A study on the effectiveness of the disclosure versus non-disclosure of sponsored content posted by influencers on social media on users’ purchase intention and attitude towards the source of the message

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Graduate School of Communication Persuasive Communication

Master Thesis

A study on the effectiveness of the disclosure versus non-disclosure of sponsored content posted by influencers on social media on users’ purchase intention and attitude towards

the source of the message

Author: Daria Tkalina Student ID: 11352493

Supervisor: Barbara Schouten Date: 26-06-2020

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1 Abstract

Since users become more active and involved with social media, companies often make use of influencer marketing to target a certain audience interactively and increase purchase intention. Influencers get paid for sharing promotional posts on their Instagram profiles. Influencer marketing is highly persuasive and effective; therefore, several laws and regulations were introduced to control the sponsored posts on Instagram and force brands and influencers to disclose the nature of this content using the "sponsored" label, which protects users from implicit persuasion. However, the previous results regarding the effects of the sponsorship disclosure on purchase intention and attitude towards the source of the message were contradicting. Moreover, Instagram involvement was not taken into consideration when examining the effect of sponsorship disclosure on attitude towards the influencer. After conducting the experiment (N = 130), it was found that disclosure of sponsorship did not have any significant effects on purchase intention and attitude towards the source of the message. It was also found that Instagram involvement was a moderator of the relationship between disclosure of sponsorship and attitude towards the source so that when the user with higher Instagram involvement was exposed to the post with sponsorship disclosure, he/she had a more negative attitude towards the influence who made this post. Therefore, this research is important for brands and influencers as it showed that they should openly disclosure the sponsorship according to laws and regulations as users are indifferent to this disclosure. However, influencers should focus on users with lower Instagram involvement when posting the sponsored content. Also, there are several limitations of the research, such as sampling method, familiarity with the product used, and social desirability bias. Therefore, the study should be replicated and include the variable which measures the familiarity with the product. And the topic of sponsorship disclosure should be studied further.

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2 Introduction

Nowadays, digital media play an important role in people’s life. Initially, digital media were created to complete and potentially replace the printed media to inform users about news and provide people with an online space of communication (Rajendran & Thesinghraja, 2014). With time people gained higher digital literacy and became “active” users of online space, including different social media (Raudeliūnienė, Davidavičienė, Tvaronavičienė, & Jonuška, 2018).

Social media allow remote interactions between users, unique social representation, content creation, and information gaining (Hamilton, Kaltcheva, & Rohm, 2016). Consequently, social media were quickly integrated into the business world as a space for effective marketing.

Not only companies saw opportunities on social media, but also the users of this online space as it was a chance to get famous among users and earn money using their profiles. The most active and involved users started to put effort into improving their accounts, building

networks, getting more followers, and becoming famous influencers on social media

(Veirman, Cauberghe, & Hudders, 2017). Companies started to build connections with them and use their profiles to increase attention around their brand, promote products, and get a profit. This concept is called influencer marketing (Campbell & Farrell, 2020).

Although influencer marketing was found effective, it is important to protect consumers from implicit persuasion. Therefore, the companies that are making use of influencer marketing are forced by laws and regulations to inform people about the commercial nature of posts on social media (Boerman, Willemsen, & van der Aa, 2017). In this study, the social media of interest is Instagram, a comparably new social media platform released in 2010 which is a content sharing service and has more than a billion active online users (Ting, Ming, de Run,

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3 & Choo, 2015). The creators of Instagram created a new feature for sponsored content which represented as the sign “sponsored” on the top of the post. One could argue that sponsorship disclosure on Instagram is an essential component of fair social media promotion as it allows the user to become aware of the persuasiveness and purposes of these messages, form his/her own opinions about posts and products.

Unlike other social media platforms, Instagram has its unique features, such as direct messaging (a two-way communication) which makes users more engaged with brands and influencers (Hwang & Jeong, 2016; Uzunoglu & Kip, 2014). Thus, the previous results

regarding sponsorship disclosure on other platforms cannot be generalized to Instagram. If the Instagram paid post is presented as a recommendation to use particular products rather than their promotion, then some followers would buy these products basing themselves on the honest opinions of influencers. But if users see this post as a traditional advertisement, they could make use of selective avoidance and ignore the post, so the difference in previous studies can be described to how the post is perceived by the consumer (Zhu, Skoric, & Shen, 2017). Therefore, disclosure of sponsorship can influence purchase intention, but previous results show contradictory effects.

Also, disclosure of sponsorship is an explicit signal that the influencer is paid to post certain content, which can affect attitude towards the source of the message, the influencer. Instagram followers build a stable audience for the influencer and provide his/her profile attention (Tufekci, 2013). Influencers use this attention to attract brands and sell it to their audience; therefore, their posts are becoming more and more commercial as they are making a profit by promoting products using their profiles. When influencers share promotion posts with

sponsorship disclosure, users can become less involved and engaged with them, and even feel antipathy and experience frustration, which negatively affects attitude towards the influencer (van Reijmersdal et al., 2016). At the same time, users could respect the transparency of

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4 influencers which inform them about paid sponsorships, which improves attitude towards the source of the message (Ikonen, Luoma-aho, & Bowen, 2017). Similar to intention, previous research thus shows contradictory outcomes.

