Advertising by Recruiting Influencers

Maya Jalloul and Vasiliki Kostami
Additional contact information
Maya Jalloul: HEC Paris
Vasiliki Kostami: HEC Paris

No 1454, HEC Research Papers Series from HEC Paris

Abstract: The persistent growth of social media platforms has allowed their users to view them as valuable information sources and firms to adopt them as effective marketing tools. Firms often seek to advertise their products through intermediaries called ``influencers'' who are viewed as less biased than the firms themselves in the advice they give. Another considerably unbiased source of information is reviews of past consumers. In this paper, we address some of the firm's challenges of influencer marketing and the effect of consumer reviews on the marketing decisions. We consider different types of influencers and different partnership schemes with them. First, we show that it is optimal for a firm to partner with a single influencer type through a single type of partnership when customers are equally likely to follow the same influencer. Second, we show that firms should advertise more in the presence of social learning. Third, we consider a society split into classes such that individuals are more likely to follow influencers from their class. We show that a diverse mix of marketing channels, in terms of the types of influencers or partnerships, may be optimal when the one influencer class has a more concentrated follower base than the other.

Keywords: influencer marketing; social learning; product diffusion (search for similar items in EconPapers)
JEL-codes: M30 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2022-03-28
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4043798 Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1454

DOI: 10.2139/ssrn.4043798

Access Statistics for this paper

More papers in HEC Research Papers Series from HEC Paris HEC Paris, 78351 Jouy-en-Josas cedex, France. Contact information at EDIRC.
Bibliographic data for series maintained by Antoine Haldemann ().