Sponsorship Disclosure of Influencers - A Curse or a Blessing?

Influencer marketing has become increasingly important in the field of marketing communication as an effective way to reach the appropriate target group. Using their own social media channels, influencers often give the impression that they have a personal rather than a commercial relationship with the brand and the products they promote. Therefore, when influencers post sponsored content, consumers often experience difficulty making accurate distinctions as to whether the influencer is offering a personal recommendation or doing a promotion. Given this issue, we examine to what extent sponsored posts of different influencer types affect consumers' evaluations of the sponsoring brand and the influencer as well as what role the sponsorship disclosure plays therein. Across four experimental studies, we demonstrate that sponsored posts of mega influencers increase consumers' persuasion knowledge relative to the posts of nano influencers, which decreases the trustworthiness of those posts and in turn negatively impact both brand and influencer evaluations. Interestingly, our results reveal that this indirect effect is only present when the sponsorship is not disclosed. Thus, more transparency by disclosing such sponsorship can eliminate the negative impacts of persuasion knowledge on the trustworthiness of posts and subsequent evaluations of the brand and the influencer. These findings have important implications for marketing practice and research.