Today in Digital Marketing - Deep Dive: Cracking the Code on Sponsored Videos

Starting point is 00:00:00 It's the season for new styles, and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first. Join free at Rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal.

Starting point is 00:00:28 Get the Rakuten app or join at Rakuten.ca. R-A-K-U-T-E-N dot C-A. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. It is Friday, December 8th. Today, sponsored videos have become an important marketing tool as the popularity of influencers has grown. In this special episode, I am speaking with a business scientist who says she's cracked the code for marketers. I'm Todd Maffin. That's ahead today in digital marketing.

Starting point is 00:01:21 So why the special episode? It doesn't happen very often, but maybe once or twice a year. There just isn't any interesting news to report. So today, we bring you a full length deep dive into how the design of a sponsored video affects consumer engagement. Lee Chen is a professor of marketing at Suffolk University in Boston. She and her colleagues recently published a paper in the Journal of the Academy of Marketing Science called What Drives Digital Engagement with Sponsored Videos? I spoke with her earlier and started by asking her whether sponsored videos were received more positively or more negatively by consumers in terms of their willingness to engage with them? Positively. So that's one of the interesting findings in our study.

Starting point is 00:02:14 So originally, we hypothesized a negative effect. We thought that clearly this closing sponsorship would hurt digital engagement. But our analysis shows the opposite. Why do you think that is? I think it indicates developments in influencer marketing in general, in the industry general, and also there is a change of consumer perception and attitudes towards sponsored videos. So maybe several years ago, when influencer marketing and sponsored content was still a new phenomenon, they were not familiar with sponsorships, right? They were not familiar with the collaboration between brands and influencers. Therefore, they expected that

Starting point is 00:03:00 influencers to only produce organic content. So that was the expectation. But nowadays, influencer marketing is very popular. It develops really fast. And sponsored videos also become very common. So viewers, well, general consumers, they are exposed to sponsored videos a lot right now. They watch these sponsor videos on YouTube, on different video sharing platforms. So now they gradually understand what the collaboration is. And as they become more familiar with sponsorships, as they become more familiar with this type of collaboration,

Starting point is 00:03:42 they gradually understand and accept this kind of collaboration. So they know that influencers need to make a living. They need to make money so that they can produce high quality content. Therefore, they are becoming more understanding and acceptable. But at the same time, there is this moral responsibility they expect. So they expect influencers to clearly disclose sponsorship. So that is what we believe the development in influencer marketing in general. And, you know, it doesn't surprise me that as influencers become more part of the marketing ecosystem, that consumers would think less negatively of it. What surprised me about your research was that, in fact, it went even beyond that. And people began thinking positively about the brand when an influencer was brought in.

Starting point is 00:04:33 That has something to do with authenticity. So now followers expect them to be honest, to be transparent. So if you are getting a sponsorship, just be transparent and be honest. Tell me you are getting this sponsorship. So I know I am fully informed about the content I'm going to watch. So that's some new moral responsibility. And also influencers are like their followers friends, right?

Starting point is 00:05:03 So there is this parasocial relationship going on. So I want the best for my friends. So if the influencer I like is getting sponsorship, I feel happy for them, right? So now you are funded and I feel happy. I even celebrate with them. Like, oh, congratulations, you are getting this sponsorship.

Starting point is 00:05:23 It's really a good thing. So that's another interesting finding in our study. with them. Like, oh, congratulations, you are getting the sponsorship. It's really a good thing. So that's another interesting finding in our study. Did your results differ when the platform was the one doing the disclosing? Like I'm thinking something like the little label that says sponsored post. Yes. So we looked into two types of disclosure. One is influencers' own disclosure in the video. The other one is platform-generated disclosure. So now large video sharing platforms like YouTube and Bilibili, it's the platform in our study, they all offer this new feature, this disclosure feature influencers can apply. So if you apply this feature, there would be a platform-generated label appear on your video. It says includes sponsored content or the content is sponsored

Starting point is 00:06:15 by which brand. So that's a platform-generated label. So our study indicates that when you combine both types of disclosure, you will have higher digital engagement. Yeah, the data set, as you mentioned, came from Bilibili. And I like to think that I'm pretty up to speed on apps, but this one was new to me. It's a Chinese app, I think. Can you describe it? It is. It is. It is a video sharing platform in China. And it's getting really popular in China in recent years, especially among younger people. It's like YouTube. So it's similar.

