1. Introduction
In September 2020, Dunkin Donuts, a popular coffee and donuts chain, launched a limited-time drink, “The Charli”, which is Dunkin’ Donuts’ signature cold brew coffee combined with whole milk and three pumps of caramel syrup. It is named after one of the most popular TikTok influencers, Charli D’Amelio, who is a dancing sensation in Tik Tok partnered with Dunkin Donuts ( Chakrawarty & Chakraborty, 2022 ). This partnership brings Dunkin Donuts a huge profit. The data indicates that “Dunkin broke its record for daily users of its app the day The Charli was released. There was a 20% overall sales boost for cold brews the day the drink was released and a 45% increase the following day” ( Influence Hunter, 2022 ). The above example is a classic case of influencer marketing.
Influencer marketing now seems more like a product of an era, and the real rise of influencer marketing may even be an unexpected result of the epidemic era. Before that, people were more exposed to celebrity endorsements. “Celebrity endorsement is a form of advertising campaign or marketing strategy which uses a celebrity’s fame or social status to promote a product, brand or service, or to raise awareness about an issue” ( Business Dictionary, 2020 ). One of the earliest examples of celebrity endorsement can trace back to 260 years ago. In the 1760s before the word “brand” entered the commercial lexicon, English entrepreneur Josiah Wedgwood used celebrities to give his brand of porcelain “Wedgwood” a unique status at the time. In 1765, Wedgwood produced Cream Ware for Queen Charlotte, and the product soon became known as “Queen’s Ware”, signifying its elegance and quality ( Medvedenko & Neusikhina, 2019 ). Leveraging the royal family’s reputation, Wedgwood also quickly used royal customization as a selling point for its merchandise, establishing Wedgwood as a brand that completely exceeded the value of the merchandise itself.
Through the above two examples, influencer marketing and celebrity endorsement functions are very similar; both are marketing strategies that use public figures to promote products or services to consumers. But influencer marketing is more of an extension of celebrity endorsement. Charli D’Amelio, in the first case, is just a 16-year-old girl who shares her dance videos through TikTok. In the second case, Queen Charlotte is the wife of King George III. Celebrity in the celebrity endorsement refers to famous actors, singers, athletes, royal family members, and celebrities with certain social influences. Brands rely on these celebrities’ personal qualities and influence to market their products or services. They have huge fan bases and wider appeal. An influencer in influencer marketing refers to ordinary people who attract target groups with similar tastes by sharing their expertise in their field or trifles of their daily life on social media. Based on the above, people are no longer limited to the definition of celebrities, and ordinary people also have the opportunity to gain fame and wealth by becoming influencers.
Importance of Influencer Marketing
Influencer marketing is important because today’s consumers have completed the transformation to digital, and influencer marketing is a new trend brought about by this digital age ( Kastenholz, 2022 ). “TikTok has become mainstream; podcasts are part of our daily routines; Instagram is now video-first and shopping-oriented” ( Kastenholz, 2022 ). Looking back at 2020 from now, although only 3 years have passed, the era of digital interconnection Development is moving forward at an unbelievable speed. The unexpected epidemic severely damaged all economic forms, but it unexpectedly promoted the digital Internet era. The Internet has occupied the focus of most people’s lives. In those days when people stay at home, people rely on the Internet to obtain real-time information and rely on major social software to ensure daily social interaction. The emergence of more and more functional software, such as food delivery platforms and online education platforms, is trying to provide people with an offline life experience as much as possible. People who experience the convenience of Internet life spontaneously choose this new way of life. Even in the post-pandemic era, people still miss the days when they could work or school from home.
Moreover, in today’s media environment, traditional mass communication channels, such as TV, radio, and newspapers, are no longer consumers’ main source of information. Instead, consumers choose to use social media or virtual communities for information interaction ( Lou & Yuan, 2019 ). Consumers have become less receptive to traditional advertising, even bored. In the eyes of today’s consumers, traditional advertisements are flashy and only ornamental, with the main purpose of inducing consumption. People shy away from advertisements they encounter on any platform, regardless of their nature. “Clicks on paid display advertising have crashed to an average of 0.47%, or, to rephrase, 99.53% of impressions on digital advertising fail to inspire consumers to click and take action” ( Kastenholz, 2022 ). In contrast, in a recent study on social According to a report by Media Trends, 94% of marketers who use influencer marketing find it an effective practice, and influencer marketing can generate up to 11x the ROI of traditional advertising ( Ahmad, 2018 ).
