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Natascha Ong Pleyer 0339980
Hana Kuniyasu 0340123
Nicole Jia Mae Khoo 0340958
Raniah Dowla Ahmed

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Significance & Justification of Research

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Significance & Justification of Research

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Abstract

Abstract
In the past few years, expenditure on influencer marketing has grown exponentially. The present study involves preliminary research to understand the mechanism by which influencer marketing affects consumers via social media. It proposes an integrated model-the social media influencer value model-to account for the roles of advertising value and source credibility. To test this model, we administered an online survey among social media users who followed at least one influencer. Partial least squares (PLS) path modeling results show that the informative value of influencer-generated content, influencer's trustworthiness, attractiveness, and similarity to the followers positively affect followers' trust in influencers' branded posts, which subsequently influence brand awareness and purchase intentions. Theoretical and practical implications are discussed.

Social media influencers are online personalities with large numbers of followers, across one or more social media platforms (e.g., YouTube, Instagram, Snapchat, or personal blogs), who have an influence on their followers (Agrawal 2016; Varsamis 2018). Contrary to celebrities or public figures who are well-known via traditional media, social media influencers are "regular people" who have become "online celebrities" by creating and posting content on social media. They generally have some expertise in specific areas, such as healthy living, travel, food, lifestyle, beauty, or fashion. A recent Twitter study suggested that consumers may accord social media influencers a similar level of trust as they hold for their friends (Swant 2016).

Consequently, influencer marketing refers to a form of marketing where marketers and brands invest in selected influencers to create and/or promote their branded content to both the influencers' own followers and to the brands' target consumers (Yodel 2017). Influencer-produced branded content is considered to have more organic, authentic, and direct contact with potential consumers than brand-generated ads (Talavera 2015). The popularity of influencer marketing has been growing exponentially. A recent report stated that, in 2018, 39% of marketers had plans to increase their budget for influencer marketing, and 19% of marketers intended to spend more than $100,000 per campaign (Bevilacqua and Del Giudice 2018).

Despite the existence of many studies that have investigated the effects of celebrity endorsers on advertising (e.g., Amos, Holmes, and Strutton 2008), this body of literature does not closely consider the uniqueness of social media influencers-in other words, content generators with "celebrity" status. Moreover, although there has been some recent research on influencer advertising (e.g., De Veirman, Cauberghe, and Hudders 2017; Djafarova and Rushworth 2017; Evans et al. 2017; Johansen and Guldvik 2017), none of this research has focused directly on the fundamental mechanisms of what makes influencer marketing effective. Neither has it empirically tested any comprehensive theoretical model (e.g., Djafarova and Rushworth 2017).

The current study aligns itself with McGuire's ( 2001) communication-persuasion matrix, which argues that various input components in persuasive communication-such as source, message, channel, receiver, and destination-determine its effectiveness. Within the scope of this study, we focus on the effects of factors pertaining to source and message in influencer marketing.

Influencer Marketing

Influencer marketing is a marketing strategy that uses the influence of key individuals or opinion leaders to drive consumers' brand awareness and/or their purchasing decisions (e.g., Brown and Hayes 2008; Scott 2015). The influencer's inherent characteristics play a vital role in enticing brands and marketers to pursue them closely. An advantage is that brands can opt for more affordable influencers compared with the exorbitant fees required to sign one or more renowned celebrity endorsers (Hall 2015). In addition, social media influencers have usually already established themselves by specializing in specific areas. This means that consumers are more likely to accept or trust influencers' opinions when those influencers collaborate with brands that correspond well to their personal areas of expertise (Hall 2016). A recent report on social media trends stated that 94% of marketers who have used influencer marketing campaigns found them effective (Ahmad 2018). The same article also mentioned that influencer marketing yielded 11 times the return on investment (ROI) of traditional advertising.

A social media influencer is first and foremost a content generator: one who has a status of expertise in a specific area, who has cultivated a sizable number of captive followers- who are of marketing value to brands-by regularly producing valuable content via social media.

