IS INFLUENCER MARKETING THE DEFINING PATH TO ORGANIZATIONS’ SUCCESS OR JUST A TEMPORARY TREND?

The main research topic of this paper is centered on the following question: “How does influencer marketing on social media affect brand loyalty, is it the defining path to Organizations’ success or just a temporal trend?”. This question not only serves as a key point for exploring the effectiveness of influencer marketing but also underpins the purpose of this study which is to examine the usage of influencers from organizations, with an emphasis on how it changes consumer behavior and brand loyalty. The research seeks to present why organizations opt for this marketing technique and how it impacts the perception and behaviors of consumers which can gain their trust towards the brand. The question is two-sided and aims to explore whether influencer marketing is just an ongoing trend to which businesses tend to rely, or is it truly a tool that can lead to great success.

Sub-questions

To better investigate the topic, I have listed several sub-questions that will be examined throughout this study with the ultimate purpose of exploring the background of the connection of influencer marketing, consumer behavior, and brand loyalty:

• What is influencer marketing?
• What is brand loyalty and how is it connected to influencer marketing?
• Why is brand loyalty important for businesses and how does it benefit them?
• What are the main reasons influencer marketing is used?
• What are the benefits of using influencer marketing for building brand loyalty?
• Is influencer marketing a good strategy fit for every organization?
• What are the risks of implementing influencer marketing in an organization's marketing strategy?

By evaluating several sources in different media channels, I aim to present an accurate opinion on the research topic and make a clear overview of the insights I have examined regarding the previously outlined questions.

Background

Nowadays, people are dependent on social media as our society is becoming highly technologically advanced. According to statistics for July 2023, around 59.9% of the world's population is present on social media platforms. This fact shows that there is an increase in the number of users in comparison to previous years (Internet and Social Media Users in the World 2023 | Statista, 2023).

With the significant development of social media platforms, marketers have started to shift their view from using traditional media tools such as television, newspapers, and billboards to digital media including the fast-growing segment of influencers who tend to develop greater attention by marketers. This transition is being driven by several causes, including technological improvements, changing consumer behavior, and the necessity for businesses to adapt to the digital world.  Digital marketing itself enables companies to deliver more personalized content and therefore to connect with their audience on a higher level. Bearing in mind the fact that a major part of the population has access to smartphones and computers it is becoming increasingly difficult not to use the Internet and be influenced by the content to which people are exposed (IMM Institute, 2023).

Recently, influencer marketing has increased its popularity and usage due to being a powerful tool for business growth and success. Many brands and companies utilize this strategy to increase their brand awareness and become popular in the market. Influencers are used for building trust and credibility by which organizations build on their brand loyalty and reputation (Cohen, 2023). As influencers attain authority among their target audiences, they are likely to impact the purchasing choices of their followers. In this way, influencers can not only be perceived as a valuable source for people but also be able to introduce new products and services and help start-up marketers gain visibility.

On the other hand, this marketing tool could also be sensitive for business owners and not always be a successful method for all types of businesses. Sometimes using influencer marketing can hide great risks as once you start using it, your brand is associated with the fact you use influencers and there is a chance you lose control over your brand image.

Many studies have investigated the advantages of influencer marketing on organizations' development and brand awareness such as the research from Agustian et al. (2023), which examined how influencers affect the growth of small and medium-sized enterprises by pointing out most of the advantages this marketing technique has. Another research from İnal and Bil (2023), looked further into the effects of influencer marketing on consumer behavior, however, there are not many articles examining the relationship between influencer marketing and brand loyalty and whether this marketing tool leads to success at all matters. As this topic is quite relevant for business owners and marketers who are considering whether to use influencer marketing, I am positive that this research will help them understand better, what they should look into when it comes to choosing techniques for their marketing strategies.

Whether this technique is truly successful and what are the main drivers that make influencers become a reliable source for customers when it comes to making purchase decisions regarding products or services are some of the questions that this research study is going to cover. Having those questions in mind, I plan to dive deep into the field of influencer marketing and gain insights into how it reflects the reputation of a brand and how it is used in the process of building strong brand loyalty.

