Disclosing influencer marketing as advertising is a double-edged sword – report

We’ve all heard stories of influencers ignoring the rules and failing to disclose that they are being paid to say good things about products on their feeds. Only last week, the ASA sanctioned six influencers for exactly this.

But now, a study conducted by doctoral candidate Zeynep Karagu?r of the University of Cologne and her co-authors Jan-Michael Becker (BI Norwegian Business School), Kristina Klein (University of Bremen) and Alexander Edeling (KU Leuven), has found that disclosing influencer marketing as advertising is a double-edged sword.

The study investigated the effects of disclosing influencer marketing as advertising on Instagram. They found that disclosing that a post is advertising has a negative effect on the influencer’s trustworthiness, because it increases the perception of advertising and monetary motivations.

However, influencers and brands also benefit from disclosing posts as advertising as consumers appreciate the transparency. Thus, the authors advise influencers to divulge some form of disclosure, as the long-term reputation loss from being caught not disclosing might even be worse.

Among the disclosure types investigated, Instagram’s stardardized branded content tool is the most effective way to increase consumers’ recognition of advertising. Using the stardardized branded content tool also makes it dispensable for consumers to rely on other cues such as the number of followers or the number of previously endorsed brands when deciding whether posts are advertising or not.

The study also found that macro influencers – those with a high number of followers – and a large brand portfolio are seen as less trustworthy because consumers might see them as “human ad spaces”.

The researchers say that their findings contradict the common thought that “the more sponsors you have, the more credibility you have”.

“Large brand portfolios undermine influencers’ trustworthiness through higher advertising expectation,” said Karagu?r. “The underlying assumption is that influencers will post as many advertising as they can to increase their earnings, rather than endorse products they genuinely like.”

According to the researchers the “highest level of trustworthiness is associated with micro influencers with limited brand relationships”. If managers are deciding between two influencers with a similar number of followers, looking at the number of previous product endorsements is another effective selection criterion.

The research paper was published in the International Journal of Research in Marketing.