Due to changing technology use habits, consumers are being confronted less and less
with traditional forms of advertising like TV commercials and newspaper advertisements. To
be seen by consumers, brands have had to adapt and follow them to where they are getting
their information and entertainment. One of the biggest moves in recent times is to
advertising on social media. While social media has many benefits for brands, such as direct
connections with consumers, social media platforms also give consumers the right to choose
who they follow and what content they see. When a brand is not able to reach all of the
consumers it wants to naturally, with its own content, an influencer may be employed to help.
“Influencer marketing” is a relatively new form of native advertising, where an “influencer”
(a social media user with a large, engaged following) is paid to post on social media with or
about a brand or products. Influencer marketing is especially popular on Instagram. Seen as a
paid brand endorsement, this type of advertising has gained attention from the Federal Trade
Commission for its potential to deceive consumers. The FTC in recent years has updated its
endorsement guides to reflect best practices for paid online and social media endorsements,
and has brought cases against companies who have not followed their rules. This raises the
question of if and how consumers recognize influencer marketing, and what effect, if any,
unethical disclosure practices have on consumers’ brand attitudes and the value they get out
of paid brand endorsements. This study looks at two factors for recognizing influencer
marketing on Instagram, Instagram use and disclosure types, and the effects of unethical
disclosure practices on brand attitudes of H&M and consumer’s perceived value of the
advertisements. The study found that Instagram use and ambiguous disclosures can impact
recognition of influencer marketing, but unethical disclosure practices may not have an effect
on brand attitudes and advertising value