Traditional celebrities can also develop some influencer status, but only after they have become regular content creators. In line with the perspective of industry insights, this study focuses on bottom-up grassroots social media influencers who have gained fame as content generators. Previous researchers have investigated factors that contributed to the effectiveness of influencer marketing across various contexts (e.g., Colliander and Dahlén 2011; De Veirman, Cauberghe, and Hudders 2017; Djafarova and Rushworth 2017; Johansen and Guldvik 2017; Lu, Chang, and Chang 2014; Woods 2016). They suggested that some of the key factors were the parasocial relationship between consumers and influencers, influencer credibility, and trust in the influencer, among others. In particular, De Veirman, Cauberghe, and Hudders ( 2017) examined the impact of Instagram influencers' number of followers and product divergence on brand attitudes. They concluded that the number of followers, influencers' "followers/followees ratio," and product type (i.e., divergent level) should all be taken into account when developing an influencer marketing strategy. Djafarova and Rushworth ( 2017) conducted in-depth interviews with young female Instagram users to investigate the effects of celebrities and influencers on purchase decisions. They argued that influencers were more influential, credible, and relatable than traditional celebrities among young females. Conversely, Johansen and Guldvik ( 2017) conducted an online experiment where they compared participants' reactions to influencer-created marketing ads with regular ads. They claimed that influencer marketing was not more efficient than traditional methods, as it did not directly influence purchasing intentions.

Previous literature has not only elicited mixed findings concerning the effects of influencer marketing but also reveals a lack of basic understanding of the mechanisms by which influencer marketing content and influencers themselves affect consumer behavior. This study intends to fill this research gap. The following sections review the literature on constructs in the model and then develop hypotheses.

Factors in SMIV Model

Perceived Trust

Numerous disciplines, including communication, marketing, politics, sociology, and psychology, among others, have examined trust, as a broad and elusive term (Cowles 1997; Fisher, Till, and Stanley 2010). As it concerns marketing and exchange, Moorman, Deshpandé, and Zaltman ( 1993) described trust as "a willingness to rely on an exchange partner in whom one has confidence" (p. 82). Racherla, Mandviwalla, and Connolly ( 2012) investigated consumers' trust in online product reviews and argued that message argument quality (a content element) and perceived background similarity (reflecting a social element) contributed to increased trust. Likewise, Lee and Chung ( 2009) sought to untangle how the various quality factors associated with mobile banking could impact satisfaction and trust. Their results showed that both system and information quality significantly predicted consumers' trust and satisfaction.

As concerns influencer marketing, and based on these findings, we argue that influencer marketing's content factors-in other words, the perceived informativeness value and entertainment value of influencer-generated posts-will affect consumers' trust in their advertised content: branded posts. Therefore, we hypothesize:

H1: Influencer-generated content's (a) informativeness value and (b) entertainment value will positively influence followers' perceived trust in influencers' branded content.

As concerns information processing (e.g., Chaiken 1987; Petty and Cacioppo 1986), individuals follow two routes to process information: systematic processing and/or heuristic processing. A source's credibility can affect persuasion either by serving as a peripheral cue when elaboration likelihood is low or by biasing argument processing when elaboration likelihood is high (Chaiken and Maheswaran 1994). A large body of literature has already demonstrated the effects of source credibility on persuasion (for a review, see Pornpitakpan 2004). In the context of social media, several studies have tested the impact of source credibility on consumers and demonstrated its persuasiveness across different scenarios (e.g., Djafarova and Rushworth 2017; López and Sicilia 2014; McLaughlin 2016). In particular, Djafarova and Rushworth ( 2017) used the results of their in-depth interviews to argue that Instagram users' trust in celebrities' product reviews was shaped by the celebrities' expertise and knowledge relating to those products, as well as the celebrities' relevance to users. In this study, we aim to test such relationships empirically; therefore, we propose four dimensions of influencer credibility (Munnukka, Uusitalo, and Toivonen 2016) that will affect followers' trust in influencers' branded posts:

H2: Influencers' credibility components (a) expertise, (b) trustworthiness, (c) attractiveness, and (d) similarity will positively influence followers' trust in influencers' branded content.

