Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 1 The Effects of Instagram Advertising on Brand Awareness, Ad Intrusiveness, Brand Attitude and Purchase Intentions Lidwine de Jong (11586540) Master’s Thesis Graduate School of Communication Master’s Programme Communications Science Supervisor: Susanne Baumgartner Date: 2 February 2018 Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 2 Abstract Instagram is becoming an increasingly popular social media platform and it is continuously creating new means to advertise. To date little is known about the effects that these different advertising methods have on consumers. This study sought to investigate how story advertisements, picture advertisements and influencer marketing on Instagram differ in the effect they have on brand awareness, perceived ad intrusiveness, brand attitude and purchase intentions. The effect of persuasion knowledge on influencer marketing was also investigated. These effects were assessed using an online experiment with a randomized between-subjects design with four experimental conditions. A total of 100 participants (N=100) were taken into analysis that were recruited through Whatsapp and Facebook. Results showed a significant effect between the experimental conditions and brand awareness; however, after doing a post- hoc test this effect showed a significance of p= .07. No significant effects were found between the advertising conditions and the other three dependent variables. Also, no significant correlations were found for persuasion knowledge in the influencer marketing condition. Keywords: advertising, Instagram, brand awareness, ad intrusiveness, brand attitude, purchase intentions, persuasion knowledge Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 3 Introduction Instagram is an increasingly popular social media platform that is dedicated to sharing pictures and videos either privately or publically. It was launched in 2010 and now has over 800 million users worldwide. Of these 800 million worldwide accounts, over 500 million users are believed to be active on Instagram every day (Instagram Business: Marketing on Instagram | Instagram for Business, n.d.). In the Netherlands Instagram has also become increasingly popular with over 3.2 million users in 2017, a 50% increase compared to the year before. It has become one of the five most popular social media platforms and its popularity continues to grow (van der Veer, 2017) This rise in popularity makes it an extremely interesting and relevant social media platform to study. Especially when it comes to advertising, as Instagram keeps creating new means in which it can sell ad inventory. It started in November 2013 with the introduction of sponsored post advertising in the United States. These were picture ads that popped up in between user’s news feed. In September 2015 these ads went global and were available for all advertisers. New features have continuously been added, creating even more room for advertising. For example, the Instagram story advertisements that were only just introduced in January 2017. Today businesses can buy four different types of advertising inventory on Instragram: photo ads, video ads, multiple photos/videos in one post ads (“carousel ads”) and stories ads (Instagram Business: Marketing on Instagram | Instagram for Business, n.d.). Another very important and less explicit way of advertising on Instagram is through influencer marketing. This type of marketing entails that brands pay influencers (e.g. celebrities, bloggers) to market their product on Instagram. This can, for example, be in the form of the influencer posting a picture on Instagram using a certain product or service. However, this form of advertising is often criticized as individuals tend not to recognize the persuasive nature of this type of advertising (Evans, Phua, Lim & Jun, 2017). Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 4 It is important to look at how these different types of advertising affect individuals, as how an advertisement is experienced is an important determinant of its success (Djafarova & Rushworth, 2017). This success if often measured by consumers’ brand attitude and purchase intentions. However, advertisements are also generally experienced as annoying and intrusive (Verlegh, Fransen & Kirmani, 2015). The problem here is that if persuasion attempts are experienced as too intrusive they may also backfire (Burgoon, Alvara, Grandpre & Voulodakis, 2002). Studies have shown that the more individuals feel like they are being persuaded, the more likely they will be resistant to this persuasive attempt (Burgoon et al., 2002; Verlegh et al., 2015; Voorveld & van Noort, 2014). Thus, it is important to distinguish between different types of advertising, as the effect they can have on consumers may differ. In this study I will look at how individuals respond to different types of advertisements on Instagram and see whether these advertising strategies have different effects when it comes to brand awareness, ad intrusiveness, brand attitudes and purchase intentions. I will focus on three types of advertisements on Instagram: influencer advertisements, picture advertisements and story advertisements. This leads to the following research question: RQ: How do story advertisements, picture advertisements and influencer marketing on Instagram differ in the effect they have on brand awareness, perceived ad intrusiveness, brand attitude and purchase intentions? These types of advertisements were chosen, as these advertising techniques seem to be the most distinct from each other on Instagram. Story advertisements focusing on video content, pictures advertisements on one single image and influencer marketing focusing on a less explicit type of advertising on Instagram. To date little research has been done comparing the effects these advertising methods have on consumers. Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 5 Theoretical background When looking at the effects of the different advertising methods used on Instagram, and more specifically the success of these advertisements, different outcome variables can be taken into account. In this study I will focus on brand awareness, ad intrusiveness, brand attitude and purchase intentions. These variables were chosen, as previous studies have proven these to be valid measures in determining the effectiveness of advertisements (Dehghani, Niaki, Ramezani & Sali, 2016; Djafarova & Rushworth, 2017; Hutter, Hautz, Dennhardt & Füller, 2013; Tutaj & Reijmersdal, 2012). The following section will focus on existing literature and theories relevant in determining how story advertisements, picture advertisements and influencer marketing may differ in the effects they have on these variables. The final section will focus on the effect persuasion knowledge may have on influencer marketing. Instagram Advertisement Effects on Brand Awareness One important dependent variable taken into account in this study is brand awareness. Hutter et al. (2013) define brand awareness as a consumer’s ability to identify a brand and the strength of the brand’s presence in a consumer’s mind. This awareness can be produced through any experience with a brand. In this case I will focus on brand awareness produced through advertising. Creating brand awareness through advertising has become increasingly difficult now that advertising content is often blended into the format and design of a social media platform, making it harder for consumers to recognize the content as advertising (Evans et al., 2017). This type of advertising is called “native advertising” or “invisible advertising” and has become increasingly popular in our online media environment (Hyman, Franklyn, Yee & Rahmati, 2017). Brand awareness is an important variable to consider; as individuals generally tend to have more confidence and trust in a brand they have heard of than an unknown brand. Furthermore, it tends to be important for consumers to think about a Running head: THE EFFECTS OF INSTAGRAM ADVERTISEMENTS 6 brand, and thus be aware of a brand, in order to consider purchasing it. Brand awareness can therefore be seen as a first step towards developing brand attitudes and purchase intentions (Hutter et al., 2013; Lu, Chang, W.P. & Chang, H. H., 2014). The three types of Instagram advertisements (story advertisements, picture advertisements and influencer marketing) will possibly have different effects on brand awareness. A theory that can explain which of the three advertisement conditions on Instagram will lead to the most brand awareness is the motion effects theory (Sundar & Kalyanaraman, 2004). The motion effects theory states that individuals tend to have an innate preference for moving objects over static objects. This is because motion grabs our attention and induces arousal. This effect has also been seen within advertising, with studies showing that animated advertisements induce higher levels of arousal and higher memory of the advertising content (Diao & Sundar, 2004; Sundar & Kalyanaraman, 2004). This was also the case in Day, Shyi & Wang (2006) study on flash banners, which investigated whether flash banners were either distractors or that these types of banners induced arousal. The results showed that flash banners indeed led to arousal and also increased processing of the advertising content (Day et al., 2006). According to these studies, the more motion and animation used in an advertisement the higher the brand awareness (Day et al., 2006; Sundar & Kalyanaraman,