Here's what you should learn from social media influencers for your own business marketing. Photo via Getty Images

Influencer marketing is booming, with companies allocating 10 to 25 percent of their advertising budgets to influencer-led strategies. Between 2016 and 2020, the number of sponsored posts rose from 1.26 million to 6.12 million, and overall spending in the past few years has grown by billions.

When partnering with online ambassadors, brands certainly want a large influencer audience. However, audience size does not necessarily reflect the amount influencers are paid. Influencers with similar-sized audiences can be paid very different amounts.

That’s partly because brands also want an engaged influencer audience. An influencer may have many followers, but if those followers don’t actively interact with content, the influencer’s reach is limited. Engagement metrics like comments, shares and “likes” are often a more reliable indicator of impact than follower count alone.

The problem brands face — no matter who the influencer is — is that sponsored posts typically see a plunge in engagement, making it difficult to measure their success. Very little research examines this effect and how influencers can mitigate it.

In a new study, Rice Business professors Jae Chung and Ajay Kalra take up this issue, along with Stanford professor Yu Ding. According to the researchers, one way of boosting engagement overall, even on sponsored content where engagement often falls, is for influencers to increase audience perceptions of authenticity, perceived similarity, and interpersonal curiosity.

Even in a world full of filters and careful staging, authenticity is a key differentiator for leaders, businesses and personalities. One powerful way of appearing true to one’s own personality or character is to effectively share life stories. But social media influencers walk a fine line between presenting their authentic selves and monetizing their platforms.

To attract followers and content sponsors, influencers must curate the images they share, the words they say, and the timing and cadence of their posts. It’s a delicate dance between providing value through a genuine audience connection and aligning with brand interests.

Here are three simple but powerful ways that influencers can boost engagement by highlighting close relationships:

  • Post photos that include one or two close friends or family members.
  • Mention friends and family in the caption.
  • Use first-person language (e.g., “I,” “my” and “we”).

Referencing close social ties is an especially powerful way to boost engagement. According to Professor Chung, “Intimate social ties can make influencers seem more authentic and sponsored messaging seem less transactional.” This effect holds true even when controlling for variables like gender, frequency of posting, use of emojis and hashtags, and audience familiarity with the influencer.

The team analyzed over 55,000 Instagram posts from 763 top influencers during the second half of 2019. One of their most distinctive findings is that, in terms of boosting audience engagement, the ideal number of faces in a photo is three — the influencer plus two friends or family members. For an Instagram audience, this numerical face count proves a surprisingly effective metric for assessing the closeness of relationships.

Influencers can also seem more genuine to followers by referencing intimate social ties in their captions. Terms like “grandpa,” “bestie” and “soulmate” give followers access to an inner circle usually reserved for loved ones, making them feel more connected and invested in the influencer’s world and worldview.

In one experiment, study participants were shown a series of Instagram posts supposedly written by actor Jessica Alba. Testing the impact of language on the perception of close ties, the researchers wrote three different captions for the same image. One caption mentions Alba’s daughter (“Styling by my daughter. Isn’t this outfit cute?”). Another references a distant tie (“Styling by designer Kelmen. Isn’t this outfit cute?”). A third post provided a baseline by indicating no ties at all.

Study participants were asked to select which posts they liked most. The results supported the research hypothesis. Posts mentioning close relationships are significantly more likable than posts mentioning distant ties or no ties.

The team also examined the impact of expressing emotion on Instagram. Does sharing feelings — either positive or negative — help or hurt audience engagement? Using the Linguistic Inquiry and Word Count (LIWC) language processing program, the researchers categorized and analyzed the strength and valence of emotion-related words and emojis (e.g., “love,” “nice,” “frustrated,” “sad”).

What they found is surprising. Expressing emotion boosts audience engagement, perhaps because it bridges a perceived gap of celebrity between influencer and audience. But what’s interesting is that negative emotions are more powerful than positive ones. According to the researchers’ dataset, negative emotions are expressed only 9.08 percent of the time, while positive feelings are shared 36.03 percent of the time. So, one way of interpreting the finding is that the comparative rarity of negative feeling could take some readers by surprise, and thereby incite a stronger sense of authenticity.

Importantly, all of these findings regarding audience engagement most likely apply to platforms where a gray line exists between private and public life.

And, on this note, the researchers warn against the potential for oversharing and exploiting family and friends for the sake of monetizing content.

But the study shows how brands can strategically sponsor posts that incorporate close ties in photos, express emotion, or share anecdotes in first-person language.

