#love my new sunglasses : the effect of sponsorship type and brand awareness on consumer responses

(1)

#love my new sunglasses - The effect of sponsorship type and brand awareness on consumer responses

Master’s Thesis

Supervisor: Suzanne de Bakker Date: 29 June 2018

Rebecca Höschen (11620544)

Master Communication Science – Corporate Communication

Graduate School of Communication University of Amsterdam

(2)

Abstract

Instagram- based influencer marketing is winning in popularity, as it provides organizations with a direct and targeted access to large number of consumers at a relatively low cost. However, due to its covert nature, influencer marketing has received heavy criticism lately, as it is argued that in many cases consumers are not able to distinguish between paid and honest recommendations. Thus, sponsors and influencers are now required to disclose sponsored content, which might hinder the effectiveness of influencer marketing.

Since consumer reactions toward sponsorship disclosure are hence, crucial in assessing whether influencer marketing still represents an effective marketing tool, this study examined the relationship between different sponsorship types and consumer reactions, such as brand attitude and purchase intention. In a survey experiment, 121 participants were exposed to two different sponsorship conditions: one where the influencer received direct monetary compensation and another where recommendation was based on a product trial. In addition, by including well-known, as well as less-known brands, it was tested whether brand

awareness influences the relationship between sponsorship type and brand attitude and sponsorship type and purchase intention. Results show that sponsorship type has no significant influence on brand attitude and purchase intention. Participants exposed to the paid product placement condition did not show lower scores than participants in the product trial condition.

(3)

Introduction

Since consumers are increasingly exposed to advertisements and thus, are becoming ‘banner blind’, marketers strive to develop new marketing techniques that ‘camouflage’ commercial content in order to reach consumers (Johansen & Guldvik, 2017). Nowadays, many brands use paid eWom to distribute positive brand messages through opinion leaders (Scott, 2015) and so break through the clutter in the advertisement jungle. By building

alliances with popular bloggers and vloggers on social media platforms, such as Instagram or YouTube, brands aim to endorse their products among consumers (De Veirman, Cauberghe, & Hudders, 2017). Unlike traditional marketing, which is somehow anonymous and often perceived as noise, social eWOM, provides consumers with consumption-based

recommendations through their personal network (Kudeshia & Kumar, 2017). Social eWOM happens when consumers exchange product-, or brand related recommendations through social networking sites in order to influence their networks decision making (Kudeshia & Kumar, 2017). Social eWOM hence is closely linked to a phenomenon, which is dominating today’s advertising industry: Influencer marketing. Influencer marketing allows organizations to connect with consumers organically and at scale and so target their persuasive intents (Johansen & Guldvik, 2017).

Though, influencer marketing happens on most social media channels, Instagram- based influencer marketing has become highly popular due to its unique ability to provide targeted and direct access to a large number of consumers at a relatively low cost (Evans, Phua, Lim & Jun, 2017). Influencer marketing can be described as the identification of key individuals that have the potential to support an organization’s marketing objectives (Scott, 2015). Influencers hence, act as brand advocates by describing experiences they had with a special brand or product. In most cases, influencers are compensated by the organization they recommend. However, compensation is not always disclosed and consumers often perceive influencer marketing as natural, unpaid communication. Paid posts, which are presented as unpaid, unbiased consumer opinions cannot always be easily distinguished from commercial content and might hence be perceived as authentic experiences (Carr &

(4)

Hayes, 2014). Thus, product endorsement that is missing such disclosure and is masqueraded as an upright, independent opinion has received heavy criticism as it is perceived as misleading and unethical (Evans, et al., 2017).

Since, in many cases, consumers are not be able to detect the hidden relationship between the endorser and the sponsor, marketers as well as influencers are required to disclose paid content (Hwang & Jeong, 2016; Evans et al., 2017). Identification of

commercial content is a key element of consumer rights (Cain, 2011) and many countries have laws in place aimed at protecting consumers from masked advertisement. Thus, when sponsored by a brand, influencers have to add a comment that discloses sponsorship. In its simplest form, disclosure might consist in putting a remark, such as “this is a sponsored post“ or the hashtag #sponsored (Hwang & Jeong, 2016). However, while required sponsorhip disclosure protects consumer rights, it might on the other hand, reduce an advertisement’s effectiveness. Previous literature shows that sponsorship disclosure might activate

consumers‘ persuasion knowledge by increasing perceived persuasive intent and making consumers understand the commercial nature of the sponsored content (Boerman, Willemsen, & van der Aa, 2017; Boerman, van Reijmersdal, & Neijens, 2012). In these cases, persuasion becomes less powerful, as the disclosure of the sponsored content negatively impacts users‘attitude towards the endorser and the advertised brand (Liljander, Gummerus, & Soderlund, 2015). Research by Boerman, et al. (2012) shows that, the longer consumers are exposed to disclosure, the higher the perceived persuasive intent and the attitudional persuasion knowledge is which in turn leads to less favorable brand attitudes. Sponsorship compensation aimed at stimulating influencers to publish a

recommendation comes in various ways, including cash compensation, product discounts, samples and exclusive activity attendence (Lu, Chang & Chang, 2014). Previous research suggests that, whether consumers perceive an advertisement as misleading might also depend on the relationship between sponsor and influencer and the compensation provided. Lu et al. (2014) distinguish between direct-monetary sponsorship (cash compensation) and indirect-monetary sponsorship (product discounts, samples or coupons). While research by

(5)

Lu et al. (2014) suggests that sponsorship type does not influence consumer attitudes, Hsu (2010, in Lu et al. 2014) and Fu (2010, in Lu et al. 2014)argue that indirect-monetary

sponsorship is perceived as more acceptable by consumers, as it is seen as a mere product trial instead of a marketing activity. Thus, it remains unclear whether the type of

compensation the influencer receives indeed impacts consumer attitudes towards the advertisement and the exposed brand. The study at hand aims to clarify this relationship by testing whether an advertisement post compensated by a product trial leads to a more positive brand attitude and consequently a higher purchase intention, than an advertisement post that is based on direct-monetary compensation.