The conflicting findings can occur because researchers who investigated this topic made use of various contexts, social media platforms, and timing. Also, there was no consistency in stimuli materials as several researchers used posts of existing influencers and others used non-existing ones; therefore, there could be an effect of pre-non-existing knowledge. More

importantly, due to the novelty of the topic researchers did not take into consideration

Instagram involvement, which is an important variable that could affect the relationships as it resembles Instagram literacy of the user. Assuming that people with higher Instagram

involvement are more aware of the features of this platform and concerned about the sponsored posts, Instagram involvement might moderate the relationship so that when the user with higher Instagram involvement is exposed to the Instagram post with sponsorship disclosure, his attitude towards the source of the message is higher.

To close this knowledge gap of the effects of disclosure of sponsorship on purchase intention and attitude towards the source of the message and explain previous contradictory results by taking into account the moderating role of Instagram involvement, the following research question was formulated: "To what extent does the disclosure versus non-disclosure of sponsored content posted by influencers on social media influence users’ purchase intention and attitude towards the source of the message, and does level of Instagram involvement moderate this relation?".

This research question helps to test the direction of the effects of sponsorship disclosure on these outcome variables and the influence of the moderator Instagram involvement, which allows more knowledge regarding the usage of (non-) disclosure of sponsorship on Instagram by influencers and companies. By conducting an experiment including involvement that could

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5 have an effect on purchase intention and attitude towards the source of the message, precise measurements, and high-quality materials for manipulation, more insight can be gained into previous contradicting findings.

The academic relevance of this research is further based on the fact that scientists could get more insights, draw conclusions regarding Instagram sponsorship disclosure, and connect this phenomenon to existing theories and concepts of communication science. Also, there is a limited number of studies on the effect of Instagram involvement. This study will provide more insights into the relationships between disclosure of sponsorship on purchase intention and attitude towards the source of the message so that researchers can create a new concept. Moreover, the results of the study can be relevant to other social platforms that offer similar features as well.

Besides, the results of this study are useful for companies and brands around the world because they will get more information about purchase intention of users and plan their campaigns and communication strategies using influencers' profiles and content with

sponsorship in the most effective way based on the results of the study. Also, they can use the information about the effect of Instagram involvement and, as a result, focus more on users with lower or higher involvement and save time and money.

This study is also important for consumers. Nowadays, people are exposed to many

advertisements and persuaded by different techniques and methods. This research is going to provide insights on how these persuasive methods affect the user's purchase intention and attitude towards the source of the message. Thus, consumers can be informed about the effects of persuasive techniques used by brands and influencers which might help them resist these effects.

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6 Definitions

In this part of the research paper the variables, relevant theories, and research will be discussed. To begin with, several concepts are going to be defined to get a better understanding of the topic.

Influencer marketing is a social media promoting strategy which is based on two-ways online interaction with consumers and defined as using opinion leaders, such as influencers, in a specific social media audience, and encourage them to engage with consumers, promote products, and increase word of mouth around the brand/company (Uzunoğlu & Kip, 2014). An influencer is defined as an active user with many followers and high attention among people (Evans, Phua, Lim, & Jun, 2017; Freberg, Graham, McGaughey, & Freberg, 2011). Instagram user is defined as an individual who has an active account on Instagram and benefits from the exploitation of this platform, for example by communication with others, sharing content, commenting (Brandtzæg, 2010; Miller, 2017; Wok, Idid, Misman, & Rahim, 2012).

• "Purchase intention" is the dependent variable and defined as the probability or

likelihood that the person is going to consider purchasing a product that is advertised in the post (Lim, Radzol, Cheah, & Wong, 2017). It can be seen as a predictable intention to buy the product promoted (Sokolova & Kefi, 2020). Marketing professionals are aiming to increase purchase intention as it is a fundamental component to increase the buying behavior of users. As a result, it will increase the profit of the company.

• "Attitude towards the source of the message" is the second dependent variable which is defined as the affective reaction of users to the source of the message, such as a post on

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7 social media (Hwang & Jeong, 2016; Lim, Radzol, Cheah, & Wong, 2017). In this case, the source of the message is the influencer.

• "Disclosure of sponsored content" is the independent variable which is referring to the concept of brand transparency and defined as the feature to inform users who are exposed to certain paid Instagram content regarding the commercial nature of the post (van

Reijmersdal et al., 2016). On Instagram this feature is represented as the label

“sponsored” on the top of the post. Sponsorship disclosure provides users the sense of freedom to be informed about financial and commercial ties between influencers and brands, form their own opinions and choose to purchase promoted products or not (Hwang & Jeong, 2016).

• "Instagram involvement" is the moderator and defined as habitual use of Instagram, actively participating in online activities, such as posting, providing the feedback, and engaging with the features of the platform (Tiggemann, Hayden, Brown, & Veldhuis, 2018; Ting, Ming, de Run, & Choo, 2015).

Disclosure of sponsored content and purchase intention

Several theories can explain how correctly reported sponsorship disclosure can positively influence purchase intention. The theory of transparency suggests that people appreciate the openness and honesty of the source of the message regarding the nature of the post, which improves attitude towards him/her, and as a result, people trust the source and feel a need of reciprocity towards this person, which increases purchase intention (Boerman, 2020;

Campbell & Evans, 2018; Woodroof, Howie, Syrdal, & Van Meter, 2020). The social proof theory also explains how sponsorship disclosure can positively affect purchase intention. This theory suggests that people act in the way the masses do and take the perspective of the majority (Schnuerch, Richter, Koppehele‐Gossel, & Gibbons, 2016). Since influencers are

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8 forced to disclose the sponsorship by laws and have many followers who like posts with sponsorship disclosure and comment on them, this indicates that the masses approve this disclosure. Thus, users who are exposed to the disclosure of sponsorship are likely to analyze online behaviors of others and act accordingly. For example, users will have higher purchase intention in case other followers are actively liking and commenting on posts with

sponsorship disclosure.

