performance from... economic value. 00:25:18.910 --> 00:25:20.930 So you don't have to be the best player anymore. 00:25:21.029 --> 00:25:22.450 You just have to be the most interesting one. 00:25:22.569 --> 00:25:24.829 And that bridges the gap between the traditional 00:25:24.829 --> 00:25:27.569 celebrity athlete and the modern influencer perfectly. 00:25:27.990 --> 00:25:30.930 It forces universities to become content incubators. 00:25:31.309 --> 00:25:33.710 If you want to recruit the best players now, 00:25:33.829 --> 00:25:36.150 you have to promise them that you can help build 00:25:36.150 --> 00:25:38.809 their brand. So we have the money. We have the 00:25:38.809 --> 00:25:40.930 history. Now we have to look at the dark side. 00:25:41.250 --> 00:25:45.170 Section five, regulation, controversy, and ethics. 00:25:45.960 --> 00:25:48.420 Because all of this rapid growth has happened 00:25:48.420 --> 00:25:51.079 largely without any guardrails. It has been the 00:25:51.079 --> 00:25:54.019 Wild West for 20 years. And as always, regulation 00:25:54.019 --> 00:25:56.579 lags way behind technology. But we are finally 00:25:56.579 --> 00:25:58.660 starting to see the hammer come down. And the 00:25:58.660 --> 00:26:00.500 core issue has always been deception, right? 00:26:00.640 --> 00:26:03.180 The blurring of the lines. Right. Is this a genuine 00:26:03.180 --> 00:26:05.700 recommendation from a person I trust? Or is it 00:26:05.700 --> 00:26:08.279 a paid advertisement? For a long time, influencers 00:26:08.279 --> 00:26:11.059 fought tooth and nail against disclosing. They 00:26:11.059 --> 00:26:13.839 felt that putting hashtag odd on a post ruined 00:26:13.839 --> 00:26:16.319 the aesthetic. It broke the spell of authenticity. 00:26:16.700 --> 00:26:19.519 But not disclosing it is basically fraud. Essentially, 00:26:19.660 --> 00:26:22.480 yes. And it leads to absolute disasters like 00:26:22.480 --> 00:26:25.779 the Fyre Festival. The Fyre Festival, the cheese 00:26:25.779 --> 00:26:28.200 sandwich that launched a thousand lawsuits and 00:26:28.200 --> 00:26:30.900 two documentaries. But before the disaster, it 00:26:30.900 --> 00:26:33.779 was a marketing triumph. The organizers paid 00:26:33.779 --> 00:26:36.240 Kendall Jenner, Bella Hadid, and hundreds of 00:26:36.240 --> 00:26:39.019 other influencers to post a simple, plain orange 00:26:39.019 --> 00:26:42.200 square on their Instagram feeds. No context, 00:26:42.339 --> 00:26:45.130 just an orange square and a link. It created 00:26:45.130 --> 00:26:48.490 this immense FOMO, this fear of missing out. 00:26:48.589 --> 00:26:51.089 But the influencers, they didn't verify the product. 00:26:51.289 --> 00:26:53.190 They didn't know if the festival was even real. 00:26:53.289 --> 00:26:55.089 And most of them didn't disclose that they were 00:26:55.089 --> 00:26:58.750 paid, in some cases, $250 ,000 just to post that 00:26:58.750 --> 00:27:01.269 orange square. When the festival collapsed into 00:27:01.269 --> 00:27:03.890 a I, Lord of the Flazies scenario on a Bahamian 00:27:03.890 --> 00:27:05.890 island, the public turned on the influencers. 00:27:06.190 --> 00:27:08.390 It was a huge wake -up call. It showed that influence 00:27:08.390 --> 00:27:10.990 carries liability. So now regulators like the 00:27:10.990 --> 00:27:13.950 FTC in the U .S. and the AANA in Australia are 00:27:13.950 --> 00:27:16.210 getting aggressive. They are. The standard now 00:27:16.210 --> 00:27:19.450 is that a paid promotion must be clearly distinguishable 00:27:19.450 --> 00:27:22.269 from organic content. You can't bury the disclosure 00:27:22.269 --> 00:27:24.309 in a sea of 30 hashtags at the bottom of the 00:27:24.309 --> 00:27:26.430 caption. It has to be up front. That's why you 00:27:26.430 --> 00:27:28.670 see hashtag, ad, or paid partnership everywhere 00:27:28.670 --> 00:27:31.750 now. But it gets even more serious when it involves 00:27:31.750 --> 00:27:34.150 health and medicine. The Kim Kardashian case 00:27:34.150 --> 00:27:36.170 mentioned in the sources is a perfect example 00:27:36.170 --> 00:27:38.829 of this. The Declagius case. So Kim Kardashian 00:27:38.829 --> 00:27:41.069 promoted a prescription drug for morning sickness 00:27:41.069 --> 00:27:43.869 on her Instagram. She wrote this glowing caption 00:27:43.869 --> 00:27:46.190 about how much it helped her during her pregnancy. 