As social media platforms expand, the influencer marketing industry is growing at a remarkable rate, and brands increasingly seek to work with influencers to promote their products. How is an influencer’s reputation affected when the influencer posts a sponsored video? To empirically examine this question, we collect a novel dataset of 85,692 user-generated YouTube videos created by 861 English-speaking influencers in the beauty and style category. We extract a rich set of theory-driven features from the videos and use DiNardo-Fortin-Lemieux reweighting to construct comparable (matched) treatment and comparison groups at the influencer-video level. A difference-in-differences analysis on the matched sample finds that on average, one sponsored video costs an influencer 0.17% of their reputation comparing to posting an organic video with equivalent video features. The adverse effect is least prominent for influencers with relatively low-celebrity status. We reason the potential mechanism is because low-status influencers receive more likes, more total comments, and more trust-related comments on sponsored videos than on equivalent organic videos. We also test video features as potential moderators of the negative treatment effect, and we find attenuation only with higher video clarity. 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 both influencers and social platforms.
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