However, several other researchers found a negative effect of disclosure of sponsorship on purchase intention (Dhanesh & Duthler, 2019; Liljander, Gummerus, & Söderlund, 2015; van Reijmersdal et al., 2016). They assumed that this result can be explained using the Persuasion Knowledge Model (PKM), which suggests that people defend themselves and avoid interaction with the content which seems to be persuasive (Friestad & Wright, 1994). This occurs not only because nowadays people have higher persuasive knowledge, but also because there are several laws and regulations which force companies to notify consumers regarding the paid content. Therefore, users are explicitly informed that they are exposed to a persuasive message. As a result, they use selective avoidance, which can be explained as people's intention to move their attention away from the stimulus (Zhu, Skoric, & Shen, 2017).

Last, some researchers have not found any effects of sponsorship disclosure on purchase intention. Evans, Phua, Lim, and Jun (2017) and Stubb and Colliander (2019) found the non-significant effect of sponsorship disclosure on purchase intention and explained this result by the fact that disclosure of sponsorship is controlled by laws and regulations and users are aware of this necessity and are not bothered by this disclosure. Therefore, they concluded that disclosure of sponsorship does not affect consumer's intention to purchase a certain good. However, these researchers did not make use of the Instagram feature, such as the

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9 hashtag for sponsored content, which is usually ignored by Instagram users (Sohini, 2017). This could have made the relationship between disclosure of sponsorship and purchase intention insignificant.

Since people have become more active online and are more aware of persuasive techniques used by companies and influencers, this has made them more skeptical and more likely to avoid commercial content (Tutaj & van Reijmersdal, 2012). Therefore, the following hypothesis for this research was stated:

Hypothesis 1: The disclosure of sponsored content will generate a more negative effect on

purchase intention of social media users than the non-disclosure of sponsored content.

Disclosure of sponsored content and attitude toward the source

Based on the theory of transparency it can be suggested that people would have a more positive attitude towards the source of the message if influencers disclose the sponsorship with the brand (Woodroof, Howie, Syrdal, & Van Meter, 2020). This theory was supported by researchers Dhanesh and Duthler (2019) which proved that transparency of influencers

positively affected attitude towards them and increased the user's engagement and trust. Ikonen, Luoma-aho, and Bowen (2017) found that legal disclosure of sponsorship is linked to transparency and makes commercial posts more efficient, attractive, and entertaining for consumers, which will also positively affect attitude towards the source who posts them. Therefore, users appreciate the honesty about the commercial nature of posts and trust influencers more and, as a result, sponsorship disclosure improves the user's attitude towards the source of the message.

However, Hwang and Jeong (2016) found that when influencers were explicitly informing their followers regarding the sponsorship using the sign "sponsored", users had a

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10 more negative attitude towards the source of the message than users who were exposed to posts with the non-disclosure of sponsorship. After exposure to posts with sponsorship

disclosure, users lose credibility towards influencers as they perceive these posts as unreliable and dishonest. Stubb and Colliander (2019) supported this result and explained it by the fact that users become more skeptical regarding the product review posted by influencers and lose trust towards them when influencers openly engage in commercial relationships with brands. However, Stubb and Colliander (2019) used a hashtag for sponsored content rather than a feature of "sponsored" label which could affect this relationship. Since there are laws and regulations which force brands and influencers to disclosure the sponsorship with the "sponsored" label (Spangler, 2017), not a hashtag, and users might be aware of it and lose trust towards influencer as they do not report sponsorship disclosure correctly.

Since influencer marketing is growing rapidly and the user's interactions with sponsored posts become more frequent, laws and regulations were introduced to control the sponsored content. Therefore, the "sponsored" label helps users understand if influencers openly disclose the sponsorship or they are trying to hide it. When influencers do not disclose the sponsorship as required, users can not recognize the persuasive attempt (Krouwer, Poels, & Paulussen, 2017); therefore, the credibility of influencers and user's trust towards them decrease. Thus, users would appreciate the honesty and transparency of influencers who disclose the

sponsored content and keep following them. Therefore, the following hypothesis was stated:

Hypothesis 2: The disclosure of sponsored content will generate a more positive effect on

attitude towards the source of the message than the non-disclosure of sponsored content.

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11 Attitude towards the source of the message can vary by level of Instagram involvement. It can be assumed that if the person is familiar with the platform and uses it actively, he/she is frequently exposed to sponsored content and highly aware of influencer marketing. Thus, active users respect the disclosure of sponsorship as they know about laws and regulations behind it.

Ting, Ming, de Run, and Choo (2015) indeed found that a high level of Instagram

involvement can improve attitude towards the source of the message compared to a low level of Instagram involvement because if they are involved they are more likely aware of the platform, its features, and rules. The researchers Cheung and To (2016) also stated that users with high social media involvement are highly informed about laws and features of the platform, and are more likely to evaluate the content. It occurs because users with high Instagram involvement have higher motivation and ability to evaluate the sponsored content and form their own opinions (Lee & Huh, 2010). For instance, when seeing a post with sponsorship disclosure, they understand that influencers received monetary compensation for sharing it (Archer & Harrigan, 2016). This money can be invested in improving influencers' profiles which is beneficial for active followers as well. Also, when influencers openly disclose the sponsorship, they give users with high Instagram involvement an opportunity to form their opinions about products. However, users with low Instagram involvement are not able to perform this evaluation; therefore, only highly involved users would appreciate the sponsorship disclosure and openness of the influencer and evaluate him/her more positively. Since highly involved users are aware of the nature of sponsored content and laws and regulations which control the sponsorship disclosure, they are going to have a more positive attitude towards influencers who correctly disclose the sponsorship and openly inform the audience about that they were paid for the posts.

