Disclosing influencer partnerships has no impact on consumer attitudes: HBR study

According to a recent tongue-in-cheek (we think) poll from a U.S. software company called Wooly Inc., more people believe in ghosts, aliens and Bigfoot than they do influencers.

That poll probably didn’t include marketers. A 2018 study from the ANA found that 75% of national advertisers have incorporated influencer marketing into their budget, with nearly half (43%) planning to increase their investment.

Like any advertising channel, influencer marketing faces questions about its efficacy. But it also faces unique questions about its legitimacy, with disclosure among the main concerns.

Some experts (and consumer advocates) have argued that people should be made aware that the Instagram or Facebook posts they’re viewing have been paid for. Others have suggested that being forced to identify an influencer could harm or reduce the efficacy of their campaigns.

In 2017, the U.S. Federal Trade Commission published “guides” which recommended that brands disclose the influencer relationship, either by using the hashtag #paid or displaying the words “paid partnership” in a prominent position. In Canada, the Competition Bureau has made it clear that disclosure is essential, and Ad Standards has provided comprehensive guidelines.

But new research from the Harvard Business Review looking at the effects of the FTC recommendations found that disclosure has little effect on consumer decisions. The study said that disclosure led to a “small, though significant difference” in attitudes towards brands in the immediate aftermath of the FTC’s recommendation, but that no longer appears to be the case.

“The likelihood of viewing a brand positively following an influencer’s recommendation was roughly the same whether or not a relationship between the brand and the influencer had been disclosed,” write authors Alice Audrezet and Karine Charry in their article, “Do influencers need to tell audiences they’re getting paid?”

The research found that while consumers did view brands with more skepticism when the influencer relationship was initially disclosed in 2017, that gap shrunk over time—to the point where it was no longer statistically significant by the next year.

Among the study’s most notable findings is that disclosure had no discernible impact on consumers’ purchase decision. “We also find that influencers’ recommendations have become steadily more important in the purchase decision from 2015 to 2018, and the 2017 growth in disclosures has made no difference to that rise,” said the report.

The research notes that disclosure might have even “reinforced” the importance of influencers. It found that 88% of consumers believe that influencers are being paid to recommend brands, “implying that people simply assume that influencers are brand-sponsored whether or not there is any disclosure. In this context, disclosure becomes a positive signal: savvy consumers value the perceived transparency and authenticity of influencers who volunteer a disclose.”

The HBR authors also address the growing trend of up-and-coming Instagram stars faking sponsored content in an effort to secure “street cred” and possibly secure brand partnerships. “A decade ago, shilling products to your fans may have been seen as selling out,” wrote Taylor Lorenz in The Atlantic last year. “Now it’s a sign of success.”

While there is a contingent of marketing professionals who insist that influencer marketing is dying, the numbers tell a different story. Approximately 92% of marketers believe in its effectiveness, with overall investment in the space in the U.S. expected to reach US$10 billion by 2020.

Meanwhile, a study of more than 1,800 Americans by CivicScience earlier this year found that nearly one-fifth (19%) have purchased a product because it was endorsed by an influencer, compared with just 10% who said they made a purchase because of a celebrity endorsement.

And a study by e-Marketer revealed marketers worldwide are investing an average of 10% of their marketing budget in influencer, with spending increasing as reliance on the practice increases.

Chris Powell