Why and When Disclosing Influencer Marketing as Advertising Matters

Why and When Disclosing Influencer Marketing as Advertising Matters

Zeynep Karagür, Sabanci Business School, Sabanci University

Based on the paper “How, why, and when disclosure type matters for influencer marketing” by Zeynep Karagür, Jan-Michael Becker, Kristina Klein, and Alexander Edeling. 

With the rise of social media platforms such as Instagram and TikTok, influencer marketing—a tactic in which firms pay individuals (so-called influencers) to influence consumer preferences—is gaining popularity as a marketing strategy. Consumers perceive influencers as more trustworthy than traditional celebrities, and influencers are increasingly using this trust to blend advertising into their everyday messages. Similar to product placements in movies, consumers often struggle to recognize influencer marketing easily, as advertising posts from influencers closely resemble non-commercial content on the platforms. Hence, to protect consumers from deceptive marketing practices and increase transparency, many countries have implemented regulations that require the disclosure of influencer marketing as advertising. 

However, standardized rules are still lacking, and the enforcement of regulations varies greatly across and within countries. While some influencers have faced fines for not disclosing the commercial nature of their content, others have been exempt from this obligation if other factors, such as a high number of followers, facilitate consumers’ recognition of advertising—an assumption that has not been tested before.

In our study published in the International Journal of Research in Marketing (IJRM), we investigate this assumption alongside the effects of different disclosure types on influencer trustworthiness and post engagement. The findings reveal that influencer marketing disclosure is a double-edged sword. While clearly disclosing advertising posts as such using platform-implemented disclosure tools can undermine the trustworthiness of influencers and decrease engagement with the post, it can also increase trustworthiness, as consumers value the transparency of the influencer. In addition, we demonstrate that influencers with a large follower base and a strong history of engaging in advertising are perceived as less trustworthy because of higher advertising expectations and perceptions, even when they do not disclose the commercial nature of their posts. 

Our study offers the following recommendations for public policymakers, firms, and influencers. For public policymakers, our findings reveal that while influencer characteristics (e.g., the number of followers) can facilitate advertising recognition, using clear disclosures is the safest way to increase transparency for consumers. Our study also alleviates concerns from firms and influencers about the negative effects of disclosures, as we also find a positive effect. Thus, influencers should clearly disclose advertising content to avoid potential legal consequences. Finally, influencers are well-advised to carefully consider expanding their follower base and brand portfolio to not undermine their trustworthiness.

Link: https://www.sciencedirect.com/science/article/abs/pii/S0167811621000732