This study will first define influencer marketing, its evolution and significance as well as the underlying paradigms and psychological factors behind influencer marketing such as authenticity, consistency and trust. Secondly the article will elaborate on the 4P’s marketing framework (product, price, place, promotion) associated with influencer marketing, emphasizing the pivotal role it still plays in shaping successful marketing campaigns; and the Elaboration likelihood model (ELM) to explain how influencers persuade their audiences through both central and peripheral pathways. In addition, the article will explain the concepts of conformity and the “bandwagon effect” to illustrate how influencers shape consumer preferences. Finally, the article will analyze successful and failed influencer marketing campaigns, demonstrating the importance of authenticity and proper alignment of values.
2. Influencer Marketing Related Models
2.1. 4P’s
E. Jerome McCarthy first introduced the 4 P’s in his 1960 book Basic Marketing: A Managerial Approach ( Goi, 2009 ). Businesses have used it for decades, and are still considered a valuable marketing tool today. Influencer marketing, as a marketing strategy, still follows the 4P’s as a framework.
Product: Whether it is the traditional retail era or the emerging Internet marketing era, the product itself is the fundamental factor for the success of the brand. It’s just that compared with the traditional marketing era, under influencer marketing, consumers’ requirements for the product itself are also constantly improving. Take Florasis, a Chinese cosmetics brand as an example, Florasis offers a wide range of products, including facial makeup, eye makeup, lip makeup, and makeup tools, covering the entire process of putting on makeup ( Yang et al., 2021 ). However, this local Chinese brand is suddenly in the hot sale in the United States precisely because of the quality of the product itself and the video promotion of Jeffery Star, who is a famous Youtuber focusing on the cosmetic industry. In the video, Jeffery speaks highly of the highlighter, powder, and lipstick. And these products themselves also have unique product advantages. For example, the loose powder is based on plant formula and has a long-lasting oil control effect; each lipstick paste has exquisite Chinese classical carving patterns. And this brand is also the only one in the Chinese market with an etched pattern ( Yang et al., 2021 ). The product itself first needs to ensure the bottom line of high quality. On top of this bottom line, today’s consumers are increasingly concerned about the functional and emotional value that this brand brings to people. Under the rendering of Jeffery, what consumers feel is not only the practicability of the product but also the emotional value that the product brings to consumers. An exquisite packaging and the culture contained in it are the considerations of consumers for a product today.
Price: Unlike traditional pricing methods, customers in the 21st century are no longer passive recipients of products or services but a symbiotic relationship. In influencer marketing, corporate pricing is not only based on cost and profitability goals but also decided based on the level of the influencer and the number of its fan base. Specifically, there are two types of pricing; one is to follow the traditional cost pricing principle, which is a price range decided after calculating the cost, and usually to enter the market at a low price and then gradually increase the price according to the demand. The second type is the unique pricing mechanism of influencer marketing. If an influencer with a million followers and an influencer with 100,000 followers sell products through short videos at the same time, then the former can get a lower price than the latter to offer to their fans. For example, Dear Irean, a newly emerging niche brand of scented body wash, is mainly sold and promoted on TikTok. The brand found two influencers, one is Mia Han, who has 1.502 million followers on the TikTok platform, and the other one, Xiyao Wang, who has 38,000 followers on TikTok. Both influencers are selling the same body wash product from this brand at the same time, Mia’s selling price is 10 dollars while Xiyao’s selling price is $16. Even there is only 6 dollars difference, it’s enough to infer that brands will be more inclined to allocate lower prices to influencers who have enough followers and influence. In addition, the price can be obtained through the interaction between the consumer and the influencer. During the interaction between the customer and the influencer, the influencer collects the intentions of the fans and adjusts the pricing according to the fans’ wishes and total demand. This means that pricing is no longer a unilateral decision of the company ( Wang et al., 2022 ).
Place: Nowadays, with the birth of the Internet and mobile terminals, companies can connect directly with the final purchaser via the Internet ( Dwivedi et al., 2021 ). And influencers are like retail outlets that these brands find for themselves on the web. Various social platforms as well as shopping apps, have turned into locations where people spend their money. For example, under a brief ten-second TikTok video, a sign for consumers to add a shopping cart often exists.
Promotion: Influencer marketing combines traditional promotions as well as innovative promotions to achieve the goal ( Brand Media Strategy, n.d. ). For conventional promotions, such as new product discounts, issuing coupons, and lucky draws for free tickets to promote sales, brands also post interactive topics or retweet hot events on mainstream social media to gain attention and enhance the connection between fans and brands through retweets and comments, thus indirectly promoting sales. Influencer marketing, on the other hand, uses more innovative promotion methods. By producing personal and product stories to convey brand and product information to consumers, the price mechanism of communicating with influencers and brands through video content and language rendering to promote consumption ( Lee & Kim, 2020 ).
