Gianna Tsesmelis

ENC2135

Boudreaux

17 February 2017

Over the Past Five Years, how has the Introduction of Celebrity Endorsements to

Instagram Impacted how Consumers view Digital Advertisements?

Some of the most influential people in America are famous celebrities; whether

they are politicians, actors, or religious leaders, they all have some impact on the lives of

those who idolize them. Since marketing companies are aware of this, it is no surprise

that they have turned to celebrities to endorse their products. Since the late 1700s, people

have been using this tactic to attract the public to a product that they are selling. Of

course the field of marketing and advertisement took off when television and, later, the

Internet were introduced. In the present day, however, companies have taken their

advertisements to social media sites, such as Facebook, Twitter, and most recently,

Instagram. Using statistics and data from a variety of academic journals as well as

information from newspapers and blog sites, the following question can be answered:

Over the past five years, how has the introduction of celebrity endorsements to Instagram

impacted how consumers view digital advertisements?

Authors from The Canadian Journal of Economics, Professors C. Robert Clark

and Ignatius J. Horstmann, claim that although the use of celebrity endorsements began

over 100 years ago, it really took off when companies began using professional athletes

in the 1930s. According to Horstmann and Clarks article, by 2007, the top 10 pro
athletes alone earned $287.5 million in endorsement income (1607). The reason for this

is probably linked to the fact that a majority of endorsement deals involve athletic shoe

manufacturers (Clark, Horstmann 1607), such as Nike and Adidas. A study documented

in the same article indicates that celebrities enhance brand recall (Clark, Horstmann

1606) when they are used in an advertisement. This must be considered when weighing

out the impacts of celebrity endorsements because there is now a question as to whether

the celebrity increases the appeal of the product or simply the likelihood of consumers

remembering the product.

An additional consideration must be made regarding the possible negative

implications involving celebrity endorsements, such as publicity scandals. In Professor

Craig Garthwaites article from the American Economic Journal: Applied Economics, he

acknowledges the negative publicity [that surrounded] Tiger Woods alleged marital

infidelity in 2009 (79). According to Garthwaite, this event decreased the value of

products that Woods endorsed, causing firms to lose large amounts of money. In the

majority of cases, celebrities do have a positive influence on how consumers view digital

advertisements, however, there are clearly some instances where that is not the case. A

New York Times article by Sapna Maheshwari discusses how a simple statement from the

New Balance shoe company to the Wall Street Journal influenced many of the companys

consumers to stop buying their products and even throw their already bought shoes in the

garbage. The statement seemed to support Donald Trumps presidential campaign, saying

that [they] feel things are going to move in the right direction (Maheshwari B9). It was

later explained by the company that the statement was taken out of context and was not

referring to the campaign as a whole, but rather a business related aspect of Trumps
campaign. A study done by Anna Poghosyan and published by the European Scientific

Journal states that celebrities used in the promotion campaigns therefore are one of the

most effective ways to present a product or a brand by adding a special value and

importance to it (34), which helps explain the reason why negative publicity can shed a

disrespectful light upon companies that are associated with it.

A study done by marketing Professors, Dr. Jagdish Agrawal and Dr. Wagner A.

Kamakura showed that on average, investors [of companies] seem to value positively

the use of celebrities in advertisements (60). This study analyzed the success from using

celebrities to endorse their products. It was published to the Journal of Marketing in

1995, so the information is not relevant to digital news, but it is relevant in discussing the

effectiveness of celebrity endorsements. In order to analyze the effectiveness, Dr.

Agrawal and Dr. Kamakura studied the abnormal stock returns of the companies used.

According to the results of this study, firms announcing contracts with celebrities

experienced a gain of .44% in excess returns (Arawal, Kamakura 59). Horstmann and

Clark used the results of this study to formulate the major points of their assessment and

found that celebrity endorsements lower the cost of reaching a given set of customers by

enhancing consumer recall and/or increase consumers valuation of an endorsed product

(1623). An important factor of celebrity endorsement is to find a celebrity that [matches]

the brand[and has] the value and image required to advertise the brand (Wilson

Edzorna Dzisah, Chosniel Elikem Ocloo 197). As discussed, digital news can negatively

impact a product if the celebrity endorsing it has recently been involved in a displeasing

event. It can also, however, greatly affect a companys credibility if the person endorsing

its product is highly respected and adored by the public. The introduction of social media,
specifically Instagram, allows companies to reach out to popular public figures and pay

them to advertise directly to thousands or even millions of followers. According to a book

called Contemporary Ideas and Research in Marketing, however, although a celebritys

testimony of a product increased the confidence of 85% of people in a conducted survey,

only 15% said that the presence of a celebrity dictated their decision to buy the product.

(Angela Sokolovska).

