Under the Influence

Two influencers walk into a shopping mall

is hawk tuah clean girl? i ask, as my dad tells me how the job search is going

A while back, I wrote a viral post about intellectual property rights, which quickly went pseudo-viral after getting featured on Substack Reads (which is like, a newsletter of sorts that recommends and highlights articles). A friend told me about a lawsuit that is sort of similar, and this is usually a fun topic with zany characters, so we can go into it at some length to explore a “deeper” question: what’s the economic importance of influencers?

Also, a link to the previous post just in case you want to read it:

The Beige of Pigs

The story here is about two influencers: Alyssa Sheil and Sydney Nicole Gifford. The two are “Amazon influencers”, aka people who buy things and recommend them to their followers, and they both specialize in the “clean girl” aesthetic. One of them (Gifford) is now suing the other for infringing on her intellectual property by copying the products she reviews, the general vibe of her videos, and also her appearance - which she claims started after the two of them met up at a shopping mall.

What is the clean girl aesthetic? Well, it’s uh, like, mostly about beige. It’s about wearing simple, basic clothing in neutral tones, simple hairstyles, no-show makeup, and having an interior design mostly inspired by minimalistic Scandinavian style interiors, more beige, and natural light. That it’s unbelievably generic and bland seems that it is… counterintuitive for a trademark dispute. But what’s the idea here? Well, as I say in my other post, copyright and trademarks are a bit complicated themselves. Copyright refers to the rights of an author over their intellectual work: art, a recipe, etc, while a trademark is a way to distinguish the brand of the creator (logos, fonts, colors). And a patent is for a technical innovation, but that’s obviously irrelevant.

At a glance, it seems that maybe she could get copyright over some creative decisions here. A viral post from last week helps make sense of this: in the movie Wicked, a lot of fans commented that the slippers worn by Dorothy in a cameo are silver, not the iconic Wizard of Oz red. Why? Well, Wicked (movie and musical and also, confusingly enough, books) are an adaptation of the novel The Wizard of Oz, not of the movie. The novel has the slippers being silver and basically the same plot elements, and it entered the public domain in 1956; however the 1939 movie starring Judy Garland is not in the public domain, and therefore its original creative decisions, i.e. the ones not from the book, are protected by copyright. This led to a trademark/copyright dispute between Disney and Warner Bros over Disney’s Oz The Great And Powerful, where (to sum up the very complicated dynamic), the agreement was that Disney could use whatever they wanted from the book, but couldn’t use anything that originated in the movie - so they had a bunch of lawyers examine all the designs to make sure that the Emerald City wasn’t too close to the one from the movie, or that the Wicked Witch (who also can’t be called that) isn’t too similar a shade of green.

So it does seem that there is some legal precedent for having intellectual property rights over certain creative aspects, but which ones Gifford has a valid stake in is not entirely clear. Her look, for example, is just based on a broadly generic “clean girl” style, and their interior decor has the same inspiration, so it’s not really all that feasible that either can lay a realistic claim over having your entire life in the color beige. The Verge article mentions the curation of storefront items, but again, these get promoted by Amazon itself, so there’s probably no real way of ensuring that Sheil copied Gifford. The one item that Gifford can probably try to lay claim over is the copying of camera angles and such - those are copyrightable.

However, a second extremely bizarre copyright dispute poses problems for her. Back in 2020¹, the New York Times reported about a copyright infringement lawsuit by one author (Addison Cain) over another (Zoe Ellis), who claimed that Ellis had copied numerous plot points from Cain’s novels. The twist here is that both sets of novels are in a genre known as Omegaverse, which is a kind of erotica where humans have werewolf-inspired sexualities; and the “plot points” that Cain claimed Ellis had copied were, well, staples of the genre. Cain lost her suit (kinda) because of a doctrine known as scenes a faire, which states that you can’t claim intellectual property rights over tropes of a genre - so Halloween can’t sue Nightmare on Elm Street for the killer coming back to life after dying in the first movie. Because there’s only so many ways to take commercially viable pictures of like, an eccru decorative gourd, I think Gifford is completely beyond the pale here.