Literature review

Brand loyalty and trust

According to a recent study from SendPulse (n.d), brand loyalty is a commitment to a specific brand, service, or product that often leads to a repeat purchase based on the customer’s impression of providing higher quality than competitors. As brand loyalty is a reflection of customers’ behavior it has great significance for marketers nowadays as they focus all their ideas and resources on delivering high customer experience. Brand loyalty is based on the experience customers have with a certain organization and does not reflect the price of the product. One of the main factors for which brand loyalty is considered to be important is the fact that it is seen as highly efficient in the long-term success of the organization. It is a perception-based indicator that is built on trust for which reason businesses spend years cultivating their reputation over competitors. Clients who have been positively influenced by a brand are most likely to get back to it and make a purchase of a certain product even at a higher cost (What Is Brand Loyalty: Complete Guide | SendPulse, n.d.).

Nevertheless, brand loyalty is a factor that all companies prioritize due to the benefits it leads to. According to Forsta & Forsta (2023), an important advantage of maintaining strong brand loyalty is the fact it accelerates brand recognition which nowadays is a key indicator of a brand that strives to stand out in the competitive market world. Not only does it increase the awareness of a certain company, but it also can reflect in a positive way its profit. Business owners consider their work as beneficial when they start to see the attention rise in their products and services.  

Establishing a deeper relationship with a business's clients is one of the main reasons why brand loyalty is seen as effective. People associate companies with positive and negative emotions depending on their experience they had; hence businesses try to stand out from other competitors by creating a meaningful connection (Forsta & Forsta, 2023).

Social media influencers

According to the research of Freberg et al. (2011), social media influencers are identified as third-party endorsers who are self-independent and impact audience opinions through the usage of social media tools. In her research, she claims that social media influencers have been perceived as an instrument that businesses can use to promote themselves and positively shape the opinions of people. Influencers are considered to have a persuasive power when they are connecting with the right audience (Freberg et al., 2011). Being an influencer is often associated with possessing authority and credibility among certain audiences which afterward helps them to build strong connections with their followers, thus increasing their influence on shaping people's opinions and thoughts over different aspects like purchasing intentions (Coursera, 2023). Business owners in the past often relied on popular figures such as celebrities, to promote their services on traditional media tools like television and radio advertisements. However, technological development, nowadays has led to the rise of using more influential individuals, hence the category in which influencers are distinguished is becoming broader. Examples of social media influencers nowadays can be presented by celebrities, politicians, and people who have a high number of followers on their social media accounts.  Those influencers help companies use influencer marketing intending to build brand loyalty (Sprout Social, 2023).

The reflection of Influencer marketing on Purchase intentions

According to Zong et al. (2023), purchase intention refers to the extent to which consumers are likely to buy products or services from a certain brand and is rooted in consumer psychology. Business professionals use this metric to evaluate the likelihood potential customers may have regarding a certain product. Consumer attitudes toward a given product or brand along with different external factors represent customers' purchase intention, which can be defined as a consumer's subjective predisposition to choose a specific product. It has also been demonstrated to be a significant predictor of customer behavior. Following this, it can be said that purchase intention is highly connected with the attitude of customers, therefore it can be reflected by behavioral change. Influencer marketing, on the other hand, is all about shaping attitudes, which in this sense is beneficial for influencing the purchase behavior of people. Studies have shown that social media activities reflect people’s behaviors. According to Shah et al. (2023), influencers' behavior is highly connected with how the purchase intention of consumers will be shaped. As an example, the study I have reviewed claims that an influencer who has a positive attitude toward a certain product is likely to influence people to buy it. The same goes for the other way around, if an influencer claims a product is not worth it, then it’s likely to impact people’s decision towards not buying it (Shah et al., 2023).

The main cause for the connection between purchase intention and influencer marketing is rooted in the emotional attachment that is being built between influencers and their target audience. When influencers communicate with their followers, they form a strong bond that results in engagement (Shah et al., 2023).

However, it is important to mention the consequence of this connection is not always entirely favorable. Influencers have the potential to shape attitudes for a wide range of emotions, including negative ones. While positive endorsements can help a brand's image, influencers can also be used to convey critique or negatively shape customer’s opinions. Sometimes influencers can be misleading, and not always work in favor of building the brand image of companies. According to a recent study, influencers have to be accountable for the brands they promote on social media as a majority of consumers—especially Gen Z—rely on their inputs to make a purchase, therefore they value the authenticity being presented (Chugh, 2023).

Influencer marketing and brand loyalty

As discussed in the previous chapter, influencers keep on receiving great attention with the rise of the technological era. In this sense, influencer marketing has become a mainstream form of online marketing to which companies adhere to promote themselves and gain brand recognition. However, the main question is: Why do companies choose this technique to build their brand loyalty?

