Clicks
Revenue Generation through Influencer Marketing
Maximilian Beichert et al.
Journal of Marketing, forthcoming
Abstract:
Direct-to-consumer (DTC) firms increasingly believe that influencer marketing is an effective option for seeding. However, the current managerially relevant question for DTC firms of whether to target low- or high-followership influencers to generate immediate revenue is still unresolved. In this article, the authors’ goal is to answer this question by considering for the first time the whole influencer-marketing funnel, i.e., from followers on user-generated content networks (e.g., on Instagram), to reached followers, to engagement, to actual revenue, while accounting for the cost of paid endorsements. The authors find that low-followership targeting outperforms high-followership targeting by order of magnitude across three performance (ROI) metrics. A mediation analysis reveals that engagement can explain the negative relationship between the influencer followership levels and ROI. This is in line with the rationale based on social capital theory that with higher followership levels of an influencer, the engagement between an influencer and his/her followers decreases. These two findings are derived from secondary sales data of 1,881,533 purchases and results of three full-fledged field studies with hundreds of paid influencer endorsements, establishing the robustness of the findings.
Paying Attention
Karthik Srinivasan
University of Chicago Working Paper, November 2023
Abstract:
Humans are social animals. Is the desire for attention from other people a quantitatively important non-monetary incentive? I consider this question in the context of social media, where platforms like Reddit and TikTok successfully attract a large volume of user-generated content without offering financial incentives to most users. Using data on two billion Reddit posts and a new sample of TikTok posts, I estimate the elasticity of content production with respect to attention, as measured by the number of likes and comments that a post receives. I isolate plausibly exogenous variation in attention by studying posts that go viral. After going viral, producers more than double their rate of content production for a month. I complement these reduced form estimates with a large-scale field experiment on Reddit. I randomly allocate attention by adding comments to posts. I use generative AI to produce responsive comments in real time, and distribute these comments via a network of bots. Adding comments increases production, though treatment efficacy depends on comment quality. Across empirical approaches, the attention labor supply curve is concave: producers value initial units of attention highly, but the marginal value of attention rapidly diminishes. Motivated by this fact, I propose a model of a social media platform which manages a two-sided market composed of content producers and consumers. The key trade-off is that consumers dislike low-quality content, but including low-quality content provides attention to producers, which boosts the supply of high-quality content in equilibrium. If the attention labor supply curve is sufficiently concave, then the platform includes some low-quality content, though a social planner would include even more.
Digital Engagement Practices in Mobile Trading: The Impact of Color and Swiping to Trade on Investor Decisions
Stephanie Grant, Jessen Hobson & Roshan Sinha
Management Science, forthcoming
Abstract:
As coined by the SEC, Digital Engagement Practices (DEPs) are visual cues and design features to engage investors on mobile trading platforms. With the rise of mobile stock trading, regulators and other capital market participants are concerned that these DEPs may cause retail investors to trade in ways they otherwise would not. Using an experiment, we examine the impact of two common DEPs in mobile trading platforms -- color (i.e., the use of green or red to indicate performance) and allowing investors to swipe versus click and confirm to execute trades. Drawing from prior research, we predict that the color associated with firm information will interact with how investors execute their trades to affect investment decisions. Consistent with expectations, results show that investors make the largest investment in a firm when they swipe to trade and firm information is colored green, relative to when they click and confirm to trade or firm information is colored red, holding firm economics constant. Swiping to trade causes investors to focus relatively more on the upside of investing, but only when firm information is colored green and not when it is colored red. The color red leads to a muted effect of swiping to trade as investors experience more negative affect and focus relatively more on the downside of investing. Our study answers calls from regulators and academics to examine the effects of technology on information evaluation in investment decisions, and has important practical implications for investors.
Top Rated or Best Seller?: Cultural Differences in Responses to Attitudinal versus Behavioral Consensus Cues
Aaron Barnes & Sharon Shavitt
Journal of Consumer Research, forthcoming
Abstract:
Marketers commonly use consensus cues about others’ behavioral choices (“Best Seller”) or their attitudes (“Top Rated”) when labeling products. This paper suggests that the effectiveness of these types of cues may differ across cultures in ways that carry implications for marketing practice. Prior research shows that in contexts that give rise to an interdependent cultural self-construal, choices are often responsive to social expectations rather than personal preferences. We propose that, because interdependents expect such behavioral conformity, cues that convey consensus about others’ choices may be less diagnostic and, thus, less persuasive than cues that convey consensus about others’ attitudes. Five studies examining cultural self-construal in multiple ways, along with two cross-national industry datasets, offer evidence consistent with this reasoning, suggesting that among interdependents, behavioral consensus cues can actually be less effective than attitudinal ones, reducing persuasion and willingness to pay. However, among independents, because attitudes are assumed to influence behavioral choices, whether the consensus cue is attitudinal or behavioral makes little difference.
The Value of Virtual Engagement: Evidence from a Running Platform
Che-Wei Liu et al.
Management Science, forthcoming
Abstract:
Fueled by remarkable developments in mobile and wearable technologies coupled with the power of the Internet a multibillion industry constructed on digital platforms, Connected Fitness, has emerged. Sustained engagement is a crucial prerequisite for healthy behavior, and platforms that offer connected fitness services must contend with the challenge of engaging new users. In this study, we examine whether a virtual race, an event in which runners can participate remotely in an organized activity, can serve as an effective strategy to amplify users’ long-term engagement related to healthy behavior. We study the impact of offering virtual races to runners on a digital fitness platform on their engagement with the platform and level of physical activity. Leveraging the match of the theme of the virtual races and users’ zodiac signs as the instrument to support causal inference, we find that a virtual race increases the engagement of new users by 42.8 days and total spending on related e-commerce on the platform by 48.4% during our study period. We also find that the positive impact of virtual races transcends the typical mechanism of social connections; results show that virtual races can increase the engagement with the platform even when their social connections are low. Finally, we find that existing users who participate in a virtual race outrun those in the control group by 4.41 km in a three-week period. Our study highlights the potential of new forms of digital interactions, powered by mobile and wearable technologies, on user behavior in fitness platforms.