E-Commerce

Temu’s $962 Million Network of Fake Influencers Is Unraveling

(c) Temu
(c) Temu

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Temu has flooded Europe with cheap goods, and apparently with influencers who don’t exist, too. The Chinese online retailer spent about €830 million ($962 million) on partnership ads on Instagram and Facebook, according to an investigation, and much of it ran through what appear to be fake creator accounts. After the research became public, Temu largely shut the network down, Fortune reports.

73 of the Top 100 Accounts Likely Fake

The research comes from Online Risk Labs, a research group based in the Czech Republic that analyzed Temu’s advertising on Meta’s platforms over 16 months through April. Its findings:

  • The budget: Temu spent about €830 million on so-called partnership ads, which are served in the name of creators. They targeted users in all 27 E.U. countries and Britain.
  • The accounts: About 73 of the 100 most important creator partners were likely not genuine, according to the researchers, and the entire network comprised more than 12,000 accounts. Only eight of the top 100 were identity-verified.
  • The origin: Although the ads targeted Europe, 28 of the top 100 accounts were based in Russia and 19 in China, with only six in the E.U. or Britain. Some accounts had nonsensical names, and one changed its name 15 times.
  • The reach: In total, the network ran more than 1.4 million campaigns with about 17 billion impressions.

The biggest account, “Ya Lily,” had 183,000 followers on Instagram and promoted products with A.I.-generated images. Its content alone generated more than a billion impressions in 16 months, at times running about 225 Temu campaigns a day. “Among the top 100 influencers collaborating with Temu, there are certainly some real people among them. In my estimate, however, they account for no more than 15 to 20 percent,” Vendula Prokůpková of Online Risk Labs told Yahoo Finance.

Temu Pulls the Plug

After Fortune first reported on the research at the end of August, Temu reacted quickly. Within days, 54 of the top 100 accounts stopped running partnership ads, and the overall volume of those ads nearly halved. Neither Temu nor Meta responded to Fortune’s requests for comment.

The practice could have legal consequences. Advertising through accounts that pretend to be real people may violate E.U. and British rules against misleading advertising formats, on top of labeling requirements for A.I.-generated content. Meta is under pressure as well: the company ran the ads for years and earned handsomely from them.

Bargain Platforms Under Scrutiny

The revelations come at a bad time for Temu. The European Commission is already examining the platform over possible violations of the Digital Services Act, including its handling of illegal and dangerous products. Its rival Shein is also under scrutiny in Brussels, and both are designated as Very Large Online Platforms with especially strict obligations.

The method behind the ad network is likely to preoccupy the industry for a long time. With A.I.-generated images and videos, convincing creators can now be produced en masse and almost for free, making it ever harder for platforms like Instagram to tell who is really behind an ad.

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