To begin with, among some of the main reasons why brands tend to choose to start using influencer marketing is the fact it can build trust with their target audience. To be successful, organizations need first place to win the trust of their customers so they can choose it over competitors, no matter if the brand is increasing the prices of the products it offers, or whether a certain product doesn't get many reviews. Influencers such as celebrities, or those who have a wide range of followers have a lot of authority within their environment (COHEN, 2023).

Furthermore, using influencers can simply lead to establishing a deeper connection with the target audience. By sharing stories of their own, influencers can connect with people on a personal level, as they tend to relate to influencers who share common experiences and create an impression of familiarity. As influencers have the power to change people’s opinion and thought, building such a connection between them and their audience is a crucial aspect companies must bear in mind when choosing the type of influencers for their brand (LetsVeriFy, 2023).

According to COHEN (2023), another major point for which influencer marketing is becoming popular is the reason it leads to boosting brand awareness. As influencers are well-known figures among their audiences, they can easily enhance a brand and draw people's attention to a particular business as well as convince them that products are worth buying. Connecting with a brand that has strong brand recognition is more likely to foster customer brand loyalty, in comparison to a company that has just now been released and is acknowledged in the market.

Another reason why this practice is chosen by marketers over other strategies is because influencer marketing enables companies to connect with large audiences. The effectiveness of this approach depends on how big is the follower range in which the influencers occupy. The larger the niche in which they operate, the greater the potential for companies and organizations to expand their reach and build new connections with customers. When people connect with an influencer who is credible, they tend to connect on an emotional level, and are more likely to build a strong connection, thus also becoming loyal to a certain brand (Team & Team, 2023).

Key factors in influencer marketing for building brand loyalty

Using influencer marketing also has its specifics as to attain customer loyalty, influencers need to be trustworthy and authentic. According to Kofluence (2023), a key factor for building brand loyalty is presenting quality content as customers would feel closer to the brand when the content, they are exposed to is compelling and visually attractive. Nowadays, the social media audience tends to prefer high-quality and entertaining material that corresponds to their unique preferences.

The relevance of the influencer's niche to their audience influences trust and consumer loyalty, for which reason if an influencer specializes in the beauty industries, he needs to promote beauty products instead of technology, as in this way customers will see him as a credible representative.

Following on that, if a brand wants to build brand loyalty, it needs to ensure that the influencers it partners with, maintain consistency, as consumers often tend to lose interest if they are not in frequent contact with the influencer they follow (Kofluence, 2023).

Is influencer marketing always the right choice for brands?

In the previous chapter I have examined some of the reason why influencer marketing is considered to be effective for building brand loyalty, however like every marketing technique, it does not always lead to greater success and have inherent risks. According to a recent study from Chavan (n.d.), influencers could request additional prices permitting companies to use their content. Sometimes influencers can be unpredictable, which can also result in money lost for the brand if it is not prepared for the charges, they require regarding their usage. Following on that, using influencers as a marketing tool, is far from being a cost-efficient way as influencers who have high popularity come up with high costs for creating content.

There are various types of influencers and finding the one who aligns with your company could not always be an easy task. According to Chavan (n.d.), an example of misalignment between the company and the chosen influencer is the case of Scott Disick, who posted the brand's instructions as the caption of the post in one of the famous social media platforms, Instagram, resulting in criticism from the community and loss of trust. In contrast, the brand suffered reputational harm as a result.

(Chavan, n.d.)

In this sense, the organization that may want to implement influencer marketing may have to invest in searching for a credible influencer who would certainly present the brand positively and will not underestimate the task being given to him.

According to an article from Tobin (2019) at Forbes, a major issue that brands can face when working with influencer marketing is fake followers and likes numbers on their social media accounts. Nowadays, one influencer is considered to be successful most often when having a high number of audiences that follow him online. Brands later discovered that as the number of followers (genuine or false) grows, so does engagement. Therefore, if one has many followers but receives less interaction on his posts, the likelihood of fake or purchased followers is quite high. According to Statistica (2022), in 2022, the majority of Instagram mega-influencers with over one million followers were participating in fraudulent operations to inflate their engagement and follower counts. In 2022, mega-influencers engaging in fraud accounted for 58.19% of the total.

