It definitely works, I used it to promote my last app. I spent $300 on sponsored posts and received a return of $3000. A friend of mine spent $4000 on Instagram shout-outs and got 100,000 users on his social media platform.
Those numbers are idiotic, and it couldn't be more obvious that they're made up. You don't just pay for "sponsored posts" on peoples walls and magically make money.