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

The growth of the influencer marketing industry warrants an empirical examination of the effect of posting sponsored videos on influencers' reputations. We collected a novel dataset of user-generated YouTube videos created by prominent English-speaking influencers in the beauty and style category. We extracted a rich set of theory-driven video features and used DiNardo-Fortin-Lemieux reweighting to construct comparable treatment and control groups matched at the influencer-video level. The empirical analysis of the matched sample revealed a reputation-burning effect; that is, posting a sponsored video, compared with posting an equivalent organic video, cost the influencers 0.19% of their reputation (operationalized as the number of subscribers). The reputation-burning effect was stronger among the influencers with larger audiences. An analysis of likes, comments, and comment texts revealed a larger gap in audience response between sponsored and organic videos among the influencers with larger (vs. smaller) audiences. The reputation-burning effect was mitigated when a high fit existed between the sponsored content and the influencer's “usual” content and when the promoted brand was less well known. Our study empirically tested the assumption of several theoretical works. Moreover, it contributes to the literature on influencer marketing and celebrity endorsements, and provides managerial implications for influencers, brands, and social media platforms.