We developed an algorithm to predict the effect of influencer video ads on product sales. The algorithm computes a summary statistics that we term motion, which captures the spatio-temporal relationship between content engagement and product placement in a video. Analogous to a fundamental law in Newtonian mechanics, motion (sales) is generated when the object (product placement) is impressed with a force (content engagement) in the space and time (video). We tested the algorithm with an analysis of 40,000 influencer video ads on Douyin, the Chinese version of TikTok and the largest short video platform in the world. We exploit variation in video posting time to identify the causal effect of video ads on sales. Videos of higher motion are more effective in driving sales. This effect is sizable, robust, and is more pronounced among impulsive, hedonic, lower-priced products, and more informative ads. We trace the mechanism to influencers’ incentives to optimize for engagement rather than sales. We discuss how product sellers can use motion as a novel contractual lever to mitigate the agency problem for greater ROI.
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