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Effects of explicit sponsorship disclosure on user engagement in social media influencer marketing

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Social media influencer marketing has grown substantially in the last decade and is a major advertising channel for many brands. Social media influencers weave sponsored posts with organic content in their feeds, which raises concerns among regulators and consumer advocates that users may not be able to clearly distinguish between sponsored and organic influencer content. Thus, regulators often mandate the explicit disclosure of sponsored content. However, there is little empirical evidence based on field data about the effects of explicit sponsorship disclosure. Therefore, we empirically investigate the effects of explicitly disclosing sponsorship in influencers’ content on users’ engagement using a large-scale field dataset collected from Facebook and Instagram. Our empirical results suggest that explicit sponsorship disclosure increases user awareness of the advertising nature and earns users’ favorability by enhancing the transparency about the sponsored content. We further design two online experiments to corroborate our empirical results and directly test the underlying mechanisms. Our findings have novel and important implications for marketers, influencers, social media platforms, and regulators in the influencer marketing industry.

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Copyright: © 2024 by the Management Information Systems Research Center (MISRC) of the University of Minnesota Funding: The authors thank Paul Kievits and colleagues from the Research Software Engineering and Consulting team at Rotterdam School of Management, Erasmus University Rotterdam for their support in data acquisition, processing, and storage. The authors also thank the senior editor, associate editor, and three anonymous reviewers for their helpful comments. The authors also thank the participants of the First Digital Economy Workshop in Lisbon (2019) and the participants of the Business Information Management Research Seminar at the Rotterdam School of Management for their helpful suggestions. The first author appreciates the support from the National Natural Science Foundation of China [Grant 72201238, Grant 72192823, Grant 72322010]. The second author acknowledges funding by Fundação para a Ciência e a Tecnologia (UIDB/00124/2020, UIDP/00124/2020 and Social Sciences DataLab-PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016).

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