Wednesday, July 18, 2018

Matching endorsements to endorsers

The NY Times reports on speed dating of Youtube influencers and brands (and on newly relevant "moral turpitude" clauses concerning both parties):

Inside the Mating Rituals of Brands and Online Stars
By Daisuke Wakabayashi

"Recently at the Anaheim Convention Center, about 50 people entered a room decorated as a stylish lounge for a speed dating event. They moved from table to table every 20 minutes, exchanging small talk and getting to know each other.
But the participants were not looking for love. They were YouTube stars and marketing executives from companies like Uber and Amazon seeking an advertising union.

"Deals between big brands and viral online video performers, once an informal alternative to traditional celebrity sponsorships, are quickly maturing into a business estimated to reach $10 billion in 2020.
"As the attention and money paid to stars on sites like YouTube and Instagram balloon, the stakes for both them and the brands to find the right match are rising. The speed dating event, held during VidCon, the online video industry’s annual convention, was one way the two sides are testing each other out.
"Most advertising deals with YouTube or Instagram stars now include a “morality clause.” One such agreement, shown to The New York Times, stated that a creator would agree to take down any content within 12 hours if the brand determined that the talent had promoted a competing product, posted “racy content” on social media or performed “an act of moral turpitude.”
Increasingly, [an agent] wants the same right for his clients because they have just as much to lose if a company becomes embroiled in scandal, such as the right to take down a video sponsored by a company if that brand’s executives are caught sexually harassing staff."

Update: and here's a recent paper on the subject:

The Market for Influence
39 Pages Posted:  

Itay P Fainmesser

Johns Hopkins University - Carey Business School

Andrea Galeotti

University of Essex
Date Written: July 3, 2018


Influencer marketing is the fast growing practice in which marketers purchase product endorsements from influencers, who are individuals with many followers and strong reputations in niche markets. This paper develops a model of the market interactions between influencers, followers and marketers. Influencers trade-off the increased revenue they obtain by posting more paid endorsements, with the negative impact that this has on their followers’ engagement, which in turn affects the price marketers are willing to pay for their endorsement. Our analysis provides testable predictions on how the price that influencers receive depends on the size of their audience, and how an improvement in the online search technology affects influencers’ competition for followers and marketers. We show that, in equilibrium, over- and under-provision of paid endorsements coexist. We evaluate the strategic effects of recent, trans- parency motivated, policy interventions implemented by competition authorities in the US and Europe, requiring influencers to clearly mark the content that is sponsored by marketers.

No comments: