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Influencer marketing reflects key economic concepts like elasticity and supply & demand.

Micro-influencers face elastic demand — brands may switch if prices rise.

Macro-influencers face inelastic demand — brands may pay more for large audiences.

As more influencers enter the market, supply increases, potentially leading to surplus.

This can reduce effectiveness due to the congestion effect — too many similar promotions compete for attention.

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Influencer marketing offers a more personal and authentic connection.

Brands must balance transparency and creativity to overcome challenges.

As the digital landscape evolves, staying adaptable is key!

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Influencer marketing and its impact on consumer behavior

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Influencer marketing and its impact on consumer behavior

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Influencer marketing is reshaping consumer behavior in an increasingly interconnected world.

Social media platforms like TikTok, Instagram, and YouTube have transformed brand-audience interactions.

Analysis of the economic equilibrium model to show influencer marketing's impact.

It will also analyze non-standard factors, suggest policy recommendations, and assess stakeholder effects.

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Example of an equilibrium regarding price and supply/demand curve. Can change depending on regulations, new firms, cheaper influencers, etc

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This study does a great job of showcasing the effects of the equilibrium model on influencer marketing and does a deep dive into the relationship between all marketing.

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Policy that could mitigate influencer marketing

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Policy that could mitigate influencer marketing

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The main policy that would mitigate the issue we discuss throughout our essay is consumer protection and privacy. Recently, many people have been concerned about the information they are reading and wondering if it is misleading or not. With social media and other platforms carrying such a large weight in todays society it is extremely important that the information being published is accurate. With the Consumer Protection Act of 2019, it ensures endorsements are not misleading and emphasizes informed consent around data collection. This addresses issues like deceptive advertising and data privacy.

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The two pictures above show the contrast between Abercrombie & Fitch's advertisements in 2015 vs in 2025. 10 years ago all advertisements were not very inclusive of all ages and showed only younger individuals in their campaigns. Now that social media is more popular and inclusive Abercrombie & Fitch is able to share their store to a larger population.

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Comparative Analysis or Real-World Examples

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Comparative Analysis or Real-World Examples

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Companies have always used models and celebrities that match their brand and know will promote their store to their targeted audience. This is especially the case for teens and young individuals as they are more easily influenced and inspired by celebrities who they look up to. Unsurprisingly, the average age of social media influencers is roughly 18 to 35. This demographic efficiently uses social media platforms such as TikTok and Instagram to influence the purchasing decisions of younger consumers. With the rapid increase in content creators, companies have broadened their search for influencers and have taken an interest in older women around 60.

To bring new innovation to the market, older influencers are bringing a new demographic to new stores. Stephanie Glover, who is 61 years old is an example of this new branch of influencers. She has helped companies create brand awareness and sell more products. Another older female posted a picture in an Abercrombie & Fitch dress which later sold out.

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One non standard factor that comes with influencing is PR packages. Public relations packages are when companies send influencers new releases or items from their store that the individuals get for free and can review and post to their followers. Not only are these influencers getting free things but they are also often paid for posting these videos. Sometimes this upsets viewers because the review doesn't feel authentic. Influencers are more likely to leave a good review because they get it for free. Also, this can give brands a bad reputation because they could be gifting to individuals that cannot afford their objects.

Another non standard factor that companies have to consider is what influencers post in addition to their advertisements. When a company asks an influencer to post a video or picture of their products, it is asking that influencer to be part of its brand. If the influencer posts something controversial or political, it will also reflect on the company.

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Brands are one of the primary stakeholders benefiting from influencer marketing across many different sectors.

Content creators themselves are also key stakeholders. Successful influencers gain financial benefits from higher user engagement and increased brand partnerships. However, the increasing competition in the influencer market can lead to oversaturation of similar content, reducing its impact. This can hurt the influencer's brand, making maintaining authentic relationships with followers harder. The pressure to constantly produce content can also affect mental health and creativity.