nep-mkt New Economics Papers
on Marketing
Issue of 2022‒10‒31
three papers chosen by
Marco Novarese
Università del Piemonte Orientale

  1. Influence or Advertise: The Role of Social Learning in Influencer Marketing By Ron Berman; Aniko Oery; Xudong Zheng
  2. The Impact of Perceptions of Social Media Advertisements on Advertising Value, Brand Awareness and Brand Associations: Research on Generation Y Instagram Users By Ibrahim Halil Efendioglu; Yakup Durmaz
  3. Measurement of Trustworthiness of the Online Reviews By Dipankar Das

  1. By: Ron Berman (The Wharton School, University of Pennsylvania, 3730 Walnut Street, Philadelphia, PA 19104); Aniko Oery (Yale School of Management, 165 Whitney Avenue, New Haven, CT 06511); Xudong Zheng (Department of Economics, Johns Hopkins University, 3400 North Charles Street, Baltimore, MD 21218)
    Abstract: We analyze influencer marketing and advertising campaigns that can facilitate learning about uncertain qualities of products, while making consumers aware of them. We establish conditions for when influencer marketing, which lets consumers learn from other followers, is preferred to advertising, that does not enable such information sharing. Influencers facilitate learning when they are consistent in their post quality and have homogeneous followers relative to the degree of targeting of advertising campaigns. Whether efficient learning increases profits depends on the quality uncertainty of the product, e.g., whether the brand is established or unknown. For established brands, we find that many micro-influencers are more profitable than a targeted ad campaign, while for unknown brands, either macro-influencers with many followers or micro-influencers are more profitable. We also show that influencer campaigns tend to either "go viral" or "go bust", highlighting the value of ex-post promotional coupons. Additionally, for niche products we find that the heterogeneity of the follower base affects learning efficiency the most, while for mass products, the creativity of the influencer is the more important factor.
    Keywords: Influencer marketing; social learning; online advertising; word of mouth
    JEL: M31 M37 D83
    Date: 2022–09
  2. By: Ibrahim Halil Efendioglu; Yakup Durmaz
    Abstract: The aim of this paper is to examine how consumer perceptions of social media advertisements affect advertising value and brand awareness. With a rapid increase in the number of social media users over the last ten years, a new advertising domain has become available for companies. Brands that manage social media well in their advertising strategies can quickly influence consumer decision-making and create awareness. However, in social media advertising, which is different from traditional advertising, creating content should be produced and this content should be perceived in a short time by consumers. To achieve this, it is necessary to build rapport with consumers and to present correctly what they wish to see in advertisements by creating awareness. In view of the increasing importance of social media advertising, the study examines how consumer perceptions of Instagram advertisements affect advertising value and brand awareness. This study was conducted with Generation Y consumers on the basis of their Instagram habits, a popular social media app. For this purpose, surveys were held with 665 participants who use Instagram. The collected data were analyzed using structural equation modeling. According to the analysis results, Y generations perceptions of Instagram advertisements have both a positive and negative impact on advertising value and brand awareness and brand associations.
    Date: 2022–09
  3. By: Dipankar Das
    Abstract: In electronic commerce (e-commerce)markets, a decision-maker faces a sequential choice problem. Third-party intervention plays an important role in making purchase decisions in this choice process. For instance, while purchasing products/services online, a buyer's choice or behavior is often affected by the overall reviewers' ratings, feedback, etc. Moreover, the reviewer is also a decision-maker. After purchase, the decision-maker would put forth their reviews for the product, online. Such reviews would affect the purchase decision of another potential buyer, who would read the reviews before conforming to his/her final purchase. The question that arises is \textit{how trustworthy are these review reports and ratings?} The trustworthiness of these review reports and ratings is based on whether the reviewer is a rational or an irrational person. Indexing the reviewer's rationality could be a way to quantify a reviewer's rationality but it does not communicate the history of his/her behavior. In this article, the researcher aims at formally deriving a rationality pattern function and thereby, the degree of rationality of the decision-maker or the reviewer in the sequential choice problem in the e-commerce markets. Applying such a rationality pattern function could make it easier to quantify the rational behavior of an agent who participates in the digital markets. This, in turn, is expected to minimize the information asymmetry within the decision-making process and identify the paid reviewers or manipulative reviews.
    Date: 2022–10

This nep-mkt issue is ©2022 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.