The strength of sponsored blog posts An experiment on the effects of blogger popularity, degree of disclosure and the mediating role of credibility on consumer’s purchase intention. Inge Hoeks ANR: 196930 Master thesis Communication and Information sciences Track Business Communication and Digital Media School of Humanities Tilburg University, Tilburg Mentor: dr. A. P. Schouten Second reader: dr. C.C. Liebrecht 22 August 2016 THE STRENGTH OF SPONSORED BLOG POSTS Abstract The rapidly expanding blogosphere has caused a small group of popular and influential bloggers to become celebrities. Leading brands use this growing popularity by collaborating with these popular bloggers to represent, promote or endorse their products. A sponsored collaboration with a blogger can be valuable for brands, based on the belief that the opinions of bloggers are very influential and have high persuasive impacts on their readers. However, since national regulations oblige bloggers to reveal any sponsored collaboration with a brand, the commercial intent of those blog posts can no longer be hidden. Therefore, bloggers are obliged to disclose the sponsored relationship with brands. However, the effect of the degree of this disclosure on purchase intention of the reader is still unknown. This study made use of a 2 (blogger popularity) x 3 (degree of disclosure) experimental design and gathered a total of 235 participants to examine consumers’ purchase intention and perceived credibility of the source. The results showed that the sponsoring of blog posts and the popularity of the blogger did not significantly affect consumer’s purchase intention. However, when comparing the sponsored conditions, moderate disclosure lead to a higher consumer’s purchase intention compared with complete disclosure. Keywords: Sponsored blog posts; Purchase intention; Blog posts; blogger popularity 2 THE STRENGTH OF SPONSORED BLOG POSTS Introduction Blogs have captured the world’s attention (Chu & Kamal, 2008). In May 2015 the Dutch newspaper Het Financieel Dagblad used the following headline, “Supermodels face competition from popular bloggers and Youtube-stars”, for an extensive article about the meteoric rise of bloggers as brand ambassadors (Smit, 2015). The article stated that catwalk models and celebrities have to make room for the new heroes of the internet, bloggers. They are considered to be the new stars of this era (Smit, 2015). Additionally, statistics reveal that in 2014, 6.7 million people worldwide use blogging sites to blog, 77 percent of internet users read blogs, and 23 percent of the internet time is spent on social media and blogs (Ignitespot, 2014). These numbers show that the growing attention for blogs is not without a reason. The growing popularity and rapid expansion of the blogging phenomenon is also shown by the fact that popular bloggers are looked at as celebrities. These bloggers have millions of regular visitors and have made their living out of blogging (Chiu & Ho, 2009). Harvard Business School even dedicated a case study to the founder of the world’s most popular fashion blog, The Blond Salad. The 27-year-old founder Chiara Ferragni has dozens of fans across the globe, a staff team consisting of fourteen members and revenues estimated at nine million dollars in 2015 (Keinan, Maslauskaite, Crener & Dessain, 2015). Weblogs, or in short blogs, belong to the new generation of the Web 2.0 and serve as a platform for users to create and share content (Fieseler, Fleck & Meckel, 2010). The so- called Web 2.0 enables users to not only to consume, but also to create content by composing, editing, modifying, and exchanging data (Chiu & Ho, 2009). Anyone can create a blog and post one’s own ideas, opinions, and various other forms of content on one’s website. Therefore, blogs are expected to be an important digital information source, because they contain large quantities of rich digital content (Chiu & Ho, 2009). Besides the creation of blogs, reading them has also become an important activity for Internet users. Popular blogs that are frequently visited and have millions of regular visitors are an important information source which consumers use to gather information. These blogs exert a major influence on consumer’s purchase behavior. Visitors develop a strong bond and close interpersonal relationships with the blog or blogger, by frequently visiting, reading, and exchanging information (Chiu & Ho, 2009). As a result, bloggers and their blogs are a powerful advertising medium and which results in a growing trend of blog advertising (Chiu & Ho, 2009; Zhu & Tan, 2007). Leading brands use this growing popularity by collaborating with popular bloggers to represent, promote or endorse their products (Chu & Kamal, 2008). 