| Abstract: |
In influencer marketing, the differing incentives of advertisers and
influencers necessitate a delicate balance between control and creativity.
Investigating this trade-off, we explore the impact of contractual constraints
on advertiser outcomes, addressing the empirical challenges posed by the fact
that contracts are rarely observed by researchers and are strategically
offered by advertisers and selectively accepted by influencers. Our analysis
uses a unique dataset comprising a thousand contracts offered by hundreds of
brands to thousands of influencers to examine the prevalent advertiser-imposed
constraints. We relate this data to information on influencer participation
and follower responses, assessing how contractual constraints influence these
outcomes. Our findings demonstrate that influencers are significantly averse
to contractual constraints, which create a relational cost for them.
Additionally, the audiences respond less favorably in terms of the
advertiser’s outcomes to content produced under more restrictive conditions,
implying a creativity suppression cost borne by the advertiser. A uniquely
designed two-stage field experiment shows that the creativity suppression cost
for advertisers outweighs the relational cost for influencers. Relaxing these
constraints allows advertisers to triple their influencer retention rate
within the same budget. We highlight the critical need for balancing
managerial direction and influencer autonomy in designing influencer marketing
campaigns. |