Over the past five years, companies began to use more than just television

commercials and billboards to advertise their products. Instead they have started to use

social media as its popularity continues to climb. The reason that companies have been

choosing social over other mediums is the fact that a large majority of people use social

media platforms such as Facebook, Twitter, and Instagram every day, multiple times per

day. The number of hours of television that people watch per day has decreased since

over the past few years since the release of Netflix, where users can stream movies and

TV shows for a monthly cost. As a result, marketers have turned to social media to insert

their product into the feeds of account holders. In an article discussing advertising on

Facebook, Doctor Kevin Curran, Sarah Graham, and Christopher Temple claim that,

social networking sites in general now account for one out of every five ads people view

online (26). This furthers the point made earlier about why marketers have turned to

social media. The question now becomes whether or not this method truly works better

than traditional advertising or not. Also, whether or not including a celebrity in these

social media campaigns has helped even more.

Being able to reach a vast amount of viewers for the most economic price is an

important part of advertising. This is why social media is such an advantageous method.
Not only do marketers have access to hundreds of millions of potential consumers, but

they can also advertise for a much lower cost than traditional methods. As stated in the

article by Curran, Graham, and Temple, almost 1 in every 13 person in the world is an

active Facebook user (32) and the majority of these users are young adults. The

demographics for Instagram users are quite similar, that is, the majority of its users are

relatively young. As previously mentioned, these users are much more susceptible to

suggestion and, additionally, are usually more relaxed about spending [money] online

and generally have more of a disposable income to spare (Curran et. al. 33). This creates

a direct pathway for companies to reach consumers that are more likely to purchase items

seen in advertisements.

Instagram is not necessarily new to the social media world, but over the past five

years it has greatly increased its number of users since its beginning. According to two

different bloggers, the platform has increased its number of users from one million

accounts just 2 months after its launch (Irfan Ahmad) in 2010 to over 500 million

active monthly users (Sydney Parker) as of November 2016. The appeal of using

Instagram comes form the fact that Instagram is strictly photo and video content. As

opposed to the typical advertisement where the words do most of the persuading,

Instagram ads solely show a photo with a caption below explaining all of the product

details. While a percentage of companies have their own accounts and post

advertisements from there, other companies do that as well as paying celebrities to post

pictures from their accounts. Not only does this put the photo directly into the feed of the

celebritys followers, but it also appears to followers that the person advertising the

product truly finds the product useful and recommends it to the public. According to
another article by Maheshwari, this is because the photos appear as testimonials rather

than advertisements (A1), which entices viewers more than an obvious advertisement

would. Additionally, about 55% of Instagram users are under 30 according to

demographics from 2015 by the Pew Research Center. Young people are often much

more vulnerable and susceptible to suggestion, which makes it much easier for marketers

to convince users viewing the ads to buy their product.

One thing that Facebook does to enhance its advertising effectiveness, is allow its

marketers to create a page for their business as if it were a profile of a person. This makes

it easy on consumers by allowing them to click on a business profile and access photos,

links, and other informative details about any products the company sells. Also, the site

allows targeting based on demographic profiles and interests that users reveal about

themselves on their pages (Curran et. al. 29). This directs specific ads only to the people

who seem as though they would be interested in them, based on information from their

profiles. Similarly, Instagram allows businesses to make their own page, but unlike

Facebook, they do not have to have a personal account in order to make their business

page. Additionally unlike Facebook, Instagram is strictly photos and videos. The only text

comes from a short biography at the top of the users profile and the captions written

underneath each post. This seems much more effective because people look for what is

visually pleasing and exciting. Attracting people by photo is much more effective at

drawing the consumer eye. In recent years, Instagram has also enhanced its explore page.

This page was originally designed to see the most popular posts on the website at that

current moment; however, the site has been modified into a page that displays photos

based on user likes and similar accounts to those that they already follow. This brings up
the topic of celebrity endorsement because many of the posts on the explore page are

visually pleasing. Even if a user does not follow any celebrities, it is still likely that they

will encounter celebrity endorsements, simply based on the types of photos that they like.

In conclusion, it is fair to say that celebrity endorsements impact a consumers

decision on whether or not they should purchase a product. Not only is Instagram a

platform where people can share their own photos, but they also get to see their friends

photos in order to get the latest details on the exciting events going on in their lives. For

those who follow famous celebrity accounts, people can see what their favorite celebrities

are doing with their lives, which makes the public feel slightly less isolated from people

like Jennifer Aniston, Selena Gomez, Michael Phelps, and even the Pope. Because

companies know that these public figures are already influential, they have begun to use

Instagram as a platform for advertising. By doing so, the people that follow celebrities

can get the most recent news about which hair products, running shoes, makeup, and

sodas they all use. As stated earlier, these testimonials are almost never testimonials at

all, but instead are staged advertisements. While some viewers may realize what is going

on, those who are viewing these ads on Instagram are typically younger and, therefore,

may not know that its all a faade. There are few academic journals that discuss

Instagram directly and its important that academics address this specific platform

because it has, in fact, changed the way consumers see advertisements as well as the way

companies advertise their products.

