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Wanna hear the dirtiest lil secret?
Kaeya Majmundar
February 27, 2025
Have you ever heard of the term “kayfabe”?
It’s the unspoken rule in professional wrestling: the fight isn’t real, but everyone plays along as if it were real.
Wrestlers don’t “lie.” They commit to the act of fighting because that’s the game.
Influencer marketing works the exact same way.
The endorsements aren’t genuine, but advertisers and creators play along as if they are.
The system rewards the professional endorsement exaggerators, not the most honest influencer.
And that’s why deceptive influencer marketing has always been an inevitability.
But here’s the difference:
In wrestling, the audience knows it’s fake. They’re in on the act. And they pay billions to witness it ($2B/year). EVERYONE is bought in.
In influencer marketing, the audience doesn’t know.
They never agreed to the act.
They’re not playing along.
They’re being played.
(Side note for the lawyer brains in the house: this analogy has been the most effective way for me to explain why “puffery” as a loophole can’t apply in case you wanna try using it 🙃)
And that deception has been federally illegal since 1914.
With a $43,792 fine per post since October 2024.
🎭 The game theory behind influencer kayfabe
An influencer has two choices when promoting a brand:
✅ Be honest – Share real opinions, disclose sponsorships, avoid misleading claims.
🚨 Deceive – Exaggerate benefits, hide sponsorships, mislead consumers for money.
Most assume honesty should win. But when you break down the incentives, deception is mathematically inevitable.
What Happens When an Influencer Makes Their Choice?
Influencer’s Choice | Brand Pays More? | Audience Trusts More? | Algorithm Rewards? |
|---|---|---|---|
Honest | ❌ No | ✅ Yes (long term) | ❌ No |
Deceptive | ✅ Yes (short term) | ❌ No | ✅ Yes |
👀 If an influencer is honest:
They disclose sponsorships → engagement drops
They refuse to exaggerate → other influencers win the deal
They give real opinions → brands pay them less
💰 If an influencer deceives:
They boost engagement → algorithmically rewarded
They drive higher conversions → brands pay them more
They scale faster → overtake honest competitors
💀 Deception isn’t just an option. It’s the only viable move.
Once a few influencers start deceiving, everyone else is forced to follow, or they get left behind.
And this is exactly what’s been happening since 2016.
🚫 Every attempt to fix deceptive influencer marketing has failed
If deception is the default, how do you stop it?
Over the years, brands, platforms, and regulators have tried different approaches. None have worked.
❌ 1. Change the incentive structure
💡 Idea: stop paying influencers based on follower count. Instead, only reward real customers posting about products they actually bought.
🚨 Why it fails:
Customers buy products just to earn rewards.
They return products after cashing out.
They fake endorsements for products they don’t care about.
💀 End result: The system still optimizes for deception.
❌ 2. Let the market self-regulate
💡 Idea: If influencers deceive, their audiences will stop trusting them, and brands will stop working with them.
🚨 Why it fails:
Consumers have short memories.
Influencers can rebrand and recover within months.
Brands care more about results than ethics.
💀 End result: when money is involved, trust rarely enforces itself.
💡 Idea: If platforms buried deceptive content, influencers would be forced to play fair.
🚨 Why it fails:
Platforms optimize for viral distribution, aka the opposite of truth enforcement.
If deception drives virality, they’ll only reward it.
Platforms enforcing misleading ads is like a bank regulating itself.
💀 End result: No incentive for platforms to crack down.
❌ 4. Hope FTC fines will scare brands into enforcing compliance
💡 Idea: The FTC now fines brands $43,792 per deceptive post.
🚨 Why it fails:
Many brands assume they won’t get caught.
Some treat fines as a “cost of doing business.”
Regulation enforcement is slow and inconsistent.
💀 End result: Brands gamble that the FTC won’t come after them.
💰 How to make lying more expensive than genuine advocacy
If no single deterrent to deceptive influencer marketing works, from my perspective, the only way to force compliance is to stack multiple financial consequences together.
1️⃣ Brand Reputation Cost (Shame)
If a brand is exposed for deceptive advertising, it takes a PR hit.
Most brands panic when they trend for the wrong reasons.
🚨 Why it fails alone:
Most brands just issue a fake apology and move on.
Audience outrage fades within weeks.
💀 Verdict: Shame alone won’t stop deception.
2️⃣ FTC Fines & Penalties
The FTC now enforces real financial consequences for deception.
🚨 Why it fails alone:
Many brands think, “The FTC is slow, they won’t come after us.”
Even if fined, some brands just treat it as a business expense.
💀 Verdict: Fines alone won’t stop deception.
3️⃣ Class Action Lawsuits
When consumers feel misled by fake advertising, they can (and do) band together and sue brands for millions.
🚨 Why it fails alone:
Not every deceptive ad leads to a lawsuit.
Lawsuits take years, so the immediate risk feels low.
💀 Verdict: Lawsuits alone won’t stop deception.
♟️But all three combined? Checkmate.
🛑 Reputation cost alone? Brands recover.
🛑 FTC fines alone? Brands ignore them.
🛑 Lawsuits alone? Brands assume it won’t happen to them.
⚠️ But when all three hit at once? That’s a death sentence.
✔️ The financial damage is unbearable
✔️ The PR nightmare doesn’t go away
✔️ The legal risk becomes existential
✔️ Brands & influencers are forced to comply
🏁 The race to break influencer kayfabe has begun
For years, brands assumed that deceptive influencer marketing was a low risk, high reward game.
That era is over.
✔️ The FTC is enforcing real penalties.
✔️ Class action lawsuits are hitting brands that mislead consumers.
✔️ Reputation risk is harder to ignore.
In the WWE, breaking kayfabe was professional suicide. Wrestlers who exposed the act got blacklisted.
In influencer marketing, failing to break kayfabe is professional suicide. Brands that keep playing along will get fined, sued, and left behind —> because the rules of the game have changed.
Lying was the influencer marketing game. Now it’s the liability.
TLDR: Influencer kayfabe just went from lucrative to business suicide, my friends 🥊
Kaeya