Besides sponsorship type, brand awareness is shown to impact disclosure effects, as high brand awareness improves trust in a brand and its advertisement (Smith & Wheeler, 2002). Well-known brands are perceived as more credible than unknown brands (McDonald & Sharp, 2000), as consumers believe that marketers employed by well-known brands are less likely to use misleading tactics (Smith & Wheeler, 2002). Previous research by Lu et al. (2014) shows that consumers are more likely to believe claims made by brands with high brand awareness. Thus, high brand awareness is likely to increase persuasion, as the

consumer’s attitude towards the brand and the sponsored content is more positive. Research also shows that consumers generally tend to choose brands with high brand awareness when making a purchase decision, as they relate product quality to brand awareness and so perceive purchasing a well-known brand as less risky (Ho, Chiu, Chen & Papazafeiropoulou, 2015). However, it is not tested yet, whether brand awareness also impacts consumer

acceptance of sponsorship types. We do not know, whether direct-monetary compensation is perceived as less negative when employed by well-known brands due to enhanced

credibility, compared to less-known brands. This study strives to answer this question. Research investigating the impact of sponsorship disclosure on consumer responses is quite extensive. However, most studies concentrate on the impacts of sponsorship

disclosure in general by testing whether sponsorship diclosure leads to negative consumer reactions or not. The study at hand aims to draw a more detailed picture by comparing

(6)

sponsorship types and including a moderator that has not yet been introduced to the relationship between sponsorship disclosure and consumer responses, such as brand attitude and purchase intention. Brand awareness has been investigated in relation to brand attitude and purchase intention, but has not yet been associated with sponsorship types. Since expenses on sponsored content are growing, it seems critical to assess whether influencer marketing indeed is a vital marketing tool that brings about the desired effects. Social platforms, such as Instagram, give consumers the opportunity to speak behalf of organizations, making it crucial for marketers to understand what motivates influencers to share brand content and how this content influences consumer behavior (Kudeshia & Kumar, 2017). Thus, this study aims to help marketers implement better marketing techniques by answering the following question:

RQ: To what extent are consumer responses, such as brand attitude and purchase intention impacted, by a post‘s sponsorship type and an organization’s brand awareness?

Theoretical Framework

Sponsorship Types and perceived persuasive intent. Disclosure of sponsored content is intended to give consumers an indication about the relationship between an influencer and the sponsor and so help consumers recognize potential advertising content (FTC; 2013; Van Reijmersdaal, Fransen, van Noort , Opree, Vandeberg, Reusch, van Lieshout & Boerman 2016). When content is sponsored, influencers are required to add a remark that discloses sponsorship and communicate the type of compensation they

recieved. Previous research suggests that such disclosure can negatively impact consumer’s responses toward sponsored content. The persuasion knowledge model (Friestad & Wright, 1994) claims that consumers can use the knowledge provided by the disclosure to recognize a persuasive intent. Once persuasion is recognized, the message is perceived as a goal- directed, persuasive message, which in turn, leads to a lower motivation to process the

(7)

message or even a greater motivation to discount it. Sonsorship disclosure can thus be seen as an important mechanism of activating a consumer’s persuasion knowledge, which in turn, might activate negative consumer responses. Previous research showed negative effects of disclosing sponsorship in blogs on consumer attitude toward the brand, top-of- mind brand awareness (Campbell, Mohr & Verlegh, 2013) and purchase intention (Lijander et al., 2015). Reactance theory supports these claims, as it suggests that individuals perceive persuasive intents as a limitation of their freedom of choice and thus, do not appreciate to be persuaded or even manipulated (Brehm & Brehm, 1981, in van Reijmersdaal et. al, 2016). Research by van Reijmersdal et al. (2016) indeed shows that the more participants activate persuasion knowledge, the higher is their resistance toward the advertisement and the more negative the consumer responses.

Whether consumers perceive an advertisement as misleading might also depend on the relationship between sponsor and blogger and in particular, which type of compensation is granted by the sponsor in order to motivate the influencer to publish a recommendation post. Compensation comes in many ways, including subtle compensation, such as small product discounts or heavier compensation, such as cash payments that can be seen as a sort of salary. Lu et al. (2014) distinguish between direct-monetary sponsorship (cash compensation) and indirect-monetary sponsorship (product discounts, samples or coupons). However, according to their results, attitude towards the advertisement, which represents an important predictor of brand attitude, was not influenced by whether the blogger received direct-monetary compensation or indirect one. It only mattered that sponsorship in general was revealed honestly so that consumers did not feel tricked or misleaded. Hwang and Jeong (2016), who investigated the effects of different ways of sponsorship disclosure, reached a similar conclusion and moreover, suggest that not only the sponsorship type itself matters, but also the way it is mentioned by the influencer. In their study, the researchers compared influencers that only included simple sponsorship discloure (e.g. “this post is sponsored“) with influencers that additionally explained that, though it is a sponsored post, their opinions are honest. Compared to the no sponsorship disclosure condition, attitudes

(8)

were more negative in the simple disclosure condition, but disappeared in the “honest opinion“ condition. Thus, Hwang and Jeong (2016) suggest that by emphasizing honest opinions, sponsored posts might be seen as altruistic and thus, not perceived negatively by the consumer. Sponsored posts, hence do not necessarily lead to negative consumer responses, especially when compensation is indirect and influencers honestly communicate the relationship between them and the sponsoring party.

Hsu (2010, in Lu et al. 2014) and Fu (2010, in Lu et al. 2014) on the other hand, argue that indirect-monetary sponsorhsip is generally perceived as more acceptable by consumers, as it is seen as a product trial instead of a marketing activity. Companies giving direct-monetary rewards to influencers are often perceived as buying goodwil and the influencer might be perceived as selling his or her opinion and thus, the reader’s trust (Fu, 2010, in Lu et al. 2014; Hsu, 2010, in Lu et al. 2014).Researchs shows that, when

advertising intent is explicitly expressed in a recommendation post, which is particularly the case when a post has been motivated by cash compensation, consumers are less likely to develop a positive behavioral intention toward the product (Uribe, Buzeta & Velázques, 2016). Consequently, sponsored content that is motivated by direct-monetary rewards might increase negative consumer responses that are triggered by sponsorship disclosure and persuasion knowledge.

