Navigating the Influencer Marketplace: How Influencers Adapt to Increased Sponsored Content

36 Pages Posted: 19 Oct 2023 Last revised: 11 Apr 2024

See all articles by Lanfei Shi

Lanfei Shi

University of Virginia - McIntire School of Commerce

Shu He

University of Florida - Information Systems and Operations Management

Sulin Ba

University of Connecticut School of Business

Date Written: September 26, 2023

Abstract

The prevalence of consumer-generated content on social media platforms has successfully attracted brands to collaborate. While social media platforms have started to develop open-access marketplaces, such as BrandConnect on YouTube, to facilitate the matching between brands and influencers, it is unclear how a marketplace entry like this will impact influencers and their content generation. In this study, we seek to fill this gap by exploring an exogenous marketplace launch on a popular social media network. Our findings show that this marketplace launch results in a redistribution of the sponsorships among influencers of varying fan sizes. Specifically, medium-tier influencers (e.g., micro- and nano-influencers) receive more sponsorship after the marketplace’s entry compared to high-tier influencers, due to reduced search costs. Interestingly, we also discover that these medium-tier influencers proactively post more organic content and further diversify their topics in response to increased sponsored collaborations. Additional empirical tests provide potential explanations for the observed behavioral change of medium-tier influencers--—they may aim to mitigate the potential reputation loss driven by increased sponsored content. Our findings contribute to the literature on influencer marketing and provide business implications for both the platform and its stakeholders.

Keywords: Social media; Influencer marketing; Two-sided marketplace; Sponsored content; Content creation

Suggested Citation

Shi, Lanfei and He, Shu and Ba, Sulin, Navigating the Influencer Marketplace: How Influencers Adapt to Increased Sponsored Content (September 26, 2023). Available at SSRN: https://ssrn.com/abstract=4583835 or http://dx.doi.org/10.2139/ssrn.4583835

Lanfei Shi (Contact Author)

University of Virginia - McIntire School of Commerce ( email )

125 Ruppel Dr
Charlottesville, VA 22904-4173
United States

Shu He

University of Florida - Information Systems and Operations Management ( email )

Warrington College of Business
ISOM Department STZ
Gainesville, FL 32611-7169
United States

Sulin Ba

University of Connecticut School of Business ( email )

368 Fairfield Road
Storrs, CT 06269-2041
United States

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