Virtual Quant Marketing Seminar - Daniel Ershov

The Effects of Influencer Advertising Disclosure Regulations: Evidence from Instagram

Dear All,

Our next Virtual Quant Marketing Seminar is Monday, April 5 at Noon ET. The speaker will be Daniel Ershov.

The zoom link is:
https://mit.zoom.us/j/94690123932?pwd=NjlUeTV0bk9HeTZVYllYY2hXbGhWUT09

The Effects of Influencer Advertising Disclosure Regulations: Evidence from Instagram (with Matthew Michell)

We study the effects of advertising disclosure regulations in social media markets. Theory generates ambiguous predictions about the effects of regulations on the equilibrium amount of advertising content, user engagement and welfare. Using data from a large sample of Instagram influencers in Germany and Spain and a difference-in-differences approach, we empirically evaluate the effects of German disclosure regulations on post content and follower engagement. We measure whether posts include suggested disclosure terms and use text-based approaches (keywords, machine learning) to assess whether a post is sponsored. We show a substantial adoption of disclosure after regulations, but