In this study, sponsorship type refers to the kind of benefit the influencer receives by the sponsoring party and will be categorized into two types: direct-monetary (cash

compensation) and indirect-monetary (product trial) benefits. Sponsored posts rewarded by direct-monetary compensation will include the sentence “This post is paid by the

organization“, while sponsored posts rewarded by indirect-monetary compensation will show the comment “This recommendation is based on a product trial“.

Brand attitude. Brand attitude, which can be described as a “consumer’s overall evaluation of a brand” (Kudeshia & Kumar, 2017, p.7) represents an important predictor of consumer behavior, as it determines whether a consumer shows favorable or unfavorable reactions towards brand-related stimuli. It can be seen as the evaluative dimension of a

(9)

brand’s image, which is related to an individual’s beliefs and feelings towards a brand’s attributes (Langero, Rita & de Fátima Salgueiro, 2018). Every time a consumer experiences a brand’s attributes, he or she develops evaluations and judgements about this attributes, which over time, become an overall evaluation of the brand. Thus, brand attitudes

“represents the synthesis of all relevant brand elements present in consumers’ memory and derived from experiencing the brand in various levels” (Langero et al., 2018, p. 149).

Previous research shows that a consumer’s attitude towards advertisement is a strong predictor of brand attitude (Sweetser, Ahn, Golan & Hochman, 2016). If an advertisement is perceived as good, it is more likely that the brand promoted in the advertisement is also perceived favorably. Brand attitude and a brand’s communication efforts are hence, closely linked, as enhanced frequency and breadth of communication are assumed to lead to a more positive brand attitude through more consumer-brand contact (Langero et al., 2018).

Online reviews, posted by influencers, have shown to be very successful in impacting a consumer’s evaluation of a given product or service (Hong & Park, 2012) and positive social eWOM has been positively related to a better brand attitude (Kudeshia & Kumar, 2017). However, while sponsorship in general might be positively related to a consumer’s brand attitude, several studies show that, on the other hand, sponsorship disclosure might reduce persuasion (Boerman et al. 2012; van Reijmersdal, Lammers, Rozendaal & Buijzen, 2015). Campbell et al. (2013) found that when sponsorship was disclosed in blogs, consumers’ attitudes towards the brand represented in the sponsored post became less favorable. Research on sponsorship disclosure of TV- and radio content also suggests that disclosing sponsorship negatively impacts individuals’ brand attitudes (Boerman et al. 2012; Wei, Fischer & Main, 2008). Since disclosure in general, and direct-monetary compensation in particular, have shown to be perceived as “buying opinions”, it seems plausible to assume that a recommendation post motivated by cash compensation leads to a negative attitude toward the advertisement. When a consumer’s attitude towards the advertisement is negative, his or her attitude towards the brand is also likely to be

(10)

unfavorable, as these concepts are closely linked (Sweetser et al., 2016). Thus, it is hypothesized that:

H1: Direct-monetary sponsorship will lead to a less positive brand attitude than indirect-monetary sponsorship

Purchase intention. Purchase intention can be described as “a consumer’s

conscious plan or intention to make an effort to purchase a product“ (Spears & Singh, 2004, p. 5). Previous research suggests that purchase intention is closely linked to brand attitude, as attitude towards a brand can predict a consumer’s intention to purchase that brand (Lu et al., 2014; Hansen, Jensen, & Solgaard, 2004). This assumption is supported by several behavioral models, such as the Theory of Reasoned Action (Fishbein & Ajzen, 1975, in Spears and Singh, 2004) or the Theory of Planned Behavior (Aizen, 1985, in Spears and Singh, 2004), which argue that attitudes directly determine behavioral intention. However, although research suggests that individuals’ attitudes toward a brand might predict their intention to purchase that brand, brand attitude and purchase intention can be treated as separated, yet correlated, concepts (Spears & Singh, 2004).

Social eWom has changed the way in which consumers make purchase decisions, as nowadays, consumers are able to easily exchange or consume product- or brand related information. Research shows that consumer-generated content significantly influences an individual’s purchase intention (Schivinski & Dabrowskia, 2014; Kudeshia & Kumar, 2017). However, while some studies suggest that advertisements with endorsement evoke higher purchase intention than ads containing mere product reviews (Wang & Lin,2011) or traditional banner advertisement (Becker-Olsen, 2003), others claim that sponsorship disclosure might negatively influence purchase intention (Liljander et al., 2015; van

Reijmersdal et al., 2016). Becker-Olsen (2003) argues that sponsored content requires more processing than traditional banner advertising and thus is more engaging. However, since more resources are needed to process the advertisement, its content might be evaluated more critically by the consumer in a sense that only content that is perceived as useful and trustworthy leads to positive affect. If consumers perceive a message to be biased or

(11)

“bought”, they might downgrade source credibility and resist the persuasive intent of the message, which in turn, leads to a more negative brand attitude and a lower purchase intention (Lee & Koo, 2012, in Lu et al., 2014). Since posts rewarded by indirect-monetary compensation are less likely to be perceived as “bought“ content, it is hypothesized that:

H2: Direct-monetary sponsorhip will lead to a lower purchase intention than indirect-monetary sponsorship

Brand awareness. Most researchers use two dimensions to define brand

awareness: brand recognition and brand recall (Lu et al., 2014). Brand recognition can be described as a “consumer’s ability to identify a brand when given the brand name as a cue, while brand recall is defined as consumer’s ability to recall a brand when given the product category“ (Keller, 1993, p. 4). Consumers receive brand awareness via marketing

communication channels, including social media platforms. By repeteadly being exposed to marketing campaigns, a consumer’s ability to recognize and recall a certain brand increases. Brand awareness is a major predictor of brand equity, which relates to consumers having more confidence in a particular brand, which, in turn enhances consumers’ willingness to purchase that brand (Sasmita & Suki, 2015). Previous research indeed suggests that high brand awareness improves trust in a brand and its advertisement (Lu et al., 2014; Smith & Wheeler, 2002). Consumers are shown to use brand awareness as a heuristic when choosing a product, as they perceive well-known brands as more credible than less-known brands (McDonald & Sharp, 2000). They have more trust in marketers’ honesty and believe that marketers employed by well-known brands are less likely to use misleading tactics (Smith & Wheeler, 2002). Thus, when brand awareness is high, sponsored content should be more persuasive, as a consumer’s attitude towards the brand and the sponsored

recommendation post is more positive (Wang, Zhang, Choi, & Eredita, 2002). Based on the assumption that brand awareness positively influences consumer attitudes, the following hypotheses were derived:

(12)

H3a: Direct-monetary sponsorship will lead to a less positive brand attitude than indirect-monetary sponsorship when brand awareness is low

H3b: Direct-monetary sponsorship will lead to a lower purchase intention than indirect-monetary sponsorship when brand awareness is low

H3a; H3b

H1; H2

Figure 1. Proposed conceptual model with main- and moderation effects: Effect of

Sponsorship type on brand attitude and purchase intention and effect of brand awareness on the relationship between sponsorship type and brand attitude, as well as on sponsorship type and purchase intention.