Of course, given how insane and lawless US courts have been recently, I wouldn’t put it beyond them to give her something, but this is yet another way in which intellectual property rights are a way for people to unproductively squat over things they did nothing to produce and demand rents from everyone else.

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Accusing each other of plagiarism, perhaps without involving the courts, is not uncommon over influencing. For instance, a while back, a girl who does DIY videos accused another DIY content creator of copying her ideas - of course, the problem is that do it yourself implies that people can, well, do it without permission. That the interior designs they were doing were heinous is, of course, beyond the point. Then two Game of Thrones related creators had a spat over who owned elements of a theory about which of Daenerys Targaryen’s dragons was going to lay eggs. So this is just usual stuff - people claiming credit over ideas and beefing about it.

The fact that influencers are, largely, very stupid and unserious does not mean they cannot be important. The influencer economy is massive, rounding out at something like 250 billion dollars, and has become a common career aspiration for gen Z people thanks to the lavish lifestyles it can provide. For example, the highest paid influencer in the world, Mr Beast, is an example of this - he makes over 50 million dollars a year from ad revenue on his posts, direct sales of products (merch, such as the Hawk Tuah hat in the banner), and via sponsorships or brand deals.

The main difference between a traditional star and an influencer is that the influencer’s brand comes, not from their on-screen deeds, but from their authenticity - their personality, unique style, unique taste, etc. The British Fashion Awards were a few days ago, and I was pretty stoked because the winner of the Model of the Year award was Alex Consani, of whom I’m a long-time fan - she’s a social media sensation, largely, because of her quite weird personality and sense of humor.

a friend sent this to me on discord when i told her the topic of this post

However, this also gets to the dark part of the industry: not every person who has a unique personality or outlook actually succeeds. In fact, Mr Beast is. by his own admission, a soulless, personality-less husk of a person - in line with what Youtuber/influencer Mina Le talks about in a recent and very interesting video: the influencers who get the most traction are the most “generic” - which is both linked to their identity, and harming personal style and fashion in general. This opens the door to influencing: while just being yourself on camera as a job sounds ideal (especially to Gen Z, which has a different relationship to work than previous generations), the industry can frequently be exploitative and unfair, and most influencers don’t, in fact, make any money- particularly in a seemingly oversaturated market.

Both of these are why the two ladies in the clean girl fight were so upset - having your “bit” stolen can actually threaten your livelihood - because online advertising is a distinct beast from traditional or even online advertisement, and it is driven by personalities. Online attention is a largely fixed pie, and time online decreases with income, which means that influencers have to actually compete over a very scarce resource - particularly when the real concern of saturation means that sellers can squeeze influencers out of profits, given their growing market power.

It’s also worth noting that the friendly, reassuring, familiar tone and presence of influencers may also benefit the brands they promote, who get to advertise while barely disclosing that fact, as well as influencers becoming “captured” by brands and being unable to negatively review their sponsors - leading to uninformed or even misinformed purchases for whom nobody is liable. This is especially important when younger cohorts get most of their product information and recommendations online, particularly from social media in general and influencers specifically.

What’s a hawk tuah beast

One realm where “influencing” has been extremely influential is, well, finance: aas you might have heard, Haliey Welch (yes it’s spelled Haliey), better known as “Hawk Tuah”² is currently in hot water because she launched a cryptocurrency venture (“Hawk Tuah Coin”) which turned out to be, well, a pump and dump scheme. Besides the obvious (laugh and make “Coin Tuah mine on that thang” jokes), it seems that financial influencing is a whole other beast compared to regular influencing.

Financial influencers (known as “finfluencers”) are an entirely different breed, especially because of their power to move the markets: 60% of investors under 35 listen to social media personalities for investment advice, a similar degree of influence as actual professional financial advisors. Coupled with the fact that the most “online” households are also the lowest income, this means that finfluencers should be under even more scrutiny: are they directing their followers to good investments?