Covariates

Many previous studies have examined the role that involvement, reflecting individual difference, has played in consumers' decision making and in advertising effectiveness (e.g., Kinard and Capella 2006; Salmon 1986). To examine this more effectively, this study conceptualizes and operationalizes involvement as social media users' involvement in following influencers' posts or updates. For this reason, we included individuals' involvement in influencer following as a covariate in our model testing. Moreover, demographic factors that are crucial variables for classifying social media users, such as age and gender, are also included as potential covariates. The integrated model is presented in Figure 1.

Method

Sample

We recruited qualified participants residing in the United States from Amazon's Mechanic Turk (MTurk) and administered an online survey embedded on Qualtrics. Prior research has shown that MTurk participants in the United States fall into Internet users' age range (Ross et al. 2010); those also represent this study's intended population: social media users. Moreover, Kees and colleagues ( 2017) demonstrated that MTurk's data quality outperformed that of two professional panels (Qualtrics and Lightspeed) across various indicators, and that MTurk's data quality was on a par with that of student samples.

After deleting the participants who failed the attention-check questions, we were left with 538 participants for data analysis. The participants had an average age of 33 years old ( SD  = 9.80), and 62% were female. The majority of them were White (76%), followed by 11.2% African American and 10.2% Asians. Nearly half of the participants had bachelor's degrees (47.2%) and roughly one-third of them were high school graduates (32.9%).

Nearly 94% of the participants in the current study had Facebook accounts, and 85% of them had YouTube accounts; in addition, 70% of them also had accounts on Instagram. Over half of them had followed influencers on YouTube (53%), followed by 49% who had done so on Facebook and 35% on Instagram. As concerns the categories of followed influencers, around 60% of participants had followed influencers in the lifestyle category, followed by 44% who had followed influencers in the food category, with a further 35% following influencers specializing in fashion.

Procedure

First, the interested participants answered four screening questions, with two of those questions asking about their social media use and influencer following habits. We included a brief definition of social media influencers to help participants understand the task. Participants who were regular social media users (using at least one SNS) and who had followed at least one influencer were directed to fill in the rest of survey questions. We filtered out unqualified participants and denied access to further participation. We paid all of the participants who answered the four screening questions $0.10, and the qualified participants who completed the full survey earned an additional $1.19.

We offered a more detailed definition of social media influencers before the qualified participants began answering the questions (definition provided in the appendix). Questions asked about their personal experiences and habits relative to social media use, their personal thoughts about the social media influencers whom they had followed, and their demographic information. The survey took around 15 minutes to complete. Finally, participants were debriefed and thanked.

Measurement

The survey captured influencer-generated content's informativeness and entertainment value by measuring the participants' responses to a statement: "Concerning the influencers whom I am following on social media, I personally think their social media posts/updates are ..." Their responses were anchored by five 7-point semantic differential scales (Voss, Spangenberg, and Grohmann 2003): Ineffective/Effective; Unhelpful/Helpful; Not functional/Functional; Unnecessary/Necessary; and Impractical/Practical for informativeness value and Not fun/Fun; Dull/Exciting; Not delightful/Delightful; Not thrilling/Thrilling; and Unenjoyable/Enjoyable for entertainment value. This study measured the four dimensions of an influencer's credibility with items extracted from Munnukka, Uusitalo, and Toivonen ( 2016).

We measured trust in influencer-generated branded posts using twelve 7-point semantic differential scales anchored by Dishonest/Honest, Phony/Genuine, Unethical/Ethical, and so on (Wu and Lin 2017). We captured brand awareness by measuring the participants' agreement with five statements from Yoo, Donthu, and Lee ( 2000). We measured the participants' purchase intentions by using the participants' agreement with four statements extracted from Yuan and Jang ( 2008). In addition, we measured the participants' involvement level in social media influencer following by asking them to indicate their agreement to five statements, such as "Following their posts/updates on social media is a significant part of my life" (Choo et al. 2014).