By quantifying tactics to achieve a greater perception of authenticity, the research provides valuable guidance on how to cut through the noise on social media. One of the paths to a more engaged audience, it turns out, runs through an influencer’s inner circle.

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This article originally ran on Rice Business Wisdom and was based on research from Jaeyeon (Jae) Chung, an assistant professor of marketing at Rice Business, Yu Ding an assistant professor of marketing at Stanford Graduate School of Business, and Ajay Kalra, the Herbert S. Autrey Professor of Marketing at Rice Business.

Investors gravitate toward funds ending in the number zero over those ending in the number five, a Rice University researcher finds. Because of this tendency, some investors expose themselves to financial risk and loss of wealth. Photo via Getty Images

Rice University research finds that investors might have a bias towards the number zero

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When the Dow Jones Industrial Average hit 18,000 a few years back, the nicely rounded number dominated the news. When teens take the SAT, those who just miss scoring a round number are more likely to seek a do-over. And, research shows, major league baseball players are four times more likely to end their seasons with a .300 batting average than a .299.

There's something irresistible about figures ending in zero. But does that extend to our decision-making? Does our instinctive love for round numbers affect our financial plans?

The answer is yes, says Rice Business professor Ajay Kalra. Along with Xiao Liu of NYU Stern and Wei Zhang of Iowa State University, Kalra looked at data from thousands of investors in Target Retirement Funds (TRFs), which generally assume retirement at age 65 and ask employees to pick a fund with a year ending either in zero or five (e.g., 2040, 2045) that is nearest to their planned retirement date.

Investors whose birth year doesn't already end in zero or five must round up or round down to choose their TRF.

The zeros clearly win investors' hearts. Succumbing to what the researchers call "zero bias," investors consistently choose to sink their retirement dollars into funds that end in zero, not five. For many of the investors Kalra and his team looked at, especially older people, men and those with higher incomes, this meant choosing a retirement age of 60 or 70 rather than the standard 65.

The choice was often costly. Many investors who rounded up or down to find a fund year ending in zero exposed themselves to real financial risk.

That's because TRFs are graded portfolios — meaning they start out stock-heavy, move to a mix of stocks and bonds and finally emphasize bonds. Investors who rounded down for a too-young retirement target gave themselves less time to benefit from a stock-dominant portfolio. Investors who rounded up for a too-old retirement target ending in zero contributed less money to their retirement because they assumed they had more time to invest. Investors who rounded down did worse than those who rounded up.

Who is most susceptible to losing hard-earned retirement dollars this way? The researchers looked at people born from the 1950s through the 1980s. Of these investors, those born in years ending between three and seven selected the appropriate fund. The zero bias was prevalent in those born in years ending in eight or nine, who tended to project their retirement age as 60, and those born in years that ended in zero, one or two, who favored retiring at 70.

Overall, the researchers discovered, 34 percent of people born in years ending in eight or nine picked retirement funds that targeted too-early retirement — and ended up financially worse off. Meanwhile, 29 percent of investors born in years ending in the numbers zero, one or two picked later TRFs. With the exception of those who were risk averse, these investors ended up better off than those who chose too-early TRFs. Overall, however, investors who picked funds with mismatched retirement dates (that is, inconsistent with retirement at 65), saw more losses than gains.

The infatuation with zero held up even when the researchers replicated their study in an experimental setting. So they tried something different: they presented participants with math problems to coax a "calculative mindset." It worked. Rather than gravitating to zeros, these investors chose retirement funds that matched their ages. Straight talk in the form of a 30-minute one-on-one financial planning session helped too. At least some investors who got this counseling made better choices.

Rounding up or down to zero can be a nice mental shortcut when stakes are low and time is short. There are good reasons, for example, to go for the zero in calculating sales tax when you're buying a book, or tallying how many party guests want cake.

But when it comes to life savings, instinct-based math can be trouble. Financial firms should be aware of this and discourage preference for the shiny number zero. Advisors should nudge clients toward funds that will truly enhance earnings. Most important, however, investors themselves need to keep their heads, think of the future and resist the allure of round numbers.

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This story originally ran on Rice Business Wisdom. It's based on research by Ajay Kalra, a professor of marketing at Jones Graduate School of Business at Rice University.

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2 Houston space tech cos. celebrate major tech milestones

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Two Houston aerospace companies — Intuitive Machines and Venus Aerospace — have reached testing milestones for equipment they’re developing.

Intuitive Machines recently completed the first round of “human in the loop” testing for its Moon RACER (Reusable Autonomous Crewed Exploration Rover) lunar terrain vehicle. The company conducted the test at NASA’s Johnson Space Center.

