Advertising and Content Differentiation: Evidence from YouTube

Anna Kerkhof

No 8697, CESifo Working Paper Series from CESifo

Abstract: Many media outlets depend on advertising revenue to finance their operations, but the effect of advertising on media outlets’ content choice is largely unexplored. This paper exploits two institutional features from YouTube to show that an exogenous increase in advertising quantity induces YouTubers to differentiate their video content from their competitors. A plausible mechanism is that YouTubers avoid competition: Viewers typically perceive advertising as a nuisance and therefore as an implicit price they have to pay; thus, they could switch to a competitor if a YouTuber increased her advertising quantity. This is less likely, however, if the YouTuber differentiates her content from the mainstream and moves to a niche.

Keywords: advertising; content differentiation; economics of digitization; horizontal product differentiation; long tail; media diversity; user-generated content; YouTube (search for similar items in EconPapers)
JEL-codes: D22 L15 L82 L86 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-ind, nep-ore and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8697

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