Starting point is 00:06:52 Like everybody can register and post their videos. So they provide YouTube style, this kind of service. But I think they are much more popular among younger people in China. How do you think your results would be different if you'd have tested on a more global app like TikTok or Instagram or YouTube? I think so. There is one thing we do want to we do want to mention in our sample. The average video length is seven minutes. So we study medium to long sponsored videos. And we think as long as the video is in similar context, our findings should be generalized to other platforms like YouTube.

Starting point is 00:07:36 But TikTok is different. TikTok is short videos, right? So the videos on TikTok are usually less than a minute. That would be a different context because in short videos, the amount of information you can include and the structure and the format may be very different. So our findings may not be directly transferable to these short video contacts. But in other platforms like YouTube, we do believe the findings can be generalized. Yeah, I mean, the strategies we study are general video design strategies. They are not country-specific or culture-specific. That's why we think the findings can be generalized. I know that scientists do not like talking about their gut feeling. They prefer data and things that can be proven. But I'm going to ask you for your gut feel on how you think the results would be on TikTok.

Starting point is 00:08:33 I think some of them may have similar impact. For example, disclosure. I think it could be similar because... In other words, positive for the brand. Yeah, I think it could be similar because... In other words, positive for the brand. Yeah, I think so. But in terms of customization and subjective endorsement, it may be different because in a one minute, let's say several seconds or one minute video, you can't customize, fully customize or partially customize the video for the brand, right? Or there is just the level will be different. So I would say customization, video customization,

Starting point is 00:09:12 and the type of endorsement may have different effects. Yeah, let's walk through, if we can, a couple of those kind of minute factors that are commonly included in these kind of videos. And you can tell me how they affect fact affect engagement you you mentioned high video customization so how does that affect it okay so let me first what video cost might explain what video customization is there are different types of sponsored videos at the lower customization level are shout-out videos. So influencers, they only mention the brand names or the product for several seconds at some time in their video. So the video content is basically not related to the sponsoring brand.

Starting point is 00:09:59 They just acknowledge the sponsorship. So that is shout-out videos. On the higher level of customization are dedicated videos. So the influencer may produce a video specifically for the brand, for example, a review video. So in the entire video, they talk about the product, the brand, the functions, the performance. So the entire video is specifically for the brand. That would be a highly customized video. So that's what video customization measures. And our finding is that higher level, higher level of customization would negatively impact digital engagement.

Starting point is 00:10:36 I've heard that, you know, just sort of anecdotally from marketers as well, that on TikTok, especially, and mind you, your findings were from a more of a YouTube type app, but that, you know, it's almost the ones that are just sort of thrown up, you know, by an influencer quickly that seemed to be more authentic, I guess. Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters.

Starting point is 00:11:13 Get customized coverage today, starting at $19 per month at zensurance.com. Be protected. Be Zen. It's the season for new styles, and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes.

Starting point is 00:11:31 You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first. Join free at Rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join at rakuten.ca. R-A-K-U-T-E-N.C-A. What about when the brand is mentioned early on in the video versus at the end of the video? Is there a difference there in your findings? Of course there is a difference. So based on our findings,

Starting point is 00:12:07 it's better to place the brand or talk about brand information at later stage in your video. So while you can clearly disclose sponsorship, but talk about the brand in the later part of your video is better for your engagement. And what about influencers' subjective endorsements, like sharing personal experiences or opinions about the sponsored product?

Starting point is 00:12:33 Yeah. So that's another interesting finding. There are, generally speaking, two types of information you can provide, right? One is subjective information, meaning that you talk about your own opinion, your own experience, your own thoughts about the brand. That's subjective. The other is objective. So you focus on the facts. You talk about the facts about the product. And in our study, we find that subjective endorsement, meaning that you talk about your own experience, your own thoughts

Starting point is 00:13:06 about the brand will negatively impact digital engagement. Oh, interesting. That surprises me. Yeah, that's also surprises us a little bit. The theory, so we believe it may be because that subjective endorsement is hard to verify. So it's your own experience. For example, I'm endorsing a snack and I'm telling you it's really delicious. You really should try it. That's my subjective opinion, right? But it's hard to verify.