3 THE STRENGTH OF SPONSORED BLOG POSTS In the literature, Zhu and Tan (2007) used the term blog advertising to refer to the paid sponsorship of bloggers to mention, review, promote or sell products in their blog posts. A sponsored collaboration with a blogger can be valuable for brands, based on the belief that the opinions of bloggers are very influential and have high persuasive impacts on their readers (Zhu & Tan, 2007). In fact, Hope (2002) stated that blogs with a brand-related message are perceived as highly credible, because bloggers are not dependent on corporate interests. Because of their impact, selecting appropriate blogs and proper use of those blogs is an important corporate advertising issue (Chiu & Ho, 2009). As blogs become a powerful advertising and communication medium, understanding the use of blogs and the importance of credibility is fundamental for marketers, companies, and brands (Chiu & Ho; Porter, Sweetser & Chung, 2009). Since national regulations oblige bloggers to reveal any sponsored collaboration with a brand, the commercial intent of those blog posts can no longer be hidden (Lu, Chang & Chang, 2014). Although the credibility of blog posts has extensively been researched, very little attention has been paid to sponsored blog posts (Colliander & Erlandsson, 2015; Lu, Chang & Chang, 2014). Do blog readers care at all if a blogger has been compensated for endorsing certain products or services? Previous studies have reported the influence of revealing the use of sponsored blog posts on purchase intention of readers, but have not dealt with the degree of disclosure about the sponsored relationship. It can be assumed, that the degree of disclosure about the sponsored relation between the blogger and a brand influences the credibility of the blogger and thereby the purchase intentions of the reader. Since sponsored recommendation posts are proven to be a successful marketing tool, understanding of how the type of mandatory disclosure can influence readers purchase intention appears to be crucial in understanding the use of this influential online medium. However, limited research has been conducted on blogs and their impact on consumer’s purchase intention (Bouhlel, Mzoughi, Ghachem & Negra, 2010; Chu & Kamal, 2008). Therefore, this study tries to gain insights in the blogging phenomenon and the use of blog marketing to expand the existing literature. Which in turn allows brands and marketers to make better use of this marketing tool. Moreover, this study investiges the effect of blog popularity. The small group of extremely popular bloggers are considered to be important influencers among consumers, because of their huge reach consisting of a loyal fan base (Trammel & Keshelashvili, 2005). However, given the nature of the blogosphere, influential and popular blogs are few (Agarwal, Liu, Tang & Yu, 2008). On the other hand, the number of relatively unpopular 4 THE STRENGTH OF SPONSORED BLOG POSTS bloggers continues to expand rapidly. Although these popular bloggers are becoming leading online influencers with a high publicity effectiveness, previous research has not dealt with the potential effects of differences in popularity. Therefore, this study also tries to identify to what extent blogger popularity influences consumers. Conclusively, the following research question will be answered: Which effects have the popularity of a blogger and the degree of disclosure about the use of sponsored blog posts, on the credibility and purchase intention of blog readers? 5 THE STRENGTH OF SPONSORED BLOG POSTS Theoretical Framework Blogs as medium Weblogs, mostly used as the abbreviation blogs, have gained immense popularity all over the world. Hansson (2015) describes a blog as a personal diary, where bloggers share their own thoughts, content, or ideas and which is accessible for others via the Internet. Chu and Kamal’s (2008) description adds that these strongly personalized diaries generally contain up-to-date content arranged in chronological order. Most of them are predominantly opinion-based and the largest demographic for this ‘personal diary’ genre blogs are females and teenagers (Schmidt, 2007). Most blogs make us of text, images, videos, links to other blogs and webpages or a combination of the above. The entries of these mentioned content forms are called blog posts (Agarwal, Liu, Tang & Yu, 2008). Researchers stated that blogs became immensely popular because they are easy and freely accessible, each blog has its own theme, they are updated regularly about contemporary topics, and written by everyday persons with which the reader can identify (Grossman, Hamilton, Buechner and Whitaker, 2004; Hansson, 2015). These features make blogs an important and reliable information source for readers. Literature defines