Data Analysis

The study adopted a partial least squares (PLS) path modeling approach to estimate the relationships hypothesized in the current model. There are two approaches to specify or test hypothesized relationships in path analysis (J. Hair et al. 2010): covariance-based structural equation modeling (CB-SEM) and PLS-SEM. CB-SEM uses a maximum likelihood estimation (MLE) procedure to estimate model coefficients "so that the discrepancy between the estimated and sample covariance matrices is minimized" (Hair et al. 2014, p. 27). CB-SEM is more suitable for confirming or rejecting a developed theory. Conversely, PLS-SEM estimates model parameters in a way that maximizes the variance explained in endogenous variables and is preferred for research aimed at theory development and prediction (Hair et al. 2014, p. 14).

PLS path modeling is also recommended over CB-SEM for testing complex models with many latent variables (Henseler, Ringle, and Sinkovics 2009). Compared to the average number of 4.4 latent variables in a CB-SEM (Shah and Goldstein 2006), the proposed model in our study has 10 latent variables. In addition, the objective of this study is to examine the effects of influencer marketing's message features and influencer credibility components on consumer behaviors, which concerns exploring a potentially new theoretical framework rather than confirming or testing established theories. For these reasons, a PLS path modeling approach is more suitable for data analysis in the present study. According to a rough guideline on the minimum sample size required for PLS path modeling, the sample size should be at least 10 times the greatest number of structural paths predicting a specific construct-or 90 for the current study. Even though PLS-SEM works efficiently with a small sample size, previous studies have demonstrated that it is also feasible to use PLS-SEM with a relatively large sample size ( N = 851) (Anderson and Swaminathan 2011).

Results

Measurement Validation

The study used SmartPLS 3 (Ringle, Wende, and Becker 2014) to perform both measurement validation and structural modeling. The latent variables in the current model all have reflective measurements: indicators which predict one particular construct and which are highly correlated to one another and represent the effects of the latent construct (Hair et al. 2014, p. 43). The results of our reliability analyses showed that Cronbach's alpha and composite reliability values were above .70 for all of the latent constructs, indicating reliable measurement instrument for this study ( Table 1). All items' loadings on their measured construct were much higher than the cross-loadings on other constructs, and all of the latent constructs' average variance extracted (AVE) values were above .50. The square root of each construct's AVE was larger than its correlation to other latent variables ( Table 2). Thus, all the construct measurements were considered to have adequate convergent and discriminant validities. A collinearity assessment showed no significant levels of collinearity between any sets of predicting variables (with variance inflation factor [VIF] falling between tolerance range .20 and 5.0) (Hair et al. 2014).

12 February 2019

12 February 2019

PLS Path Modeling and Hypotheses Testing

First, we ran a PLS-SEM algorithm to estimate the model's path coefficients. Then we performed a second bootstrapping analysis, specifying 5,000 subsamples and a 95% significance level, to obtain each path coefficient's standard error and p value (Henseler, Ringle, and Sinkovics 2009) ( Table 3).

12 February 2019

Hypotheses 1a, 1b, 2a, 2b, 2c, and 2d posit that the informative and entertainment value of influencer-generated posts, along with influencers' credibility components (expertise, trustworthiness, attractiveness, and similarity), positively affect followers' trust in influencer-generated branded posts. Our results showed that influencer posts' informative value (β = .19, SE = .06, t = 3.37, p < .01), influencers' trustworthiness (β = .19, SE = .06, t = 3.09, p < .01), influencers' attractiveness (β = .11, SE = .04, t = 2.55, p < .05), and similarity (β = .10, SE = .05, t = 1.98, p < .05) all positively affected followers' trust in influencers' branded content. They explain 39% of variance in followers' trust of influencer-generated branded posts ( R ² = .39, adjusted R ²  = .38). Therefore, hypotheses 1a, 2b, 2c, and 2d were supported. Hypotheses 1b and 2a were not supported.

Hypothesis 3 hypothesizes that influencer-generated posts' informative value and entertainment value positively affect brand awareness. Our results demonstrated that informative value (β = −.04, n.s.) and entertainment value (β = .11, n.s.) did not significantly affect brand awareness. Hypothesis 3 was not supported. Research question 1 asked about influencer credibility's effect on brand awareness. Our results showed that, with the exception of influencer similarity (β = .00, n.s.), influencers' expertise (β = .21, SE = .06, t = 3.46, p < .01), trustworthiness (β = −.17, SE = .07, t = 2.58, p < .05), and attractiveness (β = .25, SE = .04, t = 5.72, p  < .001) significantly affected brand awareness.