Method

Design

In order to evaluate the hypotheses, this study applied a 2 (Sponsorship type: direct-monetary vs indirect-direct-monetary) x 2 (Brand awareness: High brand awareness vs low brand awareness) between-subjects factorial design. The experiment was embedded in a web-based, self- completion survey, where participants were randomly assigned to one of the four

Brand awareness - High - Low Sponsorship type - Direct monetary - Indirect monetary a) Brand attitude b) Purchase intention

(13)

experimental conditions (Group 1: N = 36, Group 2: N = 36, Group 3: N = 34, Group 4: N = 36), (see Figure 2).

Sponsorship type

Brand awareness

Direct-monetary Indirect-monetary

High brand awareness Group 1: Direct-monetary compensation Group 2: Indirect-monetary compensation

x High brand awareness x High brand awareness

Low brand awareness Group 3: Direct-monetary compensation Group 4: Indirect-monetary compensation

x Low brand awareness x Low brand awareness

Figure 2. 2x2 between-subjects factorial design: Sponsorship type (2 levels) x brand awareness (2 levels)

Participants

Participants were recruited using convenience, as well as snowball sampling. The survey was distributed to personal contacts via Email, Whatsapp and Facebook. The weblink was also published on the author’s personal Facebook site with the request to participate in, or share the survey. Participants were required to be at least 18 years old and in possession of an Instagram account. Filter questions at the beginning of the survey ensured that these criteria were met.

In total, 142 participants entered the experiment (N = 142). However, 21 participants did not pass the manipulation check, as they indicated that they could not remember which brand name was presented below the post’s picture. These participants were excluded, which led to a total of N = 121, of which 75.4% were female and 24.6% male. The overall mean age was M = 24.73 (N = 121, SD = 3.14). The youngest participant was 19 years old, the oldest 41. Though many nationalities were represented in the sample, respondents were mainly German (32.4%), Dutch (14.1%), Spanish (4.9%) or Brazilian (4.2%). Moreover, respondents were highly educated, as 85.1% graduated from university, with 65.4% holding

(14)

an undergraduate degree and 19.7% having a postgraduate degree. To gain insights in how respondents use Instagram, respondents were asked how often they use the social media platform and which activities they perform. Most respondents can be seen as heavy users, as they indicated that they use Instagram more than once a day (31.7%) or a few times a week (31.7%). The majority uses the platform to follow other users and post about themselves (66.2%), while some participants only use it to check out other user’s posts (24.6%).

Material

In order to test the variables used in this study, four Instagram posts were created with one Instagram post per condition. For the purpose of this study, a suitable Instagram picture was created by a mock-up author named “hellosunshine“. Sunglasses were chosen as the advertised product, because they are a gender- neutral product that is used regularly by people of all ages. Moreover, since summer is coming up, people might be thinking about purchasing new sunglasses. Every mock- up Instagram post contained the same picture, which shows a small side table standing on a beach. On the table there are some accesories such as a magazine, a bag, two glasses of wine and the sunglassess, which are presented prominently in the centre of the picture. Given the fact, that summer and vacation season have started, a post about someone being at the beach and promoting summer accesories, seems something respondents might naturally be expsoed to on their personal Instagram. Respondents should thus be able to identify with the picture and the advertised product, which is crucial in order to measure people’s purchase intention and brand attitude. In order to make the mock-up post more realistic, a small text was added to the instagram post. Based on real Instagram posts, this text included the product’s brand name (1:#Ray- Ban, 2: #Gucci, 3: #Cazal, 4: #Jason Wu), some positive emotion (“Love my new

sunglasses“, #sunnydays), the hastag #sponsored, as well as a positive recommendation message related to the product (“They look super classy and perfectly protect my eyes against the bright sunshine at #Malibu Beach“). Brand awareness was measured by

(15)

exposing participants to four different brand names that vary in their degree of publicity. The popular brands Gucci and Rayban were chosen as “high brand awareness” products, while the widely unknown brands Cazal and Jason Wu were chosen to represent the “low brand awareness condition”. Brands were looked up in various online shops which are specialized in distributing (sun-) glasses. To manipulate the independent variable and make a distinction between direct-monetary and indirect-monetary compensation, the recommendation post in Group 1 and 3 contained the comment “This post was paid by the organization“, while the post in Group 2 and 4 contained the comment “This recommendation is based on a product trial“.

Measures

Brand awareness. Participants’ brand awareness was measured by two questions on a 7-point Likert scale (1 = Strongly disagree, 7 = Strongly agree). Questions were based on existing research by Lu et al. (2014) and were as follows: “I know this brand“ and “When it comes to sunglasses, I can immediately recall this brand“. Reliability analysis shows that the scales are highly reliable (Chronbach’s alpha = .92).

Brand attitude. In order to measure participant’s brand attitude, they were asked the question “How do you feel about the advertised brand?“. Based on research by Spears and Singh (2004), six 7-point semantic differentials were given as answer options: Unappealing/Appealing, Unpleasant/Pleasant, Boring/Interesting, Dislike/Like, Negative/Positive, and Bad/Good. Reliability analysis shows high reliability (Chronbach’s alpha = .96).