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12 However, the results of De Jans, Cauberghe, and Hudders (2018) showed that media literacy, such as Instagram involvement, had a negative effect on the attitude towards the source. This effect can be explained using the theory of Uses and Gratifications which shows how and why people are using this specific social media platform (Hicks et al., 2012; Ko, Cho, & Roberts, 2005). People with high involvement use Instagram more frequently than people with low involvement and actively make use of its features to communicate and get entertained. As a result, users get gratifications, such as gaining new knowledge, improving their self-esteem, and building the network. However, sponsored posts do not satisfy these gratifications, as people are simply forced to interact with these posts, which can negatively affect attitude towards the source of the message. It occurs because people experience cognitive dissonance and selective avoidance as a result of the exposure to unpleasant posts (Mühlhauser, Kasper, & Steckelberg, 2007).

People with a higher Instagram involvement are exposed to sponsored content daily and are more aware of influencer marketing, sponsored content, financial ties between brands and influencers, and laws and regulations which control them. Thus, these users will be more critical towards influencers who hide the sponsorship or disclose it incorrectly and have a more positive attitude towards influencers who openly discloses the sponsorship as it allows users to form their own opinions. Therefore, the following hypothesis was stated to examine if Instagram involvement plays the role of a moderator in the relationship between sponsorship disclosure and attitude towards the source of the message:

Hypothesis 3: The disclosure of sponsored content will generate a more positive effect on

attitude towards the source of the message than the non-disclosure of sponsored content, but this effect will be stronger for users with a higher level of Instagram involvement.

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13 Figure 1. Conceptual model of this research

Methods

Study design

Due to the nature of the research question, it was decided to use the experimental method as it allows investigating the cause and effect relationship between variables (Thorson, Wicks, & Leshner, 2012). This experimental design is the only research design that allows the

manipulation of the variables by which the effect of sponsorship disclosure on purchase intention and attitude towards the source of the message can be investigated.

This study employed a full factorial experimental design with one factor (disclosure versus non-disclosure). The participants were randomly assigned to either the experimental group with an Instagram post with disclosure of sponsorship (condition 1) or the experimental group with an Instagram post with no disclosure of sponsorship (condition 2). Based on the

proposed hypotheses the variable "Instagram involvement" played the role of a moderator in the relationship between the independent variable and attitude toward the source. The

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14 variables "Purchase intention" and "Attitude towards the source of the message" were

dependent variables of the study.

Participants

Since the effect of disclosure versus non-disclosure of sponsored content on social media was examined, it was important to choose a sample that was familiar with social media platforms and active on Instagram. Therefore, a non-random sampling method, namely purposeful convenience sampling, was used to select participants with specific characteristics to increase the internal validity of the study. The main inclusion criteria were familiarity with Instagram and knowledge on how to use it (post, like, and share pictures) and being aged between 18 and 49 years. According to social media statistics, 92% of all Instagram users consist of people from 18 to 49 years old (Westwood, 2019). Thus, the sample included females and males from 18 to 49 years old who were users of Instagram and had active accounts there. There was no interest in investigating the effect of sponsorship disclosure on users from one particular country as Instagram features were identical for all countries around the world. Therefore, the nationality of the participants was not taken into consideration. Social media users who had business accounts on Instagram were excluded as they are highly aware of Instagram features, the nature of sponsored content, and its effects on social media users. Due to participant bias, their responses could affect the results of the study, make them less

reliable, and decrease the validity (Keeble, Barber, Law, & Baxter, 2013). 130 participants took part in this experiment. Most of the participants were males, 71 out of 130 participants, and 59 were females. The mean of the participants' age was 29.94 (SD = 8.91). All 130 participants had personal Instagram accounts.

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15 To manipulate the independent variable of the study, the disclosure of sponsorship, two fictitious Instagram posts were created and produced using Photoshop. In case real Instagram posts were used, people could have been exposed to them before the experiment and have existing attitudes and intentions. Using fictitious posts can help to limit the effect of existing attitudes and intentions (Yoo, 2007). The created posts were identical, however, one post included the disclosure of sponsorship (the sign “sponsored” on the top of the post) and the other one did not include any sponsorship disclosure (there was no sign “sponsored” on the top of the post). Each post included the same influencer's profile name (the source of the message), profile picture, the image of the influencer using the product, description of the post, and a number of likes. It was decided to use a female influencer because it was found that 84% of Instagram influencers in 2019 were females (Guttmann, 2020). The fictional account name, "Ryday", was created as it explained the life-style nature of the account. The product selected for the post was a shower gel by Palmolive, a famous brand of care products that is one of the most highly rated sustainable care brands in Europe which offers a huge variety of products (Stewart & Niero, 2018). A shower gel is a unisex product, which can be used by males and females of different age groups. The created image for the post showed the influencer taking a shower and using a Palmolive shower gel. The post had 42303 likes that showed that the influencer was popular on Instagram among other users. The comment "the best morning with my favorite Palmolive gel!" was written as a general promotion post comment on Instagram which proved that the influencer used this product by herself. As inconsistency in the stimuli can influence the results, these features did not vary across the posts. The posts which were created for this study can be found in Appendix 1.

