While the dramatic rise of online shopping and e-commerce has made the internet the world’s marketplace, the rise of social media has also given it vast reach as a communication channel. So unsurprisingly social media has become a magnet for marketing and advertising.
One of the fastest growing facets of social media marketing is the use of paid endorsers — a fashion blogger, for example, paid by a fashion designer to post a picture of herself wearing one of the designer’s pairs of earrings.
New research from marketing professor Christophe Van den Bulte and Phd Student Jing Peng from the Wharton School of the University of Pennsylvania reveals the potential benefits and pitfalls of using paid social media endorsers. The research notably revealed that paid endorsers are either eager to participate or very effective — but rarely both.
The researchers conducted a field experiment, based on a micro-blogger site in China, in order to explore the success factors behind participation (getting more endorsers to pick up the task and the level of engagement) and effectiveness (the success of endorsers in getting their followers to engage) — they categorized engagement as low effort, such as a simple like, or greater effort, such as commenting and retweeting.
A core finding of the research was that endorsers who frequently participated in tasks (who frequently retweeted and commented) were less effective, while endorsers who were more effective were less likely to participate.
Another finding was that offering a higher-than-normal financial incentive did not increase the number of participants.
The categories (high participation or high effectiveness) into which the endorsers fell depended on certain characteristics:
- Previous participation: Endorsers who had participated in a large number of previous campaigns were more likely to participate in a new campaign. However, because those endorsers were less selective about which products they endorsed, they were also, as a result, less trusted by their followers — and thus less effective. Participants who in the past had been more selective about which product they endorsed would be less likely to participate in the test campaign — but more effective if they did.
- Presence: An endorser who had been on the site longer was less likely to participate; those bloggers, however, were more effective because their long presence had built up trust.
- Number of followers: Endorsers with large numbers of followers were also less likely to participate, and although they were only effective in getting followers to engage at a lower level of engagement (such as likes). Endorsers with smaller numbers of followers were more effective in generating a higher level of engagement. The reason is that endorsers with smaller numbers had stronger ties to their followers, who were then more motivated to retweet or comment.
Marketers need to be aware that very few endorsers are going to be both high in participation and effectiveness. Therefore, to improve results from paid endorsements, companies need to:
- Attract the more effective endorsers who are not responding.
- Improve the more participative endorsers who are less effective.
To raise the participation rate of the less responsive but more effective endorsers companies should ensure that their marketing material will not hurt the reputations of the endorsers and should give them a reason to select your campaign. For example, carefully design your ads so that they look like organic tweets and not endorsed retweets. Also consider offering tasks exclusively to endorsers who fit the high effectiveness profile (number of friends, length of presence).
To improve the effectiveness of responsive endorsers (endorsers who comment and tweet frequently), companies can set requirements for payment — for example, the number of words and emojis in retweets and a minimum number of people to be mentioned while retweeting.
Markets should also be aware that the effects of participation and effectiveness can be hidden — an endorser may boast about a high effectiveness, but that is only because he or she may be participating in a much greater number of campaigns. Absolute numbers can be misleading.
Read the research paper here: Participation Vs. Effectiveness of Paid Endorsers in Social Advertising Campaigns: A Field Experiment. Jing Peng & Christophe Van den Bulte. SSRN Working Paper (January 2016).