The engagement of their users is crucial for influencers who want to make a living from influencer marketing. Trustworthiness is therefore the most important currency of influencers, as it affects consumers’ intention to engage with their posts (e.g., like them or comment on them). The labelling of advertising is a tricky area in this context. WiSo researchers have investigated the connections between influencer trustworthiness and advertising disclosure types.
Contrary to traditional forms of advertising, such as TV clips, influencer marketing, as a form of native advertising, has to be disclosed as advertising in order for consumers to recognize it as such. Contrary to traditional forms of advertising, such as TV clips, influencer marketing, as a form of native advertising, has to be disclosed as advertising for consumers to recognize it as such. However, Legal disputes, such as the sensational case involving the influencer Cathy Hummels, show that the question of what must be labelled has not yet been conclusively answered.
A team of current and former WiSo faculty researchers around doctoral student Zeynep Karagür from the Chair in Marketing Science and Analytics has now investigated the effects of disclosing influencer marketing as advertising on the social media platform Instagram. According to their findings, disclosing a post as advertising via the platform-initiated branded content tool has the strongest negative effect on influencer trustworthiness and consequently consumers’ engagement, as this reinforces the perception of advertising and monetary motives. Also, when using the standardised branded content tool, consumers would not have to focus on other clues such as the number of followers or the number of previously recommended products when deciding whether posts are advertising or not.
Nevertheless, Zeynep Karagür and her co-authors Jan-Michael Becker (BI Norwegian Business School), Kristina Klein (University of Bremen) and Alexander Edeling (KU Leuven) still advise influencers to divulge some form of disclosure as it is a double-edged sword and can also have positive effects. On the one hand, influencers and brands also benefit from disclosing posts as advertising, as consumers value transparency, which in turn increases the perception of the influencer's trustworthiness and the engagement intentions. On the other hand, for influencers, the long-term reputational damage of not disclosing advertising intent could be greater than the negative impact of the labelling itself.
The impact of the method chosen to label advertising depends on the number of followers and the number of previously endorsed products. Influencers who have a high number of followers (macro influencers) and a large brand portfolio are seen as less trustworthy because consumers see them as "human ad spaces".
"Large brand portfolios can undermine influencers’ trustworthiness through higher advertising expectation," formulate the authors. In contrast, “the highest level of trustworthiness is associated with micro-influencers with limited brand relationships."
If managers had to choose between two influencers with a similar number of people following them, the number of previous product endorsements is another effective selection criterion. According to the researchers, their results contradict the widespread opinion that “the more sponsors you have, the more credibility you have".