00:27:46.490 --> 00:27:48.430 But she left something pretty important out. 00:27:48.549 --> 00:27:51.430 She left out the laundry list of potential side 00:27:51.430 --> 00:27:54.150 effects. Now, if Pfizer runs a TV commercial 00:27:54.150 --> 00:27:57.210 for a drug, half the ad is the guy talking really, 00:27:57.269 --> 00:27:59.650 really fast about all the side effects. That's 00:27:59.650 --> 00:28:02.299 the law. Kim didn't do that. And the FDA stepped 00:28:02.299 --> 00:28:04.920 in. They did. And they stepped in hard. They 00:28:04.920 --> 00:28:07.059 sent a formal warning letter. She had to take 00:28:07.059 --> 00:28:09.079 the post down and issue a public correction. 00:28:09.500 --> 00:28:12.519 It established a huge precedent. If you are selling 00:28:12.519 --> 00:28:14.660 medicine, you are subject to medical advertising 00:28:14.660 --> 00:28:17.319 laws, regardless of whether you are the TV network, 00:28:17.539 --> 00:28:20.720 NBC, or a reality star on Instagram. It turns 00:28:20.720 --> 00:28:23.599 the Instagram feed into a regulated commercial 00:28:23.599 --> 00:28:26.160 space. Which is exactly what it is. But the newest 00:28:26.160 --> 00:28:28.380 crackdown is the one that fascinates me the most. 00:28:29.099 --> 00:28:34.539 August. 2024, the bot ban. This is a direct attack 00:28:34.539 --> 00:28:38.299 on the fake internet. The FTC voted unanimously 00:28:38.299 --> 00:28:41.240 to ban marketers from using fake user reviews 00:28:41.240 --> 00:28:43.920 created by AI chatbots. So you can't just spin 00:28:43.920 --> 00:28:46.259 up ChatJPT anymore and say, write me 500 five 00:28:46.259 --> 00:28:49.180 -star reviews for this toaster. Exactly. And 00:28:49.180 --> 00:28:51.579 more importantly for influencers, they banned 00:28:51.579 --> 00:28:54.440 the purchasing of fake followers and fake engagement. 00:28:54.859 --> 00:28:57.420 Buying followers has been the dirty little secret 00:28:57.420 --> 00:29:00.119 of this industry for a decade. It has. The whole 00:29:00.119 --> 00:29:03.000 fake it till you make it philosophy. Influencers 00:29:03.000 --> 00:29:05.579 would buy 50 ,000 bots to make themselves look 00:29:05.579 --> 00:29:07.759 more popular so that real brands would hire them. 00:29:08.160 --> 00:29:11.240 It's a Ponzi scheme of attention. The FTC is 00:29:11.240 --> 00:29:13.700 now saying that this is officially a deceptive 00:29:13.700 --> 00:29:16.299 trade practice. If you are selling influence, 00:29:16.640 --> 00:29:19.539 that influence must be human. This feels like 00:29:19.539 --> 00:29:22.019 a battle for reality itself. Yeah. We have AI 00:29:22.019 --> 00:29:24.079 influencers who aren't real. We have bot followers 00:29:24.079 --> 00:29:26.339 who aren't real. We have deep fakes. The regulators 00:29:26.339 --> 00:29:28.819 are trying to draw this tiny circle around humanity 00:29:28.819 --> 00:29:31.579 and say this part at least has to be real. And 00:29:31.579 --> 00:29:34.559 it is a losing battle, frankly, but it's a necessary 00:29:34.559 --> 00:29:37.099 one to fight. So we have covered a lot of ground 00:29:37.099 --> 00:29:40.380 here. We've gone from a 1664 definition of religious 00:29:40.380 --> 00:29:43.740 influence to Eleanor Roosevelt selling margarine 