 (Statista, 2023)

Entering the digital era, it is becoming highly important for marketers to have their content marked as sponsored when it's being promoted by someone else. The term saturation rate is defined as the percentage of an influencer's overall content that is sponsored. Nonetheless, as more of what influencers share is sponsored, the amount of people engaging with their content decreases. Why? People follow influencers to get fresh ideas, learn new things, and stay up to date on what's hot. If everyone pays for everything influencers share, their capacity to influence fades faster than their aggregate audience numbers (Tobin, 2019).

Methods

The research has been conducted by using a combination of primary and secondary data sources presented by a literature review, interview with experts as well as case study analysis. I have used a triangulation method of research, as it contributes to the development of thorough research that presents insights from different perspectives. Furthermore, the triangulation approach serves as a quantitative guidance, presenting the study with an in-depth investigation of the impact of influencer marketing on brand loyalty. This method, which gathers data from several sources, confirms results and enables a more comprehensive and reliable understanding of the research paper topic. The triangulation approach is of great significance as enhances the reliability of the insights and helps for mapping out different opinions and interpretations (Triangulation, n.d.).

Case study analysis

After uncovering the basis of influencer marketing and its relationship with brand loyalty, I have decided to examine explore whether influencer marketing is always a successful technique for companies I have decided to explore a few cases where brands have decided to use this marketing technique in their strategy and explore what were the outcomes for their campaigns. Two case studies have been analyzed to present how influencer marketing is being implemented by brands and what are the positive and negative effects it has on brand loyalty during its implementation.

Case study 1: PepsiCo’s campaign: “Live for Now – Moments”

A few years ago, the company PepsiCo which is an American multinational food and beverage corporation, decided to collaborate with one of the world's most famous influencers Kendal Jenner to create an advertisement for the brand. On April 4, 2017, the company released its new campaign which attempted to present Pepsi as a millennial—friendly organization that is uniting people and is socially open to all people. The commercial featured Kendall Jenner, a 21-year-old supermodel, taking part in a photo shoot before "jumping in" with protestors marching down the street. A Pepsi musician is the first to stop his work and join the protest, followed by a headscarf-clad photographer and, finally, Jenner herself, after removing her wig and fancy clothes. At the end of the ad, Kendall approaches one cop with a can of Pepsi soda. Finally, the ad concludes with the line “Live bolder, live louder, live for now” (Team, 2023).

Why did it fail?

The message of the advertisements was focused on the idea that sharing a Pepsi might reduce tensions between protestors and police enforcement while presenting a diverse range of demonstrators to promote harmony and understanding. The commercial, however, received high criticism for its key social and political issues—especially the "Black Lives Matter" movement (Team, 2023).

According to Team (2023) critics accused the ad of co-opting protest movements for commercial gain, leading Pepsi to pull the advertisement off the air and internet less than 48 hours after its initial release. Immediate backlash followed by the release of the ad that was presented by tweets and posts from different celebrities and organizations:

(Team, 2023)

 (Team, 2023)

Some of the tweets referred to expressing sarcasm general dislike of the advertisements, and uneasiness connected with the topics and cast, but others went so far as to compare real-life protest situations to scenes shown in the commercial.

According to Pepper (2022) one of the main reasons why the campaign has failed is not enough research made in the market. In the source, it’s claimed that Pepsi needed to reach out to demonstrators and collect more data as well as social listening. Sharing the primer idea of the ad would have been beneficial to receive critical feedback before releasing it.

 (Pepper, 2022)

Another reason why the influencer marketing campaign was unsuccessful is the choice of celebrity. According to Pepper (2022), Kendel Jenner has never been involved in such social activism advertisements, which makes it quite surprising for the audience to perceive the message right. Celebrities should be aligned with a company's brand and marketing messages. Pepsi would have discovered that this influencer is not the best for this ad through market testing.

Last but not least, testing content before releasing it is seen as a major step for influencer marketing campaigns to be successful. When a company with a large audience range releases a relatively big campaign, it is worth testing the content, to receive feedback and analyze any existing gaps that could emerge (Pepper, 2022).