2.2. Elaboration Likelihood Model
The Elaboration Likelihood Model (ELM) is a dual-process theory of persuasion that explains how people form attitudes. The ELM was developed by Richard E. Petty and John Cacioppo in 1980. The model proposes two major persuasion routes: the central and peripheral routes.
Central route processing occurs when people are motivated and can mull over a persuasive message. They carefully consider the arguments presented in the message and assess their strength. People will be persuaded to change their attitude if the argument is strong ( The Elaboration Likelihood Model of Persuasion Background, n.d. ). Peripheral route processing occurs when people are unmotivated or incapable of thinking through persuasive information. They may be persuaded by factors such as the attractiveness of the source of the information, the use of humor or an emotional appeal, or the number of people who agree with the message ( Petty & Cacioppo, 1986 ).
While both paths have their utility, influencer marketing is more focused on using peripheral paths. Influencers are known to be primarily placed on mainstream short-form video platforms and include videos from various fields in the flicking process. The limited time and sheer volume of information mean that people do not have the motivation or ability to analyze whether the products recommended in each video are worth buying. Consumers are more likely to be motivated by the influencer’s expertise, appearance, manner of speaking, and emotional connection when viewing these short videos. An example is the use of source cues. Source credibility, a term often used to assess positive characteristics of influencers to increase persuasiveness, consists of two main dimensions: expertise and credibility ( Ohanian, 1990 ). Expertise focuses on the knowledge and experience of the influencer; influencers focus on developing content on topics they are familiar with (e.g., beauty, fitness, travel, etc.) Their followers trust the influencer’s expertise and the reliability of the content posted, and fans are more willing to become consumers without question in such cases. In addition, emotional links are also a means to an end. Influencers can attract the love of their fans through their appearance and humorous narrative. After such emotions are established, consumers will pay for products recommended by people they like, even without knowing whether the product is worth it. For example, the point that motivates consumers to buy a new drink is when their favorite influencer drinks or compliments the drink on videos; consumers don’t know the product itself at all, and their desire to buy is purely out of love and support for the influencer ( Syrdal et al., 2023 ).
3. Psychological Terms in Consumer Behavior
3.1. Conformity
In the dynamic world of marketing, success depends on the understanding and application of consumer behavior. Conformity is a key psychological phenomenon. Through the innate human desire to conform, influencers can strategize to shape their image and consumer perceptions and drive consumer conformity ( Lascu & Zinkhan, 1999 ). In marketing, Burnkrant and Cousineau (1975) define conformity as: a) tendency of opinions to establish a group norm (i.e., a set of group expectations on how members should behave), and b) the tendency of individuals to comply with the group norm ( Lascu & Zinkhan, 1999 ). The following are two forms of conformity.
Normative Social Influence: Normative social influence occurs when individuals conform to the behaviors and opinions of others to gain social acceptance or avoid social exclusion ( Knoll et al., 2015 ). In influencer marketing, influencers set trends, establish social norms, and shape consumer preferences. When influencers endorse or promote products or brands, their followers may conform to their preferences to be seen as part of the group or avoid feeling left out. By leveraging normative conformity, influencer marketing campaigns can create a sense of belonging and social identity among their target audience ( Burchell, Rettie, & Patel, 2013 ).
Bandwagon Effect: The bandwagon effect refers to individuals’ tendency to conform to others’ behaviors or beliefs due to a desire to be part of a popular or successful trend. In influencer marketing, influencers often create a sense of popularity and desirability around certain products or brands through their endorsements and lifestyle portrayals. In turn, consumers will go along with the influencer to endorse the trend and thus make a purchase ( Choi et al., 2015 ).
3.2. Trust and Authenticity
Trust and authenticity are also critical strengths in influencer marketing. Let’s imagine a traditional TV commercial where the consumer can clearly sense the commercial purpose. Still, if it’s a natural person sharing a product he likes with you, you’ll be quickly convinced and persuaded. Today, the audience group for influencer marketing is Gen Z. Gen Z, also known as the “digital natives”, a generation that has grown up with technology and social media as a central part of their lives ( Moore et al., 2018 ). One trend that has emerged among Gen Z consumers is their willingness to pay for honesty and authenticity in the products they purchase. The first reason for this trend is that Gen Z grew up in a highly digital environment, with vast amounts of information at their fingertips. As a result, they are highly skeptical of traditional marketing tactics and are more likely to trust recommendations from peers and influencers they follow on social media. They seek out brands and influencers who are transparent about their practices and values and prioritize authenticity and ethical behavior. This desire for authenticity also reflects Gen Z’s quest for spirituality. They expect to encounter a brand that genuinely matches their world perspectives and their real selves, and they prefer to support brands that take a stand on social issues, promote sustainability and ethical practices, and communicate honestly about their products and services ( Neufeld-Wall, 2023 ).
4. Success and Failure Campaign for Influencer Marketing
4.1. Success Campaign
In today’s product-saturated market, it is difficult for small businesses to succeed. But influencer marketing is a breakthrough that, if used properly, has the opportunity to gain attention and benefit for brands, as exemplified by NYX Makeup, now a well-known cosmetics brand under L’Oréal, which initially developed its brand by engaging with unpaid influencers ( Dao, 2022 ). With an Earned Media Value (EMV) of more than $50 million, the brand ranked third among cosmetics firms in social engagement in 2017. The company’s social media interaction increased by 97 percent from February 2016 to February 2017. Customers actively shared content on social media about the product, such as why they liked it, how to use it properly, and how to create a different style presentation of the product. NYX also sent these influencers products on a regular monthly basis, allowing the influencers to authentically communicate their impressions of the product to consumers through trials. And with such honest and natural content development, NYX has gradually built up a huge and loyal user base ( Weinswig, 2017 ).
4.2. Failure Campaign
While influencer marketing has proven to be a powerful tool for brand promotion and consumer engagement, only some campaigns deliver the desired results. This failure story sheds light on a notable influencer marketing campaign that fell short of expectations, highlighting the importance of alignment of values and authenticity. The case of Snapchat and Luka Sabbat demonstrates the failure of influencer marketing. Snapchat hired influencer Luka Sabbat to promote the company’s Spectacles sunglasses, designed for the social platform. Sabbat and Snap explicitly agreed to post three Instagram stories and one post wearing their new specs on his Instagram feed. Sabbat only published one story and one post. The result was that Sabbat had to repay Snap’s payment and another $45,000 in damages ( Constine, 2018 ). And this incident thrust Sabbat and Snapchat into the center of public opinion, and consumers began to question the authenticity between the influencer and the brand, feeling that it was more of a transactional relationship between them. So this example re-emphasizes the importance of authenticity in influencer marketing, and that brands should trust their influencers more and give them enough time and space to give honest feedback about how the product fits into their lives.
5. Limitations and Recommendations for Future Researchers
This research provides valuable insights into influencer marketing and its impact on consumer behavior and brand outcomes, but there are some limitations that future researchers should consider when conducting further investigations in this area. The first point is scope and generalization. This study focuses on influencer marketing in the context of social media platforms, having its focus on mainstream platforms such as TikTok and Instagram. However, the market for digital marketing is rapidly changing and future researchers should consider expanding the scope of the study to include emerging platforms or alternative strategies. The second point is the long-term effect. This study focused on the direct effects of influencer activity. Future researchers could explore the long-term effects of influencer marketing on brand as well as customer loyalty. The third point is consumer skepticism. As more and more influencers emerge, consumers have begun to become skeptical of the field, and future research should explore ways to mitigate this skepticism, increase consumer trust, and maintain the continued authenticity of influencer endorsements.
6. Conclusion
Overall, influencer marketing has become a pleasing strategic tool in the digital age. It utilizes the power of social media to interact with consumers and increase brand awareness. This research paper explores the evolution of influencer marketing, its basic operational framework, and examines its dynamic and effective nature and impact on consumer behavior and brand effectiveness. Through the analysis of real-life case studies such as Dunkin’ Donuts’ partnership with Charli D’Amelio, the research emphasizes the significant impact of influencer marketing on sales and brand awareness. As traditional advertising is losing its appeal, influencer marketing has become a more authentic and engaging way of connecting with audiences, and it is clear from the report that influencer marketing has a much higher return on investment compared to traditional advertising methods. This research also delves into the application of the 4P’s marketing framework to influencer marketing, demonstrating how product, price, place and promotion continue to play a vital role in shaping successful influencer marketing campaigns. The interplay of these elements, coupled with the use of the Elaboration Likelihood Model (ELM), highlights how influencers can effectively communicate and persuade audiences through both center and peripheral pathways. Additionally, the study explores the concepts of conformity and the “Bandwagon Effect”, illustrating how influencers can shape consumer behavior and preferences by setting trends and establishing social norms. Of course influencer marketing is not always successful, and this study also cites influencer marketing failures to highlight the fact that influencer marketing also requires the full cooperation of businesses as well as influencers. In conclusion, influencer marketing has become an important tool for modern marketers, providing a unique way for businesses and consumers to interact in this rapidly emerging digital world. As influencer marketing continues to evolve, understanding its complexity, functionality and realizing its full potential may take the strategy to a whole new level.