Influencer Marketing

Prof. Zijun Tian

Olin School of Business
Washington University in St. Louis
Influencer marketing
Used by more 90% of marketers and a $16.4 billion industry

+ x x

Key issue: Influencer selection!

What makes an influencer campaign work?

How many?
Contracts
Match with brand
Influencer experience
Content & follower quality
How popular?
What makes an influencer campaign work?

How many?
Contracts
Match with brand
Influencer experience
Content & follower quality
How popular?
What makes an influencer campaign work?

How many?
Contracts
Match with brand
Influencer experience
Content & follower quality
How popular? Reach & Cost
What makes an influencer campaign work?

How popular? Reach & Cost

79K followers 1.5M followers 8.6M followers 16.7M followers
26K impressions 850K impressions 455K impressions 1.3M impressions
Tian, Z., Dew, R., & Iyengar, R. (2023)

How popular of an influencer should firms

sponsor?

• Machine learning based two-step causal inference framework

• Key result: follower elasticity of impressions (FEI)
• Managerial insights from the heterogeneous FEIs
• Systematic evaluation of firms’ influencer sponsorships
Data
The Discover page of TikTok
What we collect…
• All hashtags from Oct 2020 to Apr 2021
(200+ in total with 30 campaign #s)

• All videos posted under each hashtags

(0.5M+ in total & a valid IV)

• All tracked from their introduction to

maturity (day-0 #followers & day-14
#impressions)
Correlational Relationship

Flat for 50-1M?

The Causal Question

1 Nonlinear treatment effect

Video ？
2 The key confound of content
2 4
3
3 Heterogeneity of the relationship #followers 1 #impressions

4 Unobserved confounders
The Causal Question

1 Nonlinear treatment effect

Video ？
2 The key confound of content
2 4
3
3 Heterogeneity of the relationship #followers 1 #impressions

4 Unobserved confounders
Step 1: Video Analysis
tit for #cat #pet #funny #cute

Input 𝒙 Encoder
Encoded Text
Words Word Embeddings

Concatenate
Domain
Encoded Image Main 256 Unified
Visual Features Encoder
Encoder Representation
Audio Features Layers
Encoded Audio Layers
Editing Features (FC, LSTM)
@Heinz Kiessling & …
Encoded Editing
𝝁𝒛|𝒙
Decoded Text 𝝈𝒛|𝒙
Words Domain Sampled
Decoded Image
Visual Features Decoder Latent
Audio Features Layers Decoded Audio Vector
Editing Features (FC, LSTM) 𝒛
Decoded Editing
$
Reconstructed 𝒙 Decoder
Step 2: Causal Inference

• Counterfactual prediction function

• Slope under the log-log scale

% change in # impressions w.r.t. 1 % change in # followers

Follower Elasticity of Impressions (FEI)

On Average
Correlational

4K

Positive Inverted U-shaped S-shaped

Heterogeneity: Engagement Tactics
Across Campaigns

S-shaped Special effects

Linear Self-expression

Product
Concave
demonstration
Optimal Influencer Selection: ASOS
MR(follower) = ∇#impressions/follower " $value/impression
MC(follower) = $cost/1K follower

Followers: MR > MC
But almost OPTIMAL!
Optimal Influencer Selection: Walmart
MR(follower) = ∇#impressions/follower " $value/impression
MC(follower) = $cost/1K follower

Mega influencers?
OPTIMAL only when…
Conclusions
• An important metric for optimizing partnership
strategies
• Follower elasticity of impressions (FEI)
• Representation learning + causal machine learning
• Content-based influencer recommendation
• Extensions
• Different marketing outcomes
• Firm-level difference
• Other heterogeneity in influencers
• Influencer portfolios
Summary

Three key things to think about influencer marketing:

• Influencer selection
• Influencer marketing content design
• Influencer e-commerce: content creators → retailers?