Hypotheses 4a, 4b, 5a, 5b, 5c, and 5d posit that influencer content value and influencer credibility positively affect purchase intentions. In support of hypotheses 4a and 5b, results displayed that influencers' posts' informative value (β = .12, SE = .05, t = 2.61, p < .01) and trustworthiness (β = −.14, SE = .06, t = 2.63, p  < .01) positively influenced purchase intentions. Hypotheses 4b, 5a, 5c, and 5d were not supported.

Finally, research question 2 asked whether followers' trust in influencer-generated branded posts positively affects brand awareness and purchase intentions. Our results showed that trust in branded posts significantly influenced brand awareness (β = .22, SE = .05, t = 4.02, p < .001) and purchase intentions (β = .41, SE = .05, t = 8.91, p < .001). In addition, involvement level was shown to be a significant covariate that positively affected participants' trust in influencer-generated branded posts (β = .16, SE = .05, t = 3.45, p < .01), brand awareness (β = .17, SE = .05, t = 3.36, p < .01), and purchase intentions (β = .16, SE = .05, t = 3.37, p < .01). Neither age nor gender was significant in affecting consumer reactions ( Figure 2). Significant paths in the tested model explained 32% of variance in followers' brand awareness ( R ² = .32, adjusted R ² = .31), and 62% of variance in purchase intentions ( R ² = .62, adjusted R ²  = .61).

Discussion

Interest in social media influencer marketing has been growing at an increasing rate. This study is the first to explicate the underlying mechanism and constructs that explain its effects on consumers and to propose an integrated model. By examining influencer marketing from a holistic perspective, this study has extended the application of the advertising value model and considered the role of source credibility. Furthermore, the proposed model hypothesized and investigated the role of consumers' trust in the effectiveness of influencer marketing. The findings of this study suggest that influencer-generated posts' informative value, and some components of influencer credibility, can positively affect followers' trust in influencer-generated branded posts, which in turn affects brand awareness and purchase intentions. Our findings add to the literature on advertising value and influencer marketing and have theoretical implications for researchers who wish to examine influencer marketing in social media. The findings also inform brands and consumers of effective influencer marketing practices and knowledge.

One major finding concerns the role of advertising message factors, or advertising value per se, in influencing marketing outcomes and the relationship between influencer content value and consumers' trust in branded content. This adds to the literature on advertising value models in relation to social media marketing, which also advances our knowledge of interactive advertising research (Daugherty et al. 2017). Our results demonstrate that influencer content's informative value generally positively affects their followers' trust in influencer-branded posts, as well as their followers' purchase intentions. This finding is only partly consistent with the claims of a recent study (Dao et al. 2014) in which researchers examined the antecedents of social media advertising's value in Southeast Asia. They demonstrated that three types of social media advertising value-informativeness, entertainment, and credibility-all positively influenced consumers' perceived value of advertising, which subsequently affected their purchase intentions. Because influencers constantly generate and disseminate informative social media updates to attract attention from followers, it is not surprising to learn that influencers' content's informative value significantly influences their followers' purchase intentions. Our results also suggest that influencers' informative posts may contribute to their followers' trust in their branded content and subsequently may affect purchase intents. However, influencers' posts' entertainment value did not play a role in affecting their followers' trust in their branded posts or purchase intentions. This may imply that, largely, social media users view influencers as quality-information providers and cultivate their trust or purchase considerations based on the influencer content's informative value rather than its entertainment function.

A second major finding of this study relates to the effects of source credibility (or influencer credibility) on followers' trust and brand awareness, which is in line with the findings of previous research (Djafarova and Rushworth 2017). Our findings showed that influencers' trustworthiness, attractiveness, and perceived similarity (to their followers) positively influenced their followers' trust in their branded posts. Since influencers usually cultivate credible and appealing online personas, it is not surprising to observe that influencers' perceived trustworthiness and attractiveness can affect their followers' trust in their sponsored content. Moreover, followers tend to follow influencers with whom they identify, and thus followers' perceived similarity to influencers positively affects their trust in influencer-generated branded posts. Surprisingly, influencer expertise did not influence followers' trust in branded content. This may be because influencers, by default, have a status of expertise among their followers, yet such expertise does not necessarily promise followers' trust in their sponsored content.