The backlash highlights the need for marketers to conduct thorough market research and reach out to consumers. A few days later, Pepsi released a short press release that claimed that the brand was trying to convey a global message of unity and peace and that it had missed a mark for which it apologized. Pepsi claimed that the company didn’t intend to attract attention and raise any serious issues. The company also apologized for putting Kendal Jenner in such a position in the following post:

(Team, 2023)

According to Team (2023), the brand also responded to a tweet from Bernice King, Dr. Martin Luther King Jr.'s youngest daughter. She captioned a photo of her father in the middle of a peaceful protest, "If only Daddy would have known about the power of #Pepsi:

 (Team, 2023)

Pepsi responded to the post by saying that the company did not intend to disrespect Dr. King or other people who are fighting for justice.

Overall, after all the backlash that Pepsi’s campaign gained, the ad was removed resulting in a serious loss of customers for Pepsi. After Pepsi made a response, Kendal Jenner also created an apology statement in which she said: “I would never purposely hurt someone ever. And I would if I knew this was going to be the outcome, like, I would have never done something like this” (Team, 2023). This case serves as a cautionary example emphasizing the critical role of thoughtful influencer marketing strategies in maintaining brand-consumer relationships as even if one incorrect step is taken, it can lead to negative consequences and very easily ruin the brand loyalty of the organization.

Case Study 2: Subaru’s “Meet an Owner” campaign

Subaru is a popular Japanese automotive manufacturer. Subaru is well-known for its emphasis on automobile manufacture and has created a significant foothold in the global automotive sector (History of Subaru | Subaru Middle East, n.d.).

Subaru has experienced high growth in recent years and influencer marketing has played an important part in this expansion. According to Rashida (2021), the "Meet an Owner" campaign was one of their most effective influencer marketing programs. The goal was to increase brand awareness and brand recognition. The campaign has been launched back in 2017. The campaign included Subaru’s collaboration with 20 influencers on the social media channels Instagram and YouTube.  Influencers produced user-generated content about Subaru vehicles and published distinct and intriguing postings. As a way to boost the campaign, Subaru developed the MeetAnOwner.com landing page, which featured stories from influencers and Subaru owners.

(Subaru’s Meet an Owner Initiative, 2017)

An example of camping is the video that the well-known influencer Zach King created in which he tried to impress his date by presenting a Subaru car (Geyser, 2021):

(Zach King (@Zachking) • Instagram Video, n.d.) 

The post received millions of views, hundreds of likes and comments. The video of this influencer received almost 9 million views on its own. The campaign was very effective as it resulted in to increase of 10% in Subaru’s sales.

(Case Study: How Subaru Used Instagram Influencers to Boost Its Brand Perception, n.d.)

Why was it effective?

Unlike the previous case study, which has been analyzed with PepsiCo’s brand, Subaru’s approach of using influencers was effective as the influencers themselves were highly enthusiastic about the campaign they joined. Moreover, the brand had carefully examined the social media channels it has launched the campaign on, as Instagram and YouTube are among the most famous platforms.  The organization's target group has also been carefully examined and presented by the millennial generation who value authenticity and see it as a key aspect for them. In this sense, by using well-known influencers, Subaru succeeded in presenting the campaign authentically and conveying its key message with good communication and user-generated content (Case Study: How Subaru Used Instagram Influencers to Boost Its Brand Perception, n.d.).

According to Rashida (2021), this strategy generated a sense of community among Subaru owners and customers, enhancing the brand's image and fostering trust. As mentioned earlier one of the factors the campaign was successful was the well outlined target audience in the face of millennials. Specifically, Subaru’s campaign through influencers tried to emphasize on:

• Safety for parents - One advertisement, for example, showed how their Driver Focus Alerts rescued a young woman from an accident. This gives Subaru vehicles a safe appearance, which appeals to parents and presents the brand as thoughtful.

(Subaru, n.d.)

• Pet owners - Subaru also targeted pet owners, by which the posts received even higher engagement in terms of likes and shares.

(S K Y & G R a C E (@Stayathomebun) • Instagram Photo, n.d.)

• Outdoor adventures – the brand presented advertisements that included family activities and also appealed to those people who value nature:

(S K Y & G R a C E (@Stayathomebun) • Instagram Photo, n.d.)

Overall, the campaign appeared to be successful as the brand succeeded in creating authenticity in its way of communication. By carefully examining its target audience, Subaru created well-centered advertisements through the help of influencers and succeeded in creating an emotional connection with its customers. The company effectively communicated the brand's basic principles and resonated with consumers seeking genuine connection. This collaboration with influencers created an atmosphere of trust and relatability, which increased the campaign's impact and thus, its loyalty (Rashida, 2021).