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October 19, 2022
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 any other social media platform.
A new study from the University of Washington examines the impact of factors related to influencers, their posts and their followers on marketing success. Social media influencers are usually digital creators who have built a large following due to their knowledge of specific topics, such as beauty products, food, or pets.
Recently published online and forthcoming in the Journal of Marketing, the study is one of the first to include cost data in its reviews of 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 spending based on study insights could result in a 16.6% increase in engagement.
Engagement is how people respond to content online, such as liking, commenting, or reposting. For this study, the researchers prioritized the number of reposts because it represents a deep form of engagement where subscribers 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 produces a higher return on investment, or ROI, than most other types of marketing.
“I predict that in the future a lot of marketing will be outsourced,” Palmatier said. “As a marketing manager, you will manage a portfolio of influencers, much like Nike manages a portfolio of celebrities.”
For this study, the researchers tested data obtained from Weibo, a microblogging website which is one of the largest social media platforms in China. The data consisted of 5,835 posts written by 2,412 influencers linked to 1,256 campaigns for 861 brands as of October 2018. The brand’s sponsors spanned 29 categories, including beauty products, e-commerce platforms and food and drink .
Researchers found that influencer originality, follower size, and sponsor visibility — brand prominence in a post — improve a post’s effectiveness, while posts that advertise new products decrease it. Followers are less likely to repost product launches due to the increased risk of vouching for something unknown to their networks.
Influencer activity rate, post-positivity level, and follower brand fit, or the extent to which an influencer’s follower interests match the sponsor, all produce effects in inverted U shape. It hurts engagement if influencers post too much, for example, 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 even forget who you are,” Palmatier said. “But if you overdo it, it kind of devalues you. This is what we call an inverted U-shaped effect, which means that there is an optimal point of activity where something works best.
When it comes to brand fit, researchers found that companies should look for influencers with overlapping but not an exact match.
“If you only talk to the people most likely to buy your product, those people already know it,” Palmatier said. “Now if you’re going to people who fit the brand really well, they’ll never buy it because it’s just a bad fit. You want people who have some interest, but probably don’t know this product. “
Palmatier 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 mostly popular with longtime consumers.
“If you think about the marketing department at Tiffany, it was probably a group of people who knew their historical targets,” Palmatier said. “What they’ve done is spend a very small portion of their budget bringing in influencers, and those influencers have had returns many times greater than their own product managers.”
Influencers compete in the open market to increase their followers and engagement, Palmatier said, which is a major factor in their success.
“They had to be smart,” he said. “They had to find a niche. In other words, influencers win their following by understanding their audience very well. When I go to an influencer with my product, they’re going to create posts that resonate with their followers. Tiffany never figured out how to position her product for this group, but influencers were able to connect.
Another benefit of influencer marketing is micro-targeting, Palmatier said. Customers can self-segment on social media by following specific topics that interest them. For example, a person can follow hashtags related to Paris before a vacation.
“It’s crowdsource positioning,” Palmatier said. “You give a product to influencers and they will position it. People also see influencers as more authentic because mentally you feel like you’re “friends” with the people you follow on social media – even if you’ve never met them – so they seem more authentic. when positioning the product.”
Other co-authors were Fine F. Leung and Flora F. Gu from Hong Kong Polytechnic University; Yiwei Li from Lingnan University; and Jonathan Z. Zhang of Colorado State University.
The research was supported by the Direct Grant and Faculty Research Grant from Lingnan University.
For more information, contact Palmatier at [email protected].
Tag(s): Foster School of Business • Robert Palmatier