Opposing Influences of YouTube Influencers: Purchase and Usage Effects in the Video Game Industry

Abstract

Influencers promote firms' products by posting content such as videos on social media platforms. For entertainment products, these posts could substitute or complement demand for the original entertainment product. We study video games, the largest entertainment product category comprising 1/3 of YouTube traffic, using a large daily panel data set on thousands of video games. Leveraging a supply shock on YouTube called the "Adpocalypse", we measure the impact of influencer videos on purchase and usage of games. We provide evidence that on average influencer video posts substitute to video games for purchases but complement for usage. We also find that influencer effects differ across firms. Managers can use these results to align the influencer effects they face with their revenue models, such as using in-game purchases or a subscription model when facing complements on usage.

Keywords: Influencer marketing, Natural experiment, YouTube, Video games, Adpocolapse