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16 The questionnaire for this experiment was created using Qualtrics software. The participants were recruited online via social media platforms, such as Instagram, Facebook, and LinkedIn. The invitation to the experiment was posted on Instagram pages, Facebook walls, and

LinkedIn profile pages of the Communication science researcher who was conducting this study. The invitation included information about the study (the fact that this research studied the effects of Instagram posts on users), the purpose of the study (Master thesis of a student of the University of Amsterdam), the required characteristics to participate (only participants from 18 to 49 years old who are users of Instagram could participate). The link to the Qualtrics experiment was attached to the invitation post. The data collection was conducted from 4 May 2020 till 18 May 2020.

In the beginning, the participant was asked to read the full description of the research and sign the informed consent to participate. In this section of the questionnaire, the participant was informed about privacy and anonymity. After agreeing to take part in the research, the participant was transferred to the page of the actual experiment. The participant was asked several questions regarding their demographic characteristics, such as gender and age. Also, the participant was asked if he or she had a personal Instagram account. Then, several

questions about their Instagram involvement were asked. After that, they were exposed to one of the stimuli (the fictitious Instagram post) which was assigned to each participant randomly. On the next page, several questions about purchase intention and attitude towards the source of the message were asked. Then, the manipulation check was performed to make sure participants could recall the nature of the post they saw. The experiment took from 5 to 10 minutes.

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17 Firstly, a dummy variable for independent variable " Disclosure of sponsored content"

(Disclosure of sponsorship = 1, Non-disclosure of sponsorship = 0) was created. Secondly, for the variable "Personal account" which showed if the person had a personal account on

Instagram, "yes" was coded as 1, and "no" was coded as 2. The variables for demographic characteristics, such as gender and age, were also created. For the variable gender, male was coded as 1 and female was coded as 2. Age was a continuous variable. The variable "Recall" was created to perform a manipulation check and showed if the person could recall if the post he saw was sponsored, "yes was coded as 1, and "no" was coded as 2. The variables

"Instagram involvement", "Attitude towards the source of the message", and "Purchase intention" were latent concepts, which means that there were several items that were required to measure them. All these variables were consistently measured using a 7-point Likert scale with end values, such as "strongly disagree" to "strongly agree" (Likert, 1932). The complete survey can be found in Appendix 2.

The scale chosen for Instagram involvement was based on the scale developed by Tiggemann, Hayden, Brown, and Veldhuis (2018), which had high reliability of 0.76. The created scale included the following seven statements: "I regularly upload pictures on Instagram", "I like and comment pictures of others on Instagram", "I enjoy receiving likes and comments from other users on Instagram", "I carefully choose pictures to post on my Instagram profile", "I regularly follow other users on Instagram", "Other Instagram users frequently follow me on Instagram", "I can state that I am an active user on Instagram". Scores could range from 1-7, with higher scores indicating higher Instagram involvement.

Purchase intention was measured based on several items to measure purchase intention as proposed by Spears and Singh (2004). The scale of these researchers had high reliability of 0.97. The following four statements were used: “I would like to try the product", “I intent to

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18 buy this product”, “I want to buy this product”, and “I will look for this product in a

store”. Scores could range from 1 (Strongly disagree) to 7 (Strongly agree).

For attitude towards the source of the message, the following three statements were offered: "I think the influencer who made the post looks appealing", "I think I can trust the influencer who made this post", "I think the influencer uses the product promoted", "I think the influencer carefully selects products to promote on his/her profile". These items were self-developed as there was no reliable existing scale found. Scores could range from 1 (Strongly disagree) to 7 (Strongly agree).

To find the most suitable scale to measure the latent concepts, the factor analysis was used. It was found that the Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy was 0.875, which is above 0.5. From this information, it was concluded that the sample for the research was adequate. In addition, Bartlett’s test of sphericity showed a strong significant result, χ 2(105) = 1260.62, p = 0.001. Therefore, all assumptions were met and a factor analysis could be performed. From the factor analysis, it was visible that there were three factors with an eigenvalue above 1. Factor 1 was strong with an eigenvalue of 6.466, and explaining 43.104% of the data variance. Factor 2 had an eigenvalue of 2.987, and explained 19.92% of the

variance in data. Factor 3 had an eigenvalue of 1.149, and explained 7.66% of the variance. All factors together explained 70.68% of the total variance. The Scree plot and matrix also showed that there were three factors. Cronbach's alpha was calculated to test the reliability of the scales. All factors had high reliabilities. For factor 1, Instagram involvement, Cronbach's alpha was 0.92, factor 2, Purchase intention, had a Cronbach's alpha of 0.89, and factor 3, attitude, had a Cronbach's alpha of 0.83. The table with results of the factor analysis can be found in Appendix 3.

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19 Manipulation check

86 participants (95.6 %) out of 90 who saw the post with non-disclosure could identify that they saw a non-sponsored post, and 32 participants (80%) out of 40 who were exposed to the post with disclosure could correctly identify that they saw the sponsored post. A chi-square test of independence was done to test the relationship between the variables Disclosure of sponsorship, (disclosure versus non-disclosure), and manipulation check, recall of the nature of the post seen (disclosure versus non-disclosure). This relationship was found to be

significant, χ2 (1, N = 130) = 19.23, p = .001. Hence, the manipulation check as measured with recall was successful and the research can be conducted.

