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  • 2022
  • Working Paper
  • HBS Working Paper Series

Reputation Burning: Analyzing the Impact of Brand Sponsorship on Social Influencers

By: Magie Cheng and Shunyuan Zhang
  • Format:Print
  • | Language:English
  • | Pages:57
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Abstract

The growth of the influencer marketing industry warrants an empirical examination of the effect of posting sponsored videos on an influencer’s reputation. We collect a novel dataset of user-generated YouTube videos created by prominent English-speaking influencers in the beauty and style category. We extract a rich set of theory-driven video features and use DiNardo-Fortin-Lemieux reweighting to construct comparable treatment and control groups that are matched at the influencer-video level. A difference-in-differences analysis on the matched sample finds a reputation-burning effect: posting a sponsored video, compared to posting an equivalent organic video, costs the influencer 0.17% of their reputation (operationalized as the number of subscribers). The reputation-burning effect is stronger among influencers with larger audiences; an analysis of audience engagement and comment text reveals a larger gap in the audience’s response to sponsored vs. organic videos among influencers with larger (vs. smaller) audiences. The reputation-burning effect is mitigated when there is high fit between the sponsored content and the influencer’s “usual” content and when the promoted brand is less well-known. Our study empirically tests an assumption of several theoretical works, contributes to the literature on influencer marketing and celebrity endorsements, and provides managerial implications for influencers, brands, and social media platforms.

Keywords

Influencer Marketing; Social Influencers; Brand; Sponsorship; Video Analytics; Marketing; Brands and Branding; Media; Reputation

Citation

Cheng, Magie, and Shunyuan Zhang. "Reputation Burning: Analyzing the Impact of Brand Sponsorship on Social Influencers." Harvard Business School Working Paper, No. 22-067, April 2022.

About The Author

Shunyuan Zhang

Marketing
→More Publications

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  • Demand Interactions in Sharing Economies: Evidence from a Natural Experiment Involving Airbnb and Uber/Lyft By: Shunyuan Zhang, Dokyun Lee, Param Singh and Tridas Mukhopadhyay
  • Frontiers: Can an AI Algorithm Mitigate Racial Economic Inequality? An Analysis in the Context of Airbnb By: Shunyuan Zhang, Nitin Mehta, Param Singh and Kannan Srinivasan
  • AI Can Help Address Inequity—If Companies Earn Users' Trust By: Shunyuan Zhang, Kannan Srinivasan, Param Singh and Nitin Mehta
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