Do paid endorsements sell product?

There has been a great deal of discussion around influencer marketing and its effectiveness and validity. The industry is filled with communications professionals who swear by it, and other digital experts who say it’s ineffective because consumers realize they’re watching a paid endorsement and so tune it out.

My own analysis suggests that those in the latter camp are wrong.

I’ve long been a skeptic of the impact of sponsored versus organic content, but I couldn’t ignore the fact that my own millennial circle was consuming, sharing and engaging with influencer content. They didn’t seem to care whether it was labeled as #sponsored or not. And over the past several years, I’ve partnered with brands that participate in hundreds of influencer campaigns that led me to appreciate this approach.

So, to see how a sponsored post vs. a nonsponsored post does, we analyzed 150 million posts that used the hashtag #sponsored from Facebook, Twitter, Instagram and YouTube over the course of six months. Then we pulled the posts of these authors from the last 12 months. All told, we ended up analyzing 814,000 posts from influencers (not general users) of which 7 percent (59,261) were sponsored.

Our finding? Influencer marketing works. Here’s a look at our analysis:

1. First, we normalized the posts’ engagement based on follower size and post age to have a fair comparison. For engagement-rate calculations we used: Instagram (likes plus comments divided by followers); YouTube (upvotes and downvotes plus comments divided by views); Twitter (favorites plus comments plus retweets).

2. We learned that Instagram outperformed all other platforms in terms of engagement rates. We saw an average engagement rate of 25 percent (approximately 20 percent when duplicated likes and comments were removed). YouTube also performed very well with an average engagement rate of 7.7 percent. Twitter was the low performer with 0.41 percent.

3. We then addressed the question: Does #sponsored make a difference? In short, there’s no difference in engagement rates between sponsored or not in Instagram, and YouTube actually has a much higher engagement rate when the content is sponsored. My unconfirmed assumption is that since YouTube content is much more costly to produce, the quality seems to be much higher for sponsored. Twitter’s engagement rate was equally poor for sponsored and nonsponsored.

When we examined the percentage of posts that were #sponsored versus organic, we found that YouTube has the highest rate of commercial posts (again, in my opinion, due to the fact that it is more costly to produce video content). Instagram’s number of commercial posts was surprisingly low.

The only “negative” difference we saw was in the post sentiment. We found across all three platforms, on average, a more negative sentiment on post comments for #sponsored content; most common themes featured “selling out,” “fake,” “lie,” etc. Interestingly, on Instagram we also saw a much higher density of emojis on #sponsored versus organic.

Across platforms, when we had a call to action or other tagged URL, we did not see a difference in key performance indicators (bounce rate, conversion rate, etc.), meaning the traffic quality was equally strong (or poor).

But the mere presence of a #sponsored tag does not make a difference. That being said, an “influencer” with a fake or bad following will produce equally bad results no matter what. So, while #sponsored may drive the same level of engagement and action as a nonsponsored post against the same audience, there’s one element that’s vital to success: You need to make sure that you’re choosing authentic influencers who have an audience relevant to your products
or services.