Randomization check

In order to check whether the respondents in the two conditions are similar in terms of

background variables, randomization checks were performed. For the variable gender, the chi-square was conducted. It was found that the test was not significant, χ² (1, N = 130) = 0.13, p = .144, which means that the randomization of gender was successful. For the variable age (M = 29.94; SD = 8.91), the ANOVA test was performed to check if the randomization was successful. The test showed that the mean age in the non-disclosure condition (M = 30.69, SD = 9.40) was not significantly different from the mean age in the disclosure condition (M = 28.25, SD = 7.5), F(1, 129) = 2.1, p = .15. Thus, the randomization checks were successful and all participants in this research were equally distributed by gender and age across conditions.

Testing the hypothesis

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20 To test the effect of the independent variable Disclosure of sponsorship (non-disclosure versus disclosure) on the dependent variable Purchase intention and test the hypothesis that disclosure of sponsored content will generate a more negative effect on purchase intention of social media users than non-disclosure of sponsored content, an independent samples T-test was conducted. Before conducting the test, the assumptions were checked. All the values were normally distributed, and the Levene's test on the homogeneity of variances is not statistically significant, F(128) = 0.169, p= 0.682, so assumptions were met. It was found that there was no significant difference between the means of the post with no sponsorship

disclosure (M = 4.34, SD = 1.50) and the post with disclosed sponsorship (M = 4.25, SD = 1.39) on purchase intention, t(128) = 0.318, p = .751. Therefore, purchase intention was the same for participants who saw the post with sponsorship disclosure and participants who saw the post with non-disclosure of sponsorship. Therefore, hypothesis 1 is rejected.

Hypothesis 2

To test the main effect of the independent variable Disclosure of sponsorship (disclosed versus non-disclosed) on the dependent variable Attitude towards the source of the message and test the hypothesis that disclosure of sponsored content will generate a more positive effect on attitude towards the source of the message than non-disclosure of sponsored content, a second independent sample T-test was conducted. All the values were normally distributed, and the Levene's test on the homogeneity of variances is not statistically significant, F(128) = 0.013, p= 0.911, so the assumptions were met. It was found that there was no significant difference between the mean of the post with no sponsorship disclosure (M = 4.62, SD = 1.35) and the post with disclosed sponsorship (M = 4.42, SD = 1.27) on attitude towards the source of the message, t(128) = 0.831, p = .407. Thus, attitude towards the source of the message did not differ between participants who saw the post with sponsorship disclosure and participants

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21 who saw the post with non-disclosure of sponsorship. Therefore, hypothesis 2 is not

supported.

Hypothesis 3

To test the interaction effect between the independent variable Disclosure of sponsorship and the moderating variable Instagram involvement on attitude towards the source of the message and test the hypothesis that the disclosure of sponsored content will generate a more positive effect on attitude towards the source of the message than the non-disclosure of sponsored content, but this effect will be stronger for users with a high level of Instagram involvement, a linear regression analysis was conducted, with Disclosure of sponsorship and Instagram involvement included as interaction term. The assumptions for the test were checked. The residuals average to zero at all levels of the outcome predicted are normally distributed, and prediction errors are equal size at different levels. Thus, assumptions were met.

After conducting the regression analysis, it was found that the model predicted 14.3 % of the variation in attitude towards the source of the message which means that this model is a significant, but moderate predictor, F(3, 129) = 6.982, p = .001. Results of the regression are depicted in table.

Table 1. Summary of the regression model

β t p 95% Confidence interval for B (Constant) 1.321 .189 [-0.713; 3.576] Disclosure of 0.460 1.712 .089 [-0.205; 2.840]

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22 sponsorship Instagram involvement 0.809 3.265 .001 [0.278; 1.133] Interaction of Instagram involvement x Disclosure of sponsorship -0.721 -2.052 .042 [-0.621; -0.011]

It was found that the disclosure of sponsorship did not have a significant main effect on attitude towards the source of the message, t = 1.712, p = .089, 95% CI [-0.205; 2.840]. When looking at the effect of Instagram involvement, it was found that there was a significant main effect on attitude towards the source of the message, t = 0.705, p = 0.001, 95% CI [0.278; 1.133], meaning that someone with higher Instagram involvement had a more positive attitude towards the source of the message. Also, the interaction effect of Instagram involvement and Disclosure of sponsorship was found to be significant, t = 0.316, p = .042, 95% CI [0.621; -0.011]. Someone with higher Instagram involvement who was exposed to the post with disclosure of sponsorship had a lower attitude towards the source of the message than

someone with higher Instagram involvement who was exposed to the post with no disclosure of sponsorship. Therefore, hypothesis 3 was rejected, as reversed significant results were found.

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23

Additional testing

To test whether attitude towards the source of the message is mediating the effect of

disclosure of sponsored content on purchase intention, an additional regression analysis using PROCESS model 4 was used. It was found that the effect of disclosure of sponsorship on attitude towards the source of the message was not significant, b = - 0.210, t(129) = - 0.831, p = .407, 95% CI [- 0.709; 0.289]. There was a significant direct effect of attitude towards the source of the message on purchase intention, b = 0.636, t(128) = 7.905, p = .001, 95% CI [0.477; 0.795]. The direct effect of disclosure of sponsorship on purchase intention was not significant, b = 0.044, t(129) = - 0.193, p = .847, 95% CI [- 0.411; 0.500]. The indirect effect of disclosure of sponsorship on purchase intention is - 0.091. Thus, there was a positive relation between attitude and intention, indicating that the higher attitude towards the source, the higher purchase intention is. The model which presents the result of the analysis can be found below.