First, the question is whether they do actually influence their followers: they do, such that following a finfluencer increases the likelihood of iterating a trade the influencer makes quite substantially - an effect which is larger for bigger influencers, more active influencers, and also for followers who listen to fewer sources of advice. What kind of advice do they give? Well, the biggest type of finfluencer are “long term rational” investors, the kind that recommends going for index funds and other long-run, safe assets. The second biggest type are “fanatics”, people who constantly make big, risky short-term bets; short-run rational investors are, unsurprisingly, extremely unpopular. However, it’s worth noting that finfluencer followers tend to listen to more reasonable advice, such as “buy ETFs”, at higher rates than risky trade suggestions - so whether finfluencers propose good ideas is more or less tangential to whether they’re actually listened to. Finally, influencers affiliated with a platform usually do manage to increase activity on that platform, but don’t tend to have worse or better performance than others - but do trade more often, opening the door to potential conflicts of interest. Influencers are, surprising nobody, disproportionately male, and male influencers are also signficiantly more popular and more influential.

Nonetheless, when looking at investing on smartphone apps specifically, a different, and more worrying pattern emerges: on their phones, people make significantly riskier investments than on their computers. This can be found in a study looking at German banks introducing a day-trading option for their smartphone app provides a reasonably exogenous before-and-after comparison of the same subjects, avoiding many causal inference pitfalls. The effect is particularly strong for “lottery stocks”, assets with relatively low value but highly volatile and skewed returns.

In general, app investors tend to invest in broadly similar ways to “normies”, albeit slightly more in stocks with high past performance, but with a larger emphasis on stocks the user had personal experience in (the biggest example here was cannabis). These effects are due to traders becoming active later in the day and in response to in-app prompts, and is not related to the specific assets - consistent with previous findings on other app-based trader studies, and with much older papers showing that, when switching from landline-based to computer-based trading, people traded more often and less profitably.

Overall, it seems that investing on your phone is more linked to making frequent, risky trades, but not for all consumers. This means that the itch scratched by investing on your phone isn’t necessarily to secure a loftier financial future - it’s to secure a thrill. This is similar to how shopping websites developing an app results in more frequent purchases - it’s the dopamine rush. I don’t want to imply they’re the same thing for all people, but for many, online investing and online shopping, both heavily tied to and promoted by influencers, track the same neural pathways as online gambling: securing a quick thrill via financially irresponsible conduct.

In detail, app gambling is quickly reaching crisis proportions: they seem to be staggeringly addictive, and have resulted in an epidemic of gambling issues in (disproportionately men) as young as 14. In Brazil, as much as 20% of government welfare programs can be spent on online gambling, leading to an explosion in popularity of super-high interest loans. If we look at the balance sheet impacts, outside of the edge cases these bets tend to displace investment, but not consumption or other forms of gambling - so people tend to consider them a “making money” vehicle, and not a form of entertainment. Legalizing sports betting thus harms consumer financial health substantially, and in particular (negatively) impacts the most credit and income-constrained households the most.

Conclusion

So overall, I understand influencers, but I’m not very sympathetic to their role in the digital “attention economy”. Their whole deal is to direct consumers to quick thrills via spending (almost always, irresponsibly) shortly after watching a video (I presume). Given how social media use is strongly correlated with bad mental health, and how social media itself is very addictive and tends to displace other forms of social activity, I consider this type of dynamic very morally murky. If you add in that financial influencers may, willingly or unwillingly, be promoting a variety of grifts and scams like the “Hawk Tuah pump and dump”, as well as market panics (like Silicon Valley Bank, which was either maliciously or stupidly started by venture capitalists). The market may be rational, but many of the individuals in it… are not, and their irrationality can hold for a heckuva lot longer than you’d think. That’s why I’m sanguine about the social value of this whole thing, and why I think the “online casino” economy has to be nuked back to the Stone Age, The Economist be damned.

Also I’m NGL, I never thought the phrase “hawk tuah pump and dump” would appear on this Substack absent a drastic shift in direction.

1. The year is relevant because Cain (who is extremely lawsuit-friendly) later claimed that the New York Times piece was fraudulent because an editor resigned for running a shoddy piece shortly after. Except the piece was an opinion article by US Senator Tom Cotton defending the idea that the US military should murder Black Lives Matter protesters.

2. Mrs Tuah is an influencer of sorts who leveraged a viral clip of her giving, uh, fellatio advice into an online media career. I am an ironic fan of sorts.