Purchase intention. Participant’s purchase intention was assesed by asking them to answer the following five statements: “I would consider buying this product“, “I have no intention to buy this product“, “It is possible that I would buy this product“, “I will purchase (brand) next time I need sunglasses“ and “If I am in need, I would buy these sunglasses“ (Lu et al., 2014). Participants had to answer on a 7-point Likert scale, ranging from 1 = Strongly disagree to 7 = Strongly agree. Reliability analysis shows that the scales are highly reliable

(16)

Manipulation checks

In order to ensure that the experimental manipulation worked, two manipulation checks were inserted. For sponsorship type, participants were asked whether they remember that the post was labeled as sponsored content. Disagreement or agreement was measured on a 7-point Likert scale (1= Strongly disagree, 7= Strongly agree). Manipulation success was measured by an independent samples T-test. In general, most respondents categorized the Instagram post as sponsored content (M = 5.92, SD = 1.15). Consequently, no significant difference could be found between the product trial condition (groups 1 and 3) and the paid product placement condition (groups 2 and 4). Participants in the paid product placement condition (M = 6.1, SD = .75) were not more likely to perceive the content as sponsored content than participants in the product trial condition (M = 5.75, SD = 1.42). Thus, it can be concluded that manipulation was not succesful.

Brand awareness was tested by asking whether participants remember that a brand name was inserted in the recommendation post (“I remember seeing a brand name“). The answer scale ranged from 1= Strongly disagree to 7= Strongly agree. Consequently, respondents were asked to indicate the brand name that was stated below the post. Respondents that were not able to indicate the brand name, were excluded from the

analysis. Most participants (N = 121) however, were able to indicate the correct brand name (M = 5.57, SD = 1.23). It can hence, be assumed that the manipulation succeeded.

Randomization checks

To check whether participants show similar demographic characteristics across conditions, a randomization check was conducted. Concerning gender and education, it appears that men and women, as well as educational levels are equally spread across conditions, as no significant differences could be found for either gender (X² (3) = 5.58, p = .13) or level of education (X² (12) = 15.96, p = .19). However, a one- way ANOVA revealed that there were significant differences in the respondents‘ age distribution across groups, F(3,138) = 4.87, p = .003. A post hoc test was run to investigate which groups differ in participant age, revealing that there was a significant difference between condition 1 (M =

(17)

25.42, SD = 3.62) and 3 (M = 23.24, SD = 2.5), p = .016, as well as condition 3 (M = 23.24, SD = 2.5) and 4 (M = 25.75, SD = 3.2), p = .004. No significant difference between groups

was found concerning participants‘ frequency of Instagram use, X² (12) = 16.65, p = .163 or the activities they perform on the social media platform, X² (6) = 8.67, p = .193.

Questionnaire

The questionnaire was divided into four parts, starting with a short introduction to the purpose of the experiment and some questions about the participant’s demographics, such as age, gender, nationality, educational background and social media use. Next, participants were shortly introduced to “hellosunshine“, the influencer who posted the

recommendation post. In the third part, participants were exposed to one of the four versions of the recommendation post and asked to answer several questions in order to assess their brand attitude, purchase intention and brand awareness. The last part consisted in the manipulation checks and a short debriefing (see apendix).

Results

Main and interaction effects

Since randomization checks showed that participant age significantly differed between groups, ANCOVAS were conducted before starting the hypothesis testing, in order to check whether participant age has an impact on the relationship between sponsorship type and brand attitude, as well as sponsorship type and purchase intention. The ANCOVAS revealed that this is not the case. Participant age did not influence participants’ brand

attitude, F(3, 117) = .14, p = .708, or purchase intention, F(3, 117) = .46, p = .502.

Brand attitude. A one- way analysis of variance was carried out to assess the impact of a recommendation post’s sponsorship type on an individual‘s brand attitude. The ANOVA revealed a weak, but significant effect of sponsorship type on brand attitude, F(3, 117) = 15.13, p < .001, η2 = .28. However, a post-hoc test indicated that the only significant

(18)

difference found was that between participants in the “high brand awareness“ conditions (group 1 and 2) and the “low brand awareness“ conditions (group 3 and 4). Participants exposed to a directly compensated post including a well-known brand significantly differed from participants exposed to a directly compensated post including a less-known brand (Mdifference = 1.6, p <.001) and participants exposed to an indirectly compensated post including a less-known brand (Mdifference = 1.25, p <.001). Moreover, participants exposed to an indirectly compensated post including a well-known brand significantly differed from participants exposed to a directly compensated post including a less-known brand

(Mdifference = 1.2, p <.001) and participants exposed to an indirectly compensated post including a less-known brand (Mdifference = .84, p = .008). No significant difference between participants who were exposed to directly compensated posts and participants exposed to indirectly compensated posts was established (see table 2).

Table 2. Brand attitude scores across groups (ranging from 1 = negative brand attitude to 7 = positive brand

attitude M SD Group 1 5.5 .77 Group 2 5.1 1.27 Group 3 3.9 .96 Group 4 4.26 1.02

Purchase intention. A one- way analysis of variance was carried out to assess the impact of a recommendation post’s sponsorship type on an individual‘s purchase

intention. The ANOVA revealed a weak, but significant effect of sponsorship type on purchase intention, F(3, 117) = 5.7, p < .001, η2 = .13. However, a post hoc test indicated that variation in purchase intention scores is not based on sponsorship type, as participants who were exposed to a directly compensated post including a well-known brand significantly differ from participants exposed to a directly compensated post including a less-known brand (Mdifference = 1.14, p = .001) and participants exposed to an indirectly compensated post

(19)

including a less-known brand (Mdifference = .91, p = .012). No significant difference between participants who were exposed to directly compensated posts and participants exposed to indirectly compensated posts was established (see table 3).

Table 3. Purchase intention scores across all four groups (ranging from 1 = low purchase intention to 7 = high

purchase intention) M SD Group 1 4.6 1.09 Group 2 4.1 1.53 Group 3 3.46 .81 Group 4 3.7 .88 Moderation analysis

Since a main effect between sponsorship type and brand attitude, as well as

sponsorship type and purchase intention, could not be established, moderation analysis was not carried out.

Conclusion and discussion

This research aimed to investigate the effects of sponsorship type on consumers’ brand attitude and purchase intention. When interpreting the results obtained by the study at hand, it is important to bear in mind that the manipulation used in the experiment was not successful and all hypotheses hence need to be rejected. Since all participants classified the post as sponsored content, regardless of their experimental condition and participants in the paid product placement condition were not more likely to experience the presented content as sponsored content than participants in the product trial condition, treatment success cannot be assumed. This can have several reasons.