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24 Conclusion and discussion

Discussion of the results of the research

Nowadays, Instagram influencer marketing is often used by companies and brands around the world. Since the results of previous studies were contradicting, it was important to examine the effects of disclosure of sponsored content on purchase intention and attitude towards the source of the message as well as the influence of Instagram involvement. Instagram

involvement was studied as a moderator as more frequent and active usage of Instagram could strengthen or weaken effects. This research was conducted to answer the question: "To what extent does the disclosure versus non-disclosure of sponsored content posted by influencers on social media influence users’ purchase intention and attitude towards the source of the message, and does level of Instagram involvement moderate this relation?".

Based on these results, it can be concluded that disclosure of sponsorship does not affect purchase intention and attitude towards the source of the message. However, the disclosure of sponsorship does have a negative effect on attitude towards the source of the message but only when the user has a higher Instagram involvement. Last, a positive relation was found between attitude and intention.

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25 The non-significant effect of sponsorship disclosure on purchase intention is in line with previous research by Evans, Phua, Lim, and Jun (2017) and Stubb and Colliander (2019), and can be explained by the fact that sponsorship disclosure is required and controlled by laws and regulations people are indifferent to the openness of brands and influencers regarding the nature of sponsored posts. Therefore, it can be assumed that users are used to sponsored content and do not look at the sponsorship disclosure when considering the purchase of promoted products.

The result regarding the non-significant effect of sponsorship disclosure on attitude towards the source of the message is not in line with any existing research. As stated above, users are frequently exposed to Instagram influencer marketing and think about the sponsorship disclosure as an essential part of it; therefore, they do not consider this disclosure when evaluating influencers. That is why this relationship between sponsorship disclosure and attitude towards the source cannot be explained by the concept of skepticism, the theory of transparency.

The negative interaction effect between the sponsorship disclosure and Instagram

involvement on attitude towards the source could also be explained by Uses and Gratification theory as sponsored posts are not satisfying needs (communication and entertainment) and pleasures (having their network and improving self-esteem) of highly involved users, but they are forced to constantly expose unpleasant posts with sponsorship disclosure on Instagram (Hicks et al., 2012). Therefore, users with a higher Instagram involvement selectively avoid posts with explicit sponsorship disclosure because of cognitive dissonance (Mühlhauser, Kasper, & Steckelberg, 2007) and, as a result, negatively evaluate influencers who are paid for their posts, which negatively affects attitude towards the source.

Lastly, it was found that the theory of planned behavior is not applicable to explain the mediating effect of attitude towards the source of the message on the relationship between

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26 sponsorship disclosure and purchase intention, partly, because attitude and intention were positively related as outlined in this theory (Linder, Harper, Jung, & Woodson-Smith, 2017; Su et al., 2015).

Practice implications

Since there was no negative effect of disclosure of sponsorship on purchase intention, companies should not hide the information that their Instagram posts are sponsored. By openly informing users about the nature of the post, they promote their products in a legal way which does not negatively affect purchase intention of users and companies do not risk losing their profit.

Besides, these results are informative for consumers as it explains how influencer marketing works, and how it affects their purchase intention and attitude towards influencers. Based on the results of this research, disclosure of sponsored content does not have any significant effects on purchase intention, which means that users do not have to be warned about negative effects of disclosure of sponsorship.

Also, these results are important for influencers as they show that disclosure of sponsorship does not have any negative effects on attitude towards them. Therefore, influencers should also openly show that they are paid to make a certain post. However, it should be noted that it is not necessarily the case for users with higher Instagram involvement. People who

frequently and actively use this platform are probably more aware of sponsored posts than people with lower Instagram involvement. As a result, after exposure to posts with

sponsorship disclosure, they have a lower attitude towards the source of the message. It can be assumed that users with higher Instagram involvement have more persuasion knowledge and feel more suspicious towards influencers who post sponsored content compared to users with lower Instagram involvement. It occurs because they know that these posts are paid and

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27 the information on them is biased. Therefore, influencers should focus on users with a lower Instagram involvement (the statistics of involvement are available on the Instagram platform). For users with high involvement, they could compensate sponsored posts, which persuade people to buy certain products with a "give-away", such as sending gifts to loyal followers for sharing sponsored posts on their profiles, which can prevent a decrease in attitude towards the source of the message (Singh & Islam, 2019). The give-away strategy is efficient as it targets loyal and active followers and gives them a sense of reciprocity so that users get products for free for sharing certain posts (Serafinelli, 2017).

Theoretical implications

This research is important for communication science researchers as it contributes to the existing knowledge regarding the sponsored content and its disclosure as well as the effect of user's Instagram involvement on the relationship between sponsorship disclosure and

purchase intention and attitude towards the source of the message. Since users became more active online, their knowledge regarding persuasive techniques increases as well. It was found that Instagram involvement played an important role in investigating the effect of sponsorship disclosure on attitude towards the source. Therefore, researchers can focus on this variable and create a new concept as it could potentially affect other attitudes, behaviors, and intentions of users.