Besides extending the framework of the advertising value model and explaining the role of source credibility on consumer behaviors, a third major finding of this study comes from our revisiting of the trust construct in an influencer context, and particularly trust in influencer-generated branded posts. Our findings provide empirical evidence to support the belief that trust in sponsored ads positively affects brand awareness and a "willingness to act on ad-conveyed information" (Soh, Reid, and King 2009, p. 86). A finding such as this particularly adds to the body of literature about trust's effect on consumer behavior (Fisher, Till, and Stanley, 2010; Lewis and Weigert 1985). It is noteworthy that followers' trust in influencers' branded posts demonstrated the strongest effect on purchase intentions, when compared with content- and source-related factors.

Finally, this study also examined the role that a critical personal factor, involvement, plays in the persuasion process. Our results agree with earlier studies' propositions on consumer involvement (e.g., Kinard and Capella 2006; Salmon 1986) and highlight the importance of investigating or controlling for individual differences when examining recent marketing practices and advertising effects.

Theoretical and Managerial Implications

This study is the first to investigate the underlying mechanism of how influencer marketing communication affects consumers via social media. It is also the first to provide a comprehensive theoretical model that has empirical support. The proposed SMIV model extends the framework of advertising value by accounting for the roles of source credibility and consumer trust; both of these factors are indispensable to the effectiveness of influencer marketing. This study confirms that it is important to examine multiple communication components-including message features and source features-when explicating the dynamic persuasion processes of innovative marketing practices. This study fills the gap between the ever-changing practices of innovative marketing and the paucity of existing research and adds to the repertoire on the effects of social media advertising. This study also serves as a starting point for future empirical research in influencer marketing.

The current study also provides some useful recommendations for marketers and brands that are interested in influencer marketing. For example, because social media users' trust in influencer-branded content plays a significant role in brand awareness and purchase intentions, brands might place more importance on selecting influencers whose content is well trusted among their followers. Specifically, brands can estimate such trust by evaluating followers' perceptions of influencers' trustworthiness, attractiveness, and/or similarity. Instead of relying on data that describe influencers' numbers of followers and engagement metrics, such knowledge could help brands implement potentially more effective influencer marketing campaigns. Moreover, brands that aim to expand brand awareness among a large target audience may look for social media influencers who demonstrate an attractive presentation and explicit expertise status that align with the brands' business offerings. Finally, social media influencers are content creators. Brands should always make sure that influencers create informative content as part of their collaborations.

This study also conveys some meaningful recommendations to influencers. Besides upholding their status of expertise, they can opt for creating informative posts and signaling attractiveness and similarity to their followers, which can positively shape their followers' trust in their branded posts.

Limitations

This current study is not without its limitations. First, while we believe that the factors we identified in this study helped us to better understand the mechanism underlying effective influencer marketing, we recognize that other relevant factors could affect the process and were not included in our research, for example, advertising literacy and followers' persuasion knowledge. Second, this study asked about social media influencers and trust in influencer-generated branded posts in general. It is conceivable that social media users may hold different beliefs/attitudes about influencers or influencer-generated branded posts on different social media platforms because of message modality or influencers' content variations across different platforms. Future studies could examine influencer marketing on specific SNSs. Third, the unexpected findings of the present study (i.e., influencers' trustworthiness's negative effects on brand awareness and purchase intentions) require further research. In addition, although we provided participants with detailed information about the phenomenon of influencers and influencer marketing on social media, future studies may also want to control whether participants actually understand the concept of social media influencer. Moreover, this study used a U.S. sample for model testing. It would be worth exploring the role of cultural factors in social media following in the future. In addition to the message and source factors examined in this study, future research might also investigate other factors that relate to media channel (e.g., affordance, usefulness) or receivers (e.g., motivations, personality). Finally, future research can use other methods, such as experimental designs, to study causal relationships among specified variables.