 Works Cited

1. Agrawal, Jagdish, Wagner, A. Kamakura. The Economic Worth of Celebrity

Endorsers: An Event Study Analysis. Journal of Marketing. 59. No. 3. 1995. 56-

62.
2. Ahmad, Irfan. Timeline of Instagram from 2010 to Present. Social Media Today.

http://www.socialmediatoday.com/content/timeline-instagram-2010-present-

infographic. 7 January 2014.

3. Clark, C. R., Horstmann, I.J. A model of advertising format competition: on the

use of celebrities in ads. Canadian Journal of Economics. 46. No. 4. 2013. 1606-

1636.
4. Curran, Kevin, Graham, Sarah, Temple, Christopher. Advertising on Facebook.

International Journal of E-Business Development. 1 No. 1. 2011. 26-33.

5. Dzisah, W. E., Ocloo, C. E. Celebrity Endorsement and Consumer Buying

Behaviour. European Journal of Business and Management. 5. 2013. 197-208.

6. Garthwaite, C.L. Demand Spillovers, Combative Advertising, and Celebrity

Endorsements. American Economic Journal: Applied Economics. 6. No. 2. 2013.

76-104.
7. Maheshwari, S. Endorsed on Instagram by a Kardashian, but is it Love or Just an

Ad? New York Times. 30 August 2016. A1.

8. Maheshwari, S. Statement on Trump puts New Balance Shoe Company in Cross

Hairs New York Times. 15 November 2016. B9.

9. Parker, Sydney. A Long List of Instagram Statistic That Marketers Need to

Know. Hootsuite. https://blog.hootsuite.com/instagram-statistics/. 3 November

2016.
10. Pew Research Center. Instagram Demographics. Pew Research Center.

http://www.pewinternet.org/2015/08/19/mobile-messaging-and-social-media-

2015/2015-08-19_social-media-update_09/. 17 August 2015.

11. Poghosyan, Anna. Celebrity Endorsement as One of Nowadays Major Ways to

Influence Consumer Buying Behavior. European Scientific Journal. 2015

12. Sokolovska, A. Impact of Celebrity Endorsement on Consumer Buying

Behavior. Guided Selling. SmartAssistant. http://www.guided-selling.org/impact-

of-celebrity-endorsement-on-consumer-buying-behavior/. 19 January 2017.

 Reflection

I think that starting this project was difficult, but revising it was much easier. At first, I

wasnt sure how to even construct my argument, let alone write the whole paper. I found

that it was best to take the concrete ideas that I had and set them up into simple

paragraphs that elaborated on that certain aspect. I think this was useful to me because it

helped me get a better look at all of the ideas I would be using to make my claims. Using

the peer review groups was very helpful because it gave two other perspectives from

people that we dont know well and therefor dont have a biased opinion of our writing. I

know that I have the potential to be a great writer, but sometimes I cannot critique my

own writing because it is simply too close to home. Even when I step back I have an

issue with finding the pitfalls in my own work. For me, the hardest part of my writing

process is articulating my thought process into words. I have had this issue since high

school, so I am well aware of it. I have great ideas, however, so when I finally decide

how I can put them onto paper, I am able to produce a clear and eloquent argument.

Structuring this project was slightly difficult because it wasnt a typical five-paragraph

structure that I have been used to using in my English classes. I was able to learn a lot of

digital news as well as my topic specifically through writing this paper. I learned that the

spread of news via the Internet greatly affects celebrity endorsements. Because people

use the Internet every day, multiple times a day, digital news platforms like social media

give companies access to millions of people at a time. This allows companies to reach out

to a variety of potential customers, rather than just their current customers or people of

the same demographic. Overall, I think that this paper went well and I was able to find a

variety of helpful sources to use in the construction of my argument. Not only was I able
to find academic journal articles, but I was also able to find an academic demographics

page from Pew Research Center, which helped a lot. I was also able to find a few great

newspaper articles online as well as some interesting blog posts. I found it interesting, yet

surprising that there were so many helpful sites that covered my topic. I do think,

however, that finding seven academic sources on my topic that I could actually use was

very difficult. I know and understand that it is necessary to have a variety of reliable and

credible sources, but I dont think that finding 7 journal articles were necessary for the

construction of this paper. It was difficult to find academic sources on my topic

specifically so I ended up having to find articles about celebrity endorsement and other

forms of social media, which I then related to my topic to the best of my ability. Not only

was it difficult to find good academic sources, but also even with only five academic

sources, I felt that this paper was strong enough. I believe that my development

throughout this writing process will help me in any future writing assignments that I have

to do for other courses. I have learned how to evaluate my sources more than I had ever

previously done as well as how to find academic sources through great databases such as

JSTOR and EBSCO. I also learned that not all sources are created equally. I think that

while the majority of academic authors are intelligent, they are not always the best person

to be writing on a certain subject. I was able to go through a process of elimination when

finding sources by picking and choosing which authors covered my topic to the extent

that I needed them to. I think that writing this paper has given me a lot of freedom as to

how Ive been able to address my topic, explain the issue at hand, and make an argument

regarding what I think about it. As a whole, I believe that it all came together smoothly
and all of the things that I struggled with eventually worked themselves out by the end of

the process.