First, individuals might not distinguish between sponsorship types being direct-monetary or indirect-direct-monetary, but instead evaluate sponsorship on a broader level, only considering its absence or presence. Previous research suggests that sponsorship

(20)

disclosure decreases brand attitude and purchase intention, as a consumer’s persuasion knowledge is activated when sponsorship is revealed (Friestad & Wright, 1994; Campbell et al., 2013). For the persuasion knowledge to be activated, it might not be relevant whether sponsorship is based on a direct-monetary relationship or an indirect-monetary one. This argumentation is in line with results provided by previous research, which argues that a consumer‘s attitude towards an advertisement, a concept closely tied to a consumer’s brand attitude, does not depend on the type of relationship between sponsor and blogger (Lu et al., 2014; Hwang and Jeong, 2016). Consistently with the study at hand, Lu et al. (2014)

concluded that consumers do not hold more favorable attitudes towards advertisements that are sponsored by indirect-monetary compensation compared to recommendation posts rewarded by direct-monetary compensation, as long as sponsorship is revealed. The results provided by this study hence, support the idea that recommendation posts that reveal sponsorship and highlight honesty are perceived as honest and altruistic irrespective of the nature of compensation (Hwang and Jeong, 2016). This idea is supported by the fact that the condition provoking the most positive responses, as well as the one provoking the most negative responses, both were displaying a recommendation post with direct-monetary compensation.

However, while the results at hand coincide with some previous research, they are conflicting with others arguing that indirect-monetary sponsorship is perceived as more acceptable and thus leads to more positive consumer responses (Hsu, 2010, in Lu et al. 2014; Fu, 2010, in Lu et al. 2014). These researchers suggest that recommendation posts compensated by direct-monetary incentives are perceived as a marketing activity, which provokes negative behavioral intentions toward the product (Uribe et al., 2016).

Recommendation posts rewarded by direct-monetary compensation are thus thought to be perceived as “bought content”, leading to downgraded source credibility and consequently a more negative brand attitude and lower purchase intention (Lee and Koo, 2012, in Lu et al., 2014). These conclusions could not be supported by the results presented in the study at hand, as recommendation posts provoked similar consumer responses. It is possible that,

(21)

the relationship between the sponsor and the blogger remained unclear or unnoticeable, as it was only indicated by a short statement. In order to make a clearer distinction between sponsorship types, it might be advisable to include a more detailed explanation of the nature of compensation. This might be especially important, when the advertised product is one that is rarely used in product trials. Trying sunglasses during a holiday or summer period might be perceived the same as owning them, as it is a product that cannot be “consumed”.

Second, another explanation for failed manipulation might be anchored in the experimental design. In order to test a possible moderation effect, brand awareness was used as an additional variable. However, results suggest that participants may have

concentrated more on the brand displayed in the recommendation post than the sponsorship type, as brand attitude and purchase intention were generally higher in the high brand

awareness conditions irrespective of sponsorship type. Thus, it can be assumed that brand awareness directly impacts consumer brand attitude and purchase intention, with well-known brands being evaluated more positively than less-known ones. These implications are

consistent with previous research that argues that brand awareness improves trust in a brand and its advertisement (Lu et al., 2014; Smith & Wheeler, 2002; McDonald & Sharp, 2000; Smith & Wheeler, 2002) due to more positive consumer attitudes towards the sponsor and the sponsored recommendation post (Wang et al., 2002). This idea is supported by the fact that the best performing condition in this study was one displaying a well-known brand, while the worst performing one, was a condition displaying a less-known brand.

Limitations and suggestion for future research

The study at hand is not without limitations. First, it should be mentioned that statistical power is limited due to a small sample size (N= 121), which is just above the recommended sample size (van Voorhis & Morgan, 2007). Thus, it cannot be assured that the results provided are indeed reliable. When interpreting the results of this study it should be kept in mind that sample characteristics might not adequatly resemble general population characteristics regarding important demographic attributes, such as age, education and

(22)

gender. Participants in the present sample were young adults, highly educated and mostly female. This uneven distribution of participant gender, as well as the similarity in participant characteristics might downgrade population validity, which in turn, makes it hard to

generalize the results. Furthermore, the chosen sample might not match with the actual target group which influencers on Instagram intent to reach. Participants in the present study were around 25 years old (M = 24.73). However, statistics show that in 2018 the most active group on Instagram was women between 18 and 24 (Statista.com). Thus, this study should be resembled using a larger sample size and targeting younger participants, while other participant characteristics should be kept as diverse as possible.

Two important limitations based on the experimental setting should be mentioned as well. In the “real” world people are expoed to recommendation posts when scrolling through their personal Instagram feed. However, in this study participants were exposed to an isolated mock- up post, set up by a fictious influencer they do not know. There was no proper, natural context and participants did not have any emotional relationship with the influencer. Since relationship- building and trust are crucial concepts for sponsored content to be succesful (Kudeshia & Kumar, 2017), making up an influencer might have negatively influenced the results. Based on these aspects, it can be concluded that ecological validity is rather low hindering generalization to real life situations. Beside influencer choice, product choice might also have been questionable. Though sunglasses are an everyday product that is used extensively by men and women and across all age groups, it might not be the typical product that companies would give away for a product trial. The product trial conditions might hence, not have been realistic. Future studies should better incorporate products that have more unique attributes and are actually “used” or consumed by the influencer, such as sports equipment, beauty accesories or electronic products. In this sense, it might be very

interesting to compare product types, such as tangible/ search goods (e.g. sports shoes) and intangible/ experience goods (e.g. an organized trip). When comparing different product types, different industries could also be taken into consideration. For example, it might be

(23)

interesting to see whether sponsorship works the same way in the tourism industry as it does in the fashion industry.

Theoretical and practical implications

Theoretically, this study contributes to the current knowledge in several ways. By integrating sponsorship type with consumer responses, such as brand attitude and purchase intention, the study yields insights into explaining consumer reactions toward sponsorship disclosure. Though all hypotheses had to be rejected, this study suggests that consumers do not establish attitudes or behavioral intentions based on the compensation an influencer receives. Thus, this study provides support for the idea that consumers do not judge

sponsorship types differently but more probably, only distinguish between sponsored and un-sponsored content.