Starting point is 00:13:38 As viewers, they just don't know. They don't know whether it tastes good or not. It's just your own opinion, your own thoughts. But objective information is verifiable. For example, this snack is made of organic ingredients. Then I can easily verify the information. But subjective endorsement is not. So if it cannot be verified, then viewers may become a little bit suspicious and they may feel, right, they may doubt. And that's why we think explains why the negative influence would appear. So the perfect influencer video then that a brand commissions would be one, if I have this right, where it's low production values, there's not a

Starting point is 00:14:25 lot of customization, the brand itself is not mentioned until the very end or close to the end, and the influencer stays away from their personal opinions about it. Is that a fair estimation of kind of the perfect video as per your findings? I wouldn't say it's a perfect video, but in terms of the digital engagement you can get, that would be better. How do you think that tracks against sales or conversions? Digital engagement is one thing and it's important, but it's a little bit different stage of the funnel than what most marketers are aiming for. Did you give any thought or find any data around how that digital engagement might translate into sort of objectives further down the funnel? That really is a great question. But in our data set, unfortunately, we do not have sales data because majority of the sponsor videos are awareness campaigns.

Starting point is 00:15:22 In other words, the brands, they want to increase the awareness of the brand. There are now sales campaigns. So that's why it's very hard to collect sales data. And in addition, sponsored videos are just a part of the promotion strategy, right? It's just a part of the marketing mix. And there are other factors may come into play. So it's really hard to link the influencer, the effect of the sponsored video directly to the sales data. But that would be great if further studies can look into that. And that's maybe our future studies. What surprised you the most out of your results? I would say disclosure. Even in practice, most influencers and sponsoring brands

Starting point is 00:16:06 are reluctant to clearly disclose this sponsorship or this collaboration, but we find the opposite. So that's why we think it's really surprising. And as we talked about earlier, it could be the development in influencer marketing industry in general, and also how people perceive sponsor content. So now they are more understanding and they are more familiar with this type of collaboration. So bottom line, how should marketers change how they work with influencers in light of your findings? Well, first of all, it's okay to disclose your sponsorship. So don't feel reluctant to clearly disclose the sponsorship or the collaboration. It's completely fine. Consumers understand and they also appreciate that if you clearly tell them that this is sponsored, that's one thing. And also for brand information, well, maybe move it to the later part of the video.

Starting point is 00:17:06 So you still can talk about the brand. But at the beginning, it's better to have the influencers own organic content and maybe talk about the brands later. And for customization, they just need to think about the objectives they would like to achieve in this campaign, this influencer marketing campaign. While it's still okay to produce customized videos, but maybe brands and influencers want to take the digital engagement into consideration. Whether the customization effort would pay, that's one thing they may want to think about. Finally, it's the subjective endorsement for influencers. It's pretty common for them to

Starting point is 00:17:49 talk about their own opinions and experience, but they may be careful. So it's okay to talk a little bit, but don't emphasize your own opinion or experience too much. Maybe also talk about the facts about the brands, not just your own opinion. Well, it is fascinating research. I'm delighted you could share it with us. Thank you so much for your time. Thank you for having me.

Starting point is 00:18:13 Li Chen is a professor of marketing at Suffolk University in Boston. Her paper is in the Journal of the Academy of Marketing Science. It's called What Drives Digital Engagement with Sponsored Videos. And that will do it for the week. Today in Digital Marketing is produced by EngageQ Digital on the traditional territories of the Sunimic First Nation on Vancouver Island.

Starting point is 00:18:33 Our production coordinators, Sarah Guild, are themes by Mark Blevis. Music licensing by Source Audio. Ad coordination by Red Circle. I'm Todd Mappin. Have a great weekend. See you on Monday. It's the season for new styles, and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores

Starting point is 00:19:17 on electronics, holiday travel, home decor, and more. It's super easy. And before you buy anything, always go to Rakuten first. Join free at rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join at rakuten.ca. R-A-K-U-T-E-N dot C-A.

Today in Digital Marketing - Deep Dive: Cracking the Code on Sponsored Videos

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