RACER is one of three lunar terrain vehicles being considered by NASA for the space agency’s Artemis initiative, which will send astronauts to the moon.

NASA says human-in-the-loop testing can reveal design flaws and technical problems, and can lead to cost-efficient improvements. In addition, it can elevate the design process from 2D to 3D modeling.

Intuitive Machines says the testing “proved invaluable.” NASA astronauts served as test subjects who provided feedback about the Moon RACER’s functionality.

The Moon RACER, featuring a rechargeable electric battery and a robotic arm, will be able to accommodate two astronauts and more than 880 pounds of cargo. It’s being designed to pull a trailer loaded with more than 1,760 pounds of cargo.

Another Houston company, Venus Aerospace, recently achieved ignition of its VDR2 rocket engine. The engine, being developed in tandem with Ohio-based Velontra — which aims to produce hypersonic planes — combines the functions of a rotating detonation rocket engine with those of a ramjet.

A rotating detonation rocket engine, which isn’t equipped with moving parts, rapidly burns fuel via a supersonic detonation wave, according to the Air Force Research Laboratory. In turn, the engine delivers high performance in a small volume, the lab says. This savings in volume can offer range, speed, and affordability benefits compared with ramjets, rockets, and gas turbines.

A ramjet is a type of “air breathing” jet engine that does not include a rotary engine, according to the SKYbrary electronic database. Instead, it uses the forward motion of the engine to compress incoming air.

A ramjet can’t function at zero airspeed, so it can’t power an aircraft during all phases of flight, according to SKYbrary. Therefore, it must be paired with another kind of propulsion, such as a rotating detonation rocket engine, to enable acceleration at a speed where the ramjet can produce thrust.

“With this successful test and ignition, Venus Aerospace has demonstrated the exceptional ability to start a [ramjet] at takeoff speed, which is revolutionary,” the company says.

Venus Aerospace plans further testing of its engine in 2025.

Venus Aerospace, recently achieved ignition of its VDR2 rocket engine. Photo courtesy of Venus Aerospace

METRO rolls out electric shuttles for downtown Houston commuters

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The innovative METRO microtransit program will be expanding to the downtown area, the Metropolitan Transit Authority of Harris County announced on Monday.

“Microtransit is a proven solution to get more people where they need to go safely and efficiently,” Houston Mayor John Whitmire said in a statement. “Connected communities are safer communities, and bringing microtransit to Houston builds on my promise for smart, fiscally-sound infrastructure growth.”

The program started in June 2023 when the city’s nonprofit Evolve Houston partnered with the for-profit Ryde company to offer free shuttle service to residents of Second and Third Ward. The shuttles are all-electric and take riders to bus stops, medical buildings, and grocery stores. Essentially, it works as a traditional ride-share service but focuses on multiple passengers in areas where bus access may involve hazards or other obstacles. Riders access the system through the Ride Circuit app.

So far, the microtransit system has made a positive impact in the wards according to METRO. This has led to the current expansion into the downtown area. The system is not designed to replace the standard bus service, but to help riders navigate to it through areas where bus service is more difficult.

“Integrating microtransit into METRO’s public transit system demonstrates a commitment to finding innovative solutions that meet our customers where they are,” said METRO Board Chair Elizabeth Gonzalez Brock. “This on-demand service provides a flexible, easier way to reach METRO buses and rail lines and will grow ridership by solving the first- and last-mile challenges that have hindered people’s ability to choose METRO.”

The City of Houston approved a renewal of the microtransit program in July, authorizing Evolve Houston to spend $1.3 million on it. Some, like council member Letitia Plummer, have questioned whether microtransit is really the future for METRO as the service cuts lines such as the University Corridor.

However, the microtransit system serves clear and longstanding needs in Houston. Getting to and from bus stops in the city with its long blocks, spread-out communities, and fickle pedestrian ways can be difficult, especially for poor or disabled riders. While the bus and rail work fine for longer distances, shorter ones can be underserved.

Even in places like downtown where stops are plentiful, movement between them can still involve walks of a mile or more, and may not serve for short trips.

“Our microtransit service is a game-changer for connecting people, and we are thrilled to launch it in downtown Houston,” said Evolve executive director Casey Brown. “The all-electric, on-demand service complements METRO’s existing fixed-route systems while offering a new solution for short trips. This launch marks an important milestone for our service, and we look forward to introducing additional zones in the new year — improving access to public transit and local destinations.”

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This article originally ran on CultureMap.