Limitations and suggestions for future research

This research has several limitations that could influence the results. Firstly, the sampling method could have affected the findings. For this study, non-probability convenient sampling was used. Therefore, the sample does not represent the population as not all Instagram users had an equal chance to be selected and participate. It is therefore suggested to use random

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28 sampling in future research to be able to draw conclusions regarding the population and increase external validity. Secondly, the product for the post was chosen by the researcher in a biased way. The brand of the product, such as Palmolive, is known by people and this

familiarity could have influenced the results. Thus, a fictional brand should be used in case the study will be replicated or the familiarity with and pre-existing attitude toward an existing brand should be examined and included in the study. It is also suggested to use more brands and types of products to make sure these variables do not affect the results, which will increase the internal validity of the research. Thirdly, the participants were informed that this research was conducted for a Master's thesis, which could have caused social desirability bias so that participants answer questions in the most beneficial way for the researcher since participants knew the researcher as the experiment was distributed using the social media of the researcher. Thus, it is suggested to use social media of the University of Amsterdam and survey platforms to distribute the experiment and prevent biased responses in future research. To conclude, these relationships should be studied further as the concepts of sponsorship disclosure and Instagram involvement are new and many factors that were not included in this study could affect the relationships, for instance, familiarity and attitude towards the brand, and limitations should be taken into consideration.

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Appendix

Appendix 1 - Instagram posts used for the manipulation

Appendix 2 - Survey used for the study

Dear participant,

Condition 2: Non-disclosure of sponsorship Condition 1: Disclosure of sponsorship

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36 With this letter, I would like to invite you to participate in a research study to be conducted under the auspices of the Graduate School of Communication, a part of the University of Amsterdam. This experiment is a part of the graduation seminar of the Master's in Communication Science at the University of Amsterdam. During this course, we are interested in investigating effects of new promotion strategies, such as the influencer marketing. Only participants from 18 to 49 years old who are users of Instagram can

participate. Your opinion is important for this study. This, there are no right or wrong answers to our questions. This experiment will take no longer than 10 minutes.

As this research is being carried out under the responsibility of the ASCoR, University of Amsterdam, we can guarantee that:

1) Your anonymity will be safeguarded, and that your personal information will not be passed on to third parties under any conditions, unless you first give your express permission for this.

2) You can refuse to participate in the research or cut short your participation without having to give a reason for doing so. You also have up to 24 hours after participating to withdraw your permission to allow your answers or data to be used in the research.

3) Participating in the research will not entail your being subjected to any appreciable risk or discomfort, the researchers will not deliberately mislead you, and you will not be exposed to any explicitly offensive material.

4) No later than five months after the conclusion of the research, we will be able to provide you with a research report that explains the general results of the research.

For more information about the research and the invitation to participate, you are welcome to contact the researcher Daria Tkalina at any time. Should you have any complaints or

comments about the course of the research and the procedures it involves as a consequence of your participation in this research, you can contact the designated member of the Ethics

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37 Committee representing ASCoR, at the following address: ASCoR Secretariat, Ethics

Committee, University of Amsterdam, Postbus 15793, 1001 NG Amsterdam; 020‐525 3680; ascor‐secr‐fmg@uva.nl.

Any complaints or comments will be treated in the strictest confidence. We hope that we have provided you with sufficient information. We would like to take this opportunity to thank you in advance for your assistance with this research, which we greatly appreciate.

Kind regards, Daria Tkalina

I understand the above and I agree to participate Yes

No

Question 1: What is your gender? Male

Female

Question 2: What is your age?

Question 3: Do you have only personal account on Instagram? Yes

No

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38 Strongly disagree Disagree Somewhat disagree Neither agree nor disagree Somewhat agree Agree Strongly agree

Question 5: I like and comment pictures of others on Instagram.

Strongly disagree Disagree Somewhat disagree Neither agree nor disagree Somewhat agree Agree Strongly agree

Question 6: I enjoy receiving likes and comments from other users on Instagram.

Question 7: I carefully choose pictures to post on my Instagram profile.

Question 8: I regularly follow other users on Instagram.

Question 9: Other Instagram users frequently follow me on Instagram.

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39

disagree disagree agree nor

disagree

agree agree

Question 10: I think I am an active user on Instagram.

Now we are going to show you an Instagram post. Please look at it carefully.

Question 11: I think the influencer who made the post looks appealing.

Question 12: I think I can trust the influencer who made this post.

Question 13: I think the influencer uses the product promoted.

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40 Strongly disagree Disagree Somewhat disagree Neither agree nor disagree Somewhat agree Agree Strongly agree

Question 15: I would like to try the product.

Question 16: I intent to buy this product.

Question 17: I want to buy this product.

Question 18: I will look for this product in a store.

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41 Yes

No

Thank you for participating!

Appendix 3 - Results of the factor analysis

Scale Item Instagram

involvement

Purchase intention Attitude towards the source of the

message I regularly upload

pictures on Instagram

0.831

I like and comment pictures of others on

Instagram

0.802

I enjoy receiving likes and comments from

other users on Instagram 0.774 I carefully choose pictures to post on my Instagram profile 0.774

I regularly follow other users on Instagram

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42 Other Instagram users

frequently follow me on Instagram 0.759 I think I am an active user on Instagram 0.685

I want to buy this product

0.893

I intent to buy this product

0.757

I would like to try the product

0.727

I will look for this product in a store

0.703

I think the influencer who made the post

looks appealing.

0.872

I think I can trust the influencer who made

this post.

0.648

I think the influencer uses the product

promoted.

0.621

I think the influencer carefully selects

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43 products to promote on his/her profile Percentage of variance 43.104 % 19.915 % 7.662 % Eigenvalue 6.466 2.987 1.149 Cronbach's alpha 0.918 0.893 0.826