00:29:43.740 --> 00:29:46.819 to the economics of the long tail and all the 00:29:46.819 --> 00:29:49.539 way to the AI future. It's a massive, massive 00:29:49.539 --> 00:29:52.000 arc. If we have to distill all of this down, 00:29:52.140 --> 00:29:55.299 what is the so what for the listener? Why does 00:29:55.299 --> 00:29:57.940 any of this matter if you aren't trying to be 00:29:57.940 --> 00:30:00.160 an influencer yourself? It matters because this 00:30:00.160 --> 00:30:02.619 is the new economy of trust. The source material 00:30:02.619 --> 00:30:05.420 cites a report from SignalFire that calls the 00:30:05.420 --> 00:30:08.119 influencer economy the fastest growing type of 00:30:08.119 --> 00:30:10.579 small business. But deeper than the economics, 00:30:10.920 --> 00:30:13.740 it represents a fundamental shift in how we as 00:30:13.740 --> 00:30:16.700 a society. Discover truth. We've moved from trusting 00:30:16.700 --> 00:30:18.859 institutions to trusting individuals. Exactly. 00:30:18.880 --> 00:30:21.460 50 years ago, you trusted the news anchor. You 00:30:21.460 --> 00:30:23.440 trusted the government agency. You trusted the 00:30:23.440 --> 00:30:26.319 big brand with the factory. Today, trust has 00:30:26.319 --> 00:30:28.920 decentralized. We trust the face on the screen. 00:30:29.079 --> 00:30:31.019 We trust the person who feels like a friend, 00:30:31.160 --> 00:30:33.400 even if they're a stranger. Which is empowering 00:30:33.400 --> 00:30:36.059 in a way. It democratizes influence. Anyone can 00:30:36.059 --> 00:30:39.140 have a voice. It does. But it also completely 00:30:39.140 --> 00:30:42.289 fragments reality. When everyone has their own 00:30:42.289 --> 00:30:45.069 trusted source, we lose a shared baseline of 00:30:45.069 --> 00:30:47.589 truth. And without that baseline, society becomes 00:30:47.589 --> 00:30:50.369 very, very difficult to manage. And that leads 00:30:50.369 --> 00:30:52.329 us to the final thought, the final question to 00:30:52.329 --> 00:30:54.309 leave everyone with. We talked about virtual 00:30:54.309 --> 00:30:56.509 influencers. We talked about the efficiency and 00:30:56.509 --> 00:30:59.170 perfection of AI. Right. And I want to leave 00:30:59.170 --> 00:31:01.640 you with this question. As this AI technology 00:31:01.640 --> 00:31:05.000 advances, these virtual influencers are going 00:31:05.000 --> 00:31:07.440 to get better. They will be more charming, more 00:31:07.440 --> 00:31:09.799 funny, more empathetic, and more consistent than 00:31:09.799 --> 00:31:12.200 any human could ever hope to be. They will never 00:31:12.200 --> 00:31:14.500 have a bad day. They will never have a scandal. 00:31:14.559 --> 00:31:17.380 They'll be perfect. They'll be perfect. So will 00:31:17.380 --> 00:31:20.140 we eventually prefer the perfectly curated consistency 00:31:20.140 --> 00:31:23.380 of an AI personality over the messy, unpredictable, 00:31:23.779 --> 00:31:27.380 flawed authenticity? of a human being. And if 00:31:27.380 --> 00:31:30.880 an AI influences you to buy a product or to adopt 00:31:30.880 --> 00:31:32.960 a political belief or to vote for a candidate, 00:31:33.099 --> 00:31:35.339 who is actually doing the influencing? Is it 00:31:35.339 --> 00:31:37.539 the code? Is it the corporation that owns the 00:31:37.539 --> 00:31:40.220 server? Or is it just a perfect reflection of 00:31:40.220 --> 00:31:42.160 what the algorithm already knows we want to hear? 00:31:42.400 --> 00:31:44.019 That is the question we are all going to have 00:31:44.019 --> 00:31:46.539 to answer very, very soon. Something to think 00:31:46.539 --> 00:31:48.460 about the next time you find yourself double 00:31:48.460 --> 00:31:51.480 -tapping a photo. Thank you for listening to 00:31:51.480 --> 00:31:53.559 this deep dive. We will see you next time.