Abstract

This study examines the effectiveness of traditional marketing versus influencer marketing in shaping consumer behavior, increasing engagement, and driving sales. While previous research has explored various digital marketing strategies, a direct, data-driven comparison between traditional and influencer marketing remains limited. Using theoretical models, case studies, and empirical data, this study investigates whether influencer marketing yields a higher return on investment than traditional advertising methods.

The study incorporates key economic theories, such as Sherwin Rosen's "Superstar" model, network effects, and the role of social proof in digital influence. Furthermore, it examines how consumer psychology, engagement metrics, and social media algorithms affect marketing effectiveness. To determine the impact of each strategy on revenue generation, regression analysis was conducted using Kaggle datasets containing sales data, marketing expenditures, and influence engagement metrics.

As a result of the findings, TV advertising remains the most significant driver of sales, while radio advertising has little impact. Indirect or engagement-focused rather than revenue-generating social media marketing may have an indirect or engagement-focused impact on sales. Influencer marketing did not show statistically significant effects on sales, which challenges the assumption that collaborations with digital personalities directly lead to higher revenues.

In spite of the enhancement of brand visibility and engagement, traditional marketing remains the most effective form of marketing when it comes to direct financial returns, according to these results. It argues that businesses should optimize marketing budgets by balancing influencing partnerships with conventional advertising strategies. In the digital age, marketing investment decisions should be refined based on longitudinal effects, platform-specific variation, and evolving consumer trends.

Advisor

Mellizo, Philip

Department

Economics

Disciplines

Business Administration, Management, and Operations | E-Commerce

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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