Paid Ads Drive Purchases, but Instagram Amplifies Affiliate Marketing Impact on Lazada, Study Finds
A new study by researchers from UPN “Veteran” Jakarta reveals that paid advertising directly influences consumer purchase decisions on Lazada, while affiliate marketing becomes more effective when amplified through Instagram. The research was conducted by Sandya Aryasatya, Bernadin Dwi M., Maria Assumpta W., and Dea Delia Lestari from the Faculty of Economics and Business at UPN “Veteran” Jakarta, and was published in 2026 in the Indonesian Journal of Economic & Management Sciences (IJEMS). The findings highlight how different digital marketing strategies influence online shopping behavior in Indonesia’s rapidly expanding e-commerce market.
The study matters because Indonesia is one of the largest digital markets in Southeast Asia. As competition among e-commerce platforms intensifies, understanding how digital marketing tools affect purchasing decisions is increasingly important for businesses, marketers, and policymakers. The research suggests that companies like Lazada must rethink how they combine advertising, social media, and influencer-driven marketing to remain competitive.
Rapid Growth of E-Commerce and Rising Competition
Indonesia’s e-commerce sector has expanded dramatically over the past decade, driven by widespread internet access, smartphone adoption, and shifting consumer habits toward online shopping. More than 178 million Indonesians now use e-commerce platforms, making the country one of the largest digital consumer markets in Southeast Asia.
However, growth has also intensified competition among platforms. Lazada, an early pioneer in Indonesia’s e-commerce industry since 2012, now faces strong competition from rivals such as Shopee and Tokopedia. Traffic data has shown declining visits to Lazada compared with competitors, signaling weakening consumer engagement and brand visibility.
At the same time, social media has become a central channel for digital marketing. Instagram alone has more than 100 million users in Indonesia, making it a powerful platform for advertising, influencer promotions, and affiliate marketing programs.
These trends prompted the UPN “Veteran” Jakarta researchers to examine how paid advertising and affiliate marketing affect consumer decisions, particularly when Instagram acts as an intermediary between marketing content and purchasing behavior.
Research Method: Survey of Lazada Consumers
The research team conducted a quantitative survey study involving 174 respondents who had purchased products on Lazada within the previous six months and were living in Jakarta.
Participants completed questionnaires using a five-point Likert scale to evaluate their perceptions of:
- Paid advertising
- Affiliate marketing
- Instagram as a social media platform
- Their purchasing decisions on Lazada
The researchers analyzed the data using Partial Least Squares–Structural Equation Modeling (PLS-SEM) with SmartPLS 4 software, a statistical method commonly used to evaluate relationships between multiple variables in marketing research.
The analytical process included two stages:
- Measurement model evaluation to confirm the reliability and validity of survey indicators.
- Structural model analysis to test the relationships among paid advertising, affiliate marketing, Instagram activity, and purchasing decisions.
Key Findings: Advertising Converts, Affiliates Influence Through Social Media
The study identified several important relationships among the marketing variables studied.
- Paid advertising directly increases purchases: Paid advertising showed a positive and statistically significant effect on purchase decisions. This indicates that well-targeted ads can effectively reach consumers who are already close to making a buying decision.
- Affiliate marketing does not directly drive purchases: Affiliate marketing—promotions carried out by influencers or creators earning commission—did not show a direct effect on purchase decisions in the study. However, its influence appears earlier in the customer journey by building awareness and interest.
- Instagram strongly mediates affiliate marketing: The research found that affiliate marketing significantly increases engagement on Instagram, which then indirectly influences purchasing decisions. In other words, affiliate promotions become effective when consumers interact with them through social media content, recommendations, or product reviews.
- Instagram also influences buying decisions: Instagram itself showed a significant impact on purchase decisions, indicating that consumers use the platform to gather information, evaluate products, and build trust before making online purchases.
- Paid ads do not benefit from Instagram mediation: Unlike affiliate marketing, paid advertising did not show a significant indirect effect through Instagram. Instead, paid ads tend to drive purchases through a direct conversion pathway.
The statistical model also demonstrated strong explanatory power. The independent variables explained 72.9% of the variation in social media engagement and 59.6% of the variation in purchase decisions, indicating that the model captured key drivers of online buying behavior.
Implications for Businesses and Digital Marketing Strategy
The findings provide several practical insights for companies operating in Indonesia’s e-commerce ecosystem.
- Paid advertising remains crucial for immediate conversions: Targeted advertising campaigns are effective for influencing consumers who are ready to buy, making them valuable for short-term sales performance.
- Affiliate marketing works best through social media ecosystems: Affiliate programs become more powerful when combined with platforms like Instagram, where influencers and creators can build trust and engagement with audiences.
- Social media is central to modern purchase decisions: Consumers increasingly rely on social media for product information, recommendations, and reviews before completing online purchases.
- Integrated marketing strategies are essential: Businesses should combine paid advertising for direct conversions with affiliate marketing for social influence and long-term engagement.
According to the researchers from UPN “Veteran” Jakarta, the results indicate that digital marketing effectiveness depends on aligning strategy with the strengths of each channel.
A key insight from the research states that Instagram plays a stronger mediating role in improving the performance of affiliate marketing than in strengthening paid advertising campaigns.
Broader Impact on the Digital Economy
The study offers valuable insights not only for Lazada but also for other e-commerce platforms, digital marketers, and policymakers.
For businesses, the research highlights the importance of social media-driven marketing ecosystems in shaping online consumer behavior.
For content creators and influencers, the results confirm that affiliate marketing programs can significantly influence consumer decisions when integrated with active social media engagement.
For policymakers and researchers, the findings contribute to the growing body of knowledge on digital marketing strategies in Southeast Asia’s rapidly evolving digital economy.
Author Profiles
- Sandya Aryasatya – Undergraduate researcher in Business and Economics, Faculty of Economics and Business, UPN “Veteran” Jakarta. Specializes in digital marketing and consumer behavior.
- Bernadin Dwi M. – Lecturer and researcher at the Faculty of Economics and Business, UPN “Veteran” Jakarta, with expertise in marketing management and digital marketing strategy.
- Maria Assumpta W. – Academic researcher at the Faculty of Economics and Business, UPN “Veteran” Jakarta, focusing on marketing research and consumer behavior analysis.
- Dea Delia Lestari – Researcher affiliated with the Faculty of Economics and Business, UPN “Veteran” Jakarta, specializing in digital marketing and e-commerce strategy.
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