Conclusion

This study proposed a theoretical model to understand the effects of influencer marketing, which incorporates the value of influencer content and source credibility into model testing and lays the groundwork for a more comprehensive model. Despite the wide acclaim that it has received from the industry, influencer marketing is yet to evolve. There will be more questions to be examined regarding the effects of influencer marketing in light of the ever-changing interactive advertising landscape, such as the recent popularity of vertical video (e.g., Instagram's IGTV) and experiential advertising. Future research may not only investigate the roles of interactive platforms' affordances and consumers' individual differences in influencer marketing but also identify critical boundary conditions or mechanisms of its effects on brand building and consumer behaviors.

Appendix: Definition of Social Media Influencers in the Survey

Social media influencers are digital personalities who have amassed large numbers of followers across one or several social media platforms (e.g., YouTube, Instagram, Vine, Snapchat, or personal blogs) and carry influence over others. Compared with traditional celebrities, influencers are "regular people" who become online "celebrities" by creating contents on social media, e.g., makeup YouTuber Michelle Phan, gaming YouTuber PewDiePie, Instagram star Loki the Wolfdog, Chef Jacques La Merde on Instagram, among other influencers in areas like healthy living, travel, food, lifestyle, etc.

Constructs

Items

Standardized Loadings

Cronbach's α

CR

AVE

Path Estimates

Standard Error

t Statistics

Entertainment → Brand awareness

0.112

0.057

1.957 †

References

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Additional information

Funding

This study was funded by the 2017 Nanyang Technological University Start-up Grant [grant number M4081983.060].

# data[].attributes.attachment_link.title
Influencer Marketing: How Message Value and Credibility Affect Consumer Trust of Branded Content on Social Media

# data[].attributes.attachment_link.description
Abstract Abstract In the past few years, expenditure on influencer marketing has grown exponentially. The present study involves preliminary research to understand the mechanism by which influencer marketing affects consumers via social media. It proposes an integrated model-the social media influencer value model-to account for the roles of advertising value and source credibility.

# data[].attributes.attachment_link.readable_text
Picture this: You're scrolling through your feed on Instagram and notice what appears to be an endorsed advertisement for a new workout supplement. The post has received hundreds of thousands of likes and dozens of comments.

Bewilderment overcomes you as you try to figure out why the Instagram user looks familiar. But at the same time, you feel intrigued to learn more about the product based on the amount of attention the post has received. And that glowing review, which acts as the photo caption, makes you feel inclined to purchase the supplement.

Don't fret, this isn't a scam. In fact, thousands of companies have been using this relatively new concept. It's simply a modern form of advertising called "influencer marketing," which allows for so-called influencers -- users who have a large following on social media platforms like Facebook ( FB), Instagram, YouTube ( GOOG), Twitter ( TWTR) and Snapchat ( SNAP) -- to partner with brands that are in sync with their lifestyles.

In recent years, traditional celebrity endorsements have taken a back seat to brands' influencer-created content. So stars like Paris Hilton and Kim Kardashian have been replaced by that familiar, yet unfamiliar face that popped up in your feed moments ago.

And as long as Instagram and other platforms continue as go-to places for many shoppers, influencers will keep racking in thousands of dollars as quickly as their posts acquire likes.

What does it mean to be a social media influencer?

Influencers can be fitness gurus, gaming addicts, beauty bloggers, fashionistas, foodies, travel experts, etc. They offer an authentic presence on social media based on their copious numbers of followers and level of engagement. Generally speaking, each influencer maintains an audience of at least 10,000 followers on one platform, if not more.

But it takes more than having an attractive physique and a coveted blue "verified" badge to acquire digital celebrity status.

Influencers use social media platforms to connect with their audience on a personal level. They brand themselves within a specific industry by promoting content that coincides with their values and interests. For example, someone who correlates with fashion would be more inclined to promote a clothing company's T-shirt as opposed to a travel agency's sale on a vacation package to an exotic destination.

Brands hire influencers and pay them to endorse their product(s) or service(s) within photos and videos, which essentially act as word-of-mouth opinions similar to what you might seek from a close friend. Many consumers value the opinions of influencers, which subsequently makes them more inclined to purchase the product that's being advertised.

