About 70% of people between the ages of 18 and 29 use Instagram and it’s hard to spend a lot of time scrolling without coming across a sponsored post from an influencer. The same goes for just about every other social media platform.
New research from the University of Washington examines how factors related to influencers, their posts and their followers influence marketing success. Social media influencers are typically digital creators who have built a large following for their knowledge of specific topics, such as beauty products, food, or pets.
Recently published online and soon in the Magazine for Marketing, the study is one of the first to include cost data in its research on influencer marketing. Researchers found that if companies spent 1% more on influencer marketing, they would see an almost 0.5% increase in engagement. They also concluded that reallocating spend based on the insights from the study could lead to a 16.6% increase in engagement.
Engagement is how people respond to online content, such as liking, commenting, or reposting. For this study, researchers prioritized the number of reposts because it represents a deep form of engagement where followers choose to share content with their own networks.
Robert Palmatier, co-author and professor of marketing at the UW Foster School of Business, said influencer marketing currently delivers a higher return on investment, or ROI, than most other types of marketing.
“I predict that a lot of marketing will be crowdsourced in the future,” said Palmtier. “As a marketing manager, you’re going to manage a portfolio of influencers, just like Nike manages a portfolio of celebrities.”
For this study, researchers tested data obtained from Weibo, a microblogging website that is one of the largest social media platforms in China. The data consisted of 5,835 posts written by 2,412 influencers related to 1,256 campaigns for 861 brands in October 2018. The brand sponsors were divided into 29 categories, including beauty products, e-commerce platforms and food and drink.
Researchers found that influencer originality, follower size, and sponsorship prominence — brand awareness in a post — increase a post’s effectiveness, while posts announcing new products reduce it. Followers are less likely to repost product launches due to the increased risk of voiding something unknown to their networks.
The influencer’s activity rate, level of post-positivity and followers’ brand fit, or the degree to which an influencer’s followers’ interests match with the sponsor all produce inverted U-shaped effects. For example, it harms engagement if influencers post too much, but engagement also suffers if they post too little. This suggests that a balanced approach is most effective.
“If you don’t post, I’ll forget who you are,” said Palmatier. “But if you do too much, you get a little cheaper. It’s what we call an inverted U-shaped effect, which means there’s an optimal point of activity where something performs best.”
When it comes to brand fit, researchers found that companies should look for influencers with followers who overlap, but aren’t an exact match.
“If you only talk to people most likely to buy your product, those people already know,” Palmtier said. “Now if you go to people who are a terrible brand match, they will never buy it because it’s just a bad fit. You want people who have some interest but probably don’t know about this product.”
Palmtier used Tiffany & Co. as an example of a brand that has successfully used influencer marketing. There was a time when the company struggled to acquire younger customers, he said, because it was especially popular with older consumers.
“If you think about Tiffany’s marketing department, it was probably a group of people who knew their historical goals,” Palmtier said. “What they did was spend a very small portion of their budget to bring in some influencers, and those influencers got a multiple of the ROI than their own product managers.”
Influencers compete in the free market to increase their following and engagement, Palmtier said, which is a key factor in their success.
“They had to be smart,” he said. “They had to find a niche. In other words, influencers gain their followers by understanding their audience very well. If I take my product to an influencer, they are going to create posts that resonate with their followers. Tiffany never understood how to be product for that group, but influencers could connect.”
Another benefit of influencer marketing is microtargeting, says Palmatier. Customers can segment themselves on social media by following specific topics that interest them. For example, a person can follow hashtags related to Paris for a vacation.
“This is crowdsource positioning,” said Palmatier. “You give influencers a product and they start positioning it. People also see influencers as more authentic because you mentally feel like you’re really ‘friends’ with the people you follow on social media, even though you’ve never met them – so they appear more authentic when positioning the product.”
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Fine F. Leung et al, Influencer Marketing Effectiveness, Magazine for Marketing (2022). DOI: 10.1177/00222429221102889
Quote: Exploring which factors have the greatest impact on influencer marketing effectiveness (2022, October 20) retrieved October 20, 2022 from https://phys.org/news/2022-10-factors-biggest-impact- Effectiveness.html
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