From a marketing perspective, building alliances with influencers in order to

distribute positive brand messages and endorse products is a growing activity, as it provides easy, cheap and targeted access to a broad audience (Scott, 2015; De Veirman et al., 2017). This study shows that influencer marketing is especially beneficial when employed by known brands. Due to high brand awareness, recommendation posts sponsored by well-known brands are perceived more positively by consumers and hence, stimulate a more positive brand attitude and a higher purchase intention compared to posts employed by less-known brands. Well-less-known brands should thus, invest in cooperations with influencers and add this technique to their marketing mix in order to stimulate purchases. Less-known brands are well advised to first build brand awareness through traditional marketing campaigns before launching sponsored content. Once a decent level of brand awareness is reached, traditional marketing might be supplemented by influencer marketing.

When deciding on a compensation type, organizations are free to choose, as this study has shown that direct-monetary compensation does not result in negative consumer responses like suggested by previous research (Hsu, 2010, in Lu et al. 2014; Fu, 2010, in Lu et al. 2014). Since paid product placement (compared to a product trial) might give

(24)

organizations more control over the recommendation outcome, marketers can better choose this option in order to avoid a negative post based on a product trial that did not succeed in convincing the influencer that the product is worth a positive recommendation.

References

Becker- Olsen, K. (2003). And Now, A Word from our Sponsor: A Look at the Effects of Sponsored Content and Banner Advertising. Journal of Advertising, 32(2), 17- 32.

Boerman, S. C., van Reijmersdal, E. A., & Neijens, P. C. (2012). Sponsorship disclosure: effects of duration on persuasion knowledge and brand responses. Journal of Communication, 62, 1047-1064. doi: 10.1111/j.1460-2466.2012.01677.x Boerman, S. C., Willemsen, L. M., & Van Der Aa, E. P. (2017). “This Post Is Sponsored”: Effects of Sponsorship Disclosure on Persuasion Knowledge and Electronic Word of Mouth in the Context of Facebook. Journal of Interactive Marketing, 38, 82-92. doi: 10.1016/j.intmar.2016.12.002

Cain, R. M. (2011). Embedded advertising on television: Disclosure, deception, and free speech rights. Journal of Public Policy & Marketing, 30, 226-238.

doi:10.1509/ jppm.30.2.226

Campbell, M. C., Mohr, G. S., & Verlegh, P. W. J. (2013). Can disclosures lead consumers to resist covert persuasion? The important roles of disclosure timing and type of response. Journal of Consumer Psychology, 23, 483-495. doi:

10.1016/j.jcps.2012.10.012

Carr, C.T., & Hayes, R.A. (2014). The effect of disclosure of third- party influence on an opinion leader's credibility and electronic word of mouth in two-step flow. Journal of Interactive Advertising, 14(1), 38-50. doi:

10.1080/15252019.2014.909296

Evans, N.J., Phua, J., Lim, J., & Jun, H. (2017). Disclosing Instagram influencer advertising: The effects of disclosure language on advertising recognition, attitudes, and behavioral intent. Journal of Interactive Advertising, 0(0), 1-12. doi:

10.1080/15252019.2017.1366885

Federal Trade Commission (2013). Blurred Lines: Advertising or Content? An FTC

Workshop on Native Advertising. Retrieved from https://www.ftc.gov/news- events/events-calendar/2013/12/ blurred-lines-advertising-or-content-ftc- workshop-native.

Friestad, M., & Wright, P. (1994). The persuasion knowledge model. How people cope with persuasion attempts. Journal of Consumer Research, 21(1), 1-31.

Hansen, T., Jensen, J. M., & Solgaard, H. S. (2004). Predicting online grocery buying intention: a comparison of the theory of reasoned action and the theory of planned behavior. International Journal of Information Management, 24(6), 539-550. doi: 10.1016/j.ijinfomgt.2004.08.004

Ho, C., Chiu, K., Chen, H., & Papazafeiropoulou, A. (2015). Can internet blogs be used as an effective advertising tool? The role of product blog type and brand awareness. Journal of Enterprise Information Management, 28(3), 346- 362. doi: 10.1108/

(25)

JEIM-03-2014-0021

Hong, S. and Park, H.S. (2012), “Computer-mediated persuasion in online reviews: statistical versus narrative evidence”, Computers in Human Behavior, 28 (3), 906-919. doi: 10.1016/j.chb.2011.12.011

Hwang, Y., & Jeong, S.-H. (2016). “This is a sponsored blog post, but all opinions are my own”: The effects of sponsorship disclosure on responses to sponsored blog posts. Computers in Human Behavior, 62, 528-535. doi:

10.1016/j.chb.2016.04.026

Johansen, I., & Guldvik, C. (2017). Influencer Marketing and Purchase Intentions. How does influencer marketing affect purchase intentions? Master’s Thesis. Norwegian School of Economics, Bergen, Norway.

Keller, K. (1993). Conceptualizing, Measuring, and Managing Customer-Based Brand Equity. Journal of Marketing, 57(1),1-22.

Kudeshia, C., & Kumar, A. (2017). Social eWOM: does it affect the brand attitude and purchase intention of brands? Management Research Review, 40 (3), 310- 330. doi: 2443/10.1108/MRR-07-2015-0161

Langaro, D., Rita, P., & de Fátima Salgueiro, M. (2018). Do social networking sites contribute for building brands? Evaluating the impact of users' participation on brand awareness and brand attitude. Journal of Marketing Communications, 24(2), 146- 168. doi: 2443/10.1080/13527266.2015.1036100

Liljander, V., Gummerus, J., & Söderlund, M. (2015). Young consumers’ responses to suspected covert and overt blog marketing. Internet Research, 25, 610-632. doi:10.1108/IntR- 02-2014-0041

Lu, L., Chang, W., & Chang, H. (2014). Consumer attitudes toward blogger’s sponsored recommendations and purchase intention: The effect of sponsorship type, product type, and brand awareness. Computers in Human Behavior, 34, 258- 266.