Last year, Forbes released a comprehensive list of the world's top influencers. The going rate for influencer-created content ranges anywhere from $500 to upwards of $20,000, or more, for each sponsored post.

Does influencer marketing work?

Influencer marketing -- sometimes described as the "Wild West" for its lack of strategic guidance -- has gained a competitive edge in the industry due to its tendency to form viral conversations about brands online. Over the years, companies have developed applications to help brands determine which influencers are best suited for their digital campaigns.

Take Ryan Detert, CEO of Influential. Six years ago, Detert was an influencer himself. But over time, he realized a gold mine was forming in influencer marketing, and he wanted in.

So in 2014, Detert channeled his digital prowess to create a platform that uses machine learning and artificial intelligence (AI), powered by IBM Watson, to match Fortune 1000 brands with social media influencers. That led to the birth of his company.

Essentially, brands are able to send deal flows to influencers and track their campaigns' performance by using Influential's dashboard.

"We have created a multistep process where it's not just influencer marketing. But instead, we're using our technology, our data, to provide the most transparent sites to deliver on a campaign," Detert said. "We're closing the loop. That's the holy grail of marketing. It's not just getting people who can speak word-of-mouth about you, but tracking that can lead to higher increase in sales, better sentiment, overall response that's different than just hoping a TV commercial is watched."

"If we match back the brand's personality to the influencer's personality, we're seeing a 30 percent lift in engagement in overall ROI [return on investment]," he continued. "All of these things allow for you to activate the best social influencer and then track back to see if it had some sort of impact."

According to Detert, three tiers -- micro, macro and mega -- define influencers' bandwith on social media and determines their ability to move the needle on followers' purchasing decisions. He urges advertisers to target the macro tier, which includes influencers who typically maintain 50,000 to 2 million followers.

"You want people who have the highest level of engagement -- meaning likes, retweets, comments and reshares -- versus their total follower count. Celebrities have half a percent of engagement, versus someone who might be a domain expert that has half a million followers," he explained. "They all have a place in the marketplace. But if you want a digital buy, you wouldn't necessarily go with the biggest celebrity, unless you plan on surrounding them with a bunch of other smaller influencers."

Influential also offers a new standard within the industry that helps brands identify influencers by using demographic, contextual and psychographic information.

"What you want to be able to do is really match people properly through these different methodologies and then be able to create content that's in the voice of the influencer, but hits all of the things that the brand cares about. Like which hashtag to use, type of sentiment you want to get across, being able to speak to a mommy blogger versus a Gen Z millennial," Detert said.

Still, the big question remains: Does influencer marketing actually work? Most would agree that it does, because influencers can reach a larger audience than what a traditional ad may target.

"There is no one that I've seen that has said, 'No, it's not for us.' There's too much ROI. There's too much money you can make off of this," Detert said. "It's too integral to the branding, the persona of a brand, to not be on these social platforms and to not integrate or collaborate with a partner that can speak to these audiences."

The future of influencer marketing

As the power of social media continues to grow, it's arguably fair to say influencers will continue to have a stronger impact on consumer brand awareness. In turn, brands will be required to shift their strategies, conforming to this new norm as influencer-follower relationships expand.

Soon it'll be rare to find a brand that doesn't include influencers within its ad budget, according to Detert.

"This is the year of what we believe to be attribution," he said. "Basically meaning that when someone puts out a message natively on these different platforms, through a paid media function, you can actually lead back to that person and see the content from the influencer. You'll actually be able to see if they actually bought the product that's being advertised."

Detert also predicts the industry will "become more and more open" and it will be strongly "based off of native content."

"It's been fun to watch the journey," he concluded. "Six years ago, we received $5,000 budgets, if we were lucky. Now, this is a $5 billion- to $10 billion-a-year business."

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Social media "influencers" add a new twist to advertising

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Picture this: You're scrolling through your feed on Instagram and notice what appears to be an endorsed advertisement for a new workout supplement. The post has received hundreds of thousands of likes and dozens of comments. Bewilderment overcomes you as you try to figure out why the Instagram user looks familiar.