McDonald, E., & Sharp, B. (2000). Brand Awareness Effects on Consumer Decision Making for a Common, Repeat Purchase Product: A Replication. Journal of Business Research 48, 5–15. doi: 10.1016/S0148-2963(98)00070-8

Reijmersdaal van, E., Fransen, M., Noort van, G., Opree, S., Vandeberg, L., Reusch, S., Lieshout van, F., & Boerman, S. (2016). Effects of Disclosing Sponsored Content in Blogs: How the Use of Resistance Strategies Mediates Effects on Persuasion. American Behavioral Scientist, 60(12), 1458- 1474. doi:

0.1177/0002764216660141

Reijmersdal van, E. A., Lammers, N., Rozendaal, E., & Buijzen, M. (2015). Disclosing the persuasive nature of advergames: moderation effects of mood on brand

responses via persuasion knowledge. International Journal of Advertising, 34(1), 70-84. doi: 10.1080/02650487.2014.993795

Sasmita, J., & Suki, N. (2015). Young consumers’ insights on brand equity. International Journal of Retail and Distribution Management, 43(3), 276- 292. doi: 10.1108/IJRDM-02-2014-0024

Schivinski, B. and Dabrowski, D. (2014), “The effect of social media communication on consumer perceptions of brands”, Journal of Marketing Communications, 9 (1), 1-26. doi: 10.1080/13527266.2013.871323

Smith, S., & Wheeler, J. (2002). Managing the customer experience: Turning customers into advocates. London: Pearson Education.

(26)

intentions. Journal of Current Issues & Research in Advertising, 26(2), 53-66. doi: 10.1080/10641734.2004.10505164

Statista (2018, June 13). Instagram: global user age and gender distribution 2018. Retrieved from: https://www.statista.com/statistics/248769/age-distribution-of-worldwide- instagram-users/

Sweetser, K., Ahn, S., Golan, G., & Hochman, A. (2016). Native advertising as a new public relations tactic. American Behavioral Scientist, 60(12), 1442- 1457. doi: 0.1177/0002764216660138

Uribe, R., Buzeta, C., & Velasquez, M. (2016). Sidedness, commercial intent and expertise in blog advertising. Journal of Business Research, 69(10), 4403- 4410. doi: 10.1016/j.jbusres.2016.04.102

Veirman de, M., Cauberghe, V., & Hudders, L. (2016). Marketing through Instagram influencers: the impact of number of followers and product divergence on brand attitude. International Journal of Advertising, 36(5), 798- 828. Voorhis van, C., & Morgan, B. (2007). Understanding power and rules of thumb for

determining sample sizes. Tutorials in Quantitative Methods for Psychology, 3(2), 43-50.

Wang, A., & Lin, C. (2011). Effects of content class with endorsement and information relevancy on purchase intention. Management Research Review, 34(4), 417- 435. doi: 10.1108/01409171111117861

Wang, C., Zhang, P., Choi, R., & Eredita, M. (2002). Understanding consumers attitude toward advertising. Eighth Americas Conference on Information Systems. Wei, M., Fischer, E., & Main, K. J. (2008). An examination of the effects of activating persuasion knowledge on consumer response to brands engaging in covert marketing. Journal of Public Policy & Marketing, 27(1), 34-44. doi:

10.1509/jppm.27.1.34

Apendix

(27)

Condition 1: High brand awareness x Direct monetary compensation

(28)

Condition 3: Low brand awareness x direct monetary compensation

Condition 4: Low brand awareness x indirect monetary compensation

(29)

Q8 In order to get to know more about the participants contributing to this study, I would like you to answer some questions about yourself.

Q10 Please indicate your gender

o

Male (1)

o

Female (2)

o

Non- binary (3)

Q12 Please indicate your age in numbers

________________________________________________________________

Q14 In which country have you lived the longest time of your life? ▼ Afghanistan (1) ... Zimbabwe (1357)

Q16 Which is the highest level of education you have completed? ▼ Less than high school degree (1) ... PhD (5)

End of Block: Demographics Start of Block: Instagram use

(30)

Q18 Do you have an Instagram account?

o

Yes (1)

o

No (2)

Q20 How frequently do you use your Instagram account?

o

More than once a day (1)

o

About once a day (2)

o

A few times a week (3)

o

A few times a month (4)

o

Less than a few times a month (5)

Q22 For which activities do you use your Instagram account?

o

Following other people (1)

o

Posting about myself (2)

o

Both (3)

End of Block: Instagram use Start of Block: Condition 1

Q24 In the following you will see an Instagram post by „Hellosunshine“, a young women who regularly posts about her experiences on Instagram. Please have a look at the picture and the text below before clicking to the next page, as you will be asked to answer questions regarding your impressions.

(31)

Q25

End of Block: Condition 1 Start of Block: Condition 2

(32)

Q26

(33)

Q28

(34)

Q31

End of Block: Condition 4

Start of Block: Dependent measures

Q14 You were just exposed to an Instagram post published by the influencer „Hellosunshine“. When answering the following statements, please take the picture and the text you saw in the post into account.

(35)

Q16 Please answer the statements presented below. Strongly disagree (1) Disagree (2) Somewhat disagree (3) Neither agree nor disagree (4) Somewhat agree (5) Agree (6) Strongly agree (7) I know the advertised brand (1)

o

When it comes to sunglasses, I can immediately recall this brand (2)

o

Page Break

(36)

Q18 Please indicate how you feel about the brand you saw in the Instagram post. 1 (1) 2 (2) 3 (3) 4 (4) 5 (5) 6 (6) 7 (7) Unappealing

o

Appealing Unpleasant

o

Pleasant Boring

o

Interesting Dislike

o

Like Negative

o

Positive Bad

o

Good Page Break

(37)

Q20 Please answer the statements presented below. Strongly disagree (1) Disagree (2) Somewhat disagree (3) Neither agree nor disagree (4) Somewhat agree (5) Agree (6) Strongly agree (7) I would consider buying this product (1)

o

I have no intention to buy this product (2)

o

It is possible that I would buy this product (3)

o

I will purchase the advertised brand next time I need sunglasses (4)

o

If I am in need, I would buy these sunglasses (5)

o

Page Break

(38)

Q22 Please answer three more questions in order to complete the survey. Strongly disagree (1) Disagree (2) Somewhat disagree (3) Neither agree nor disagree (4) Somewhat agree (5) Agree (6) Strongly agree (7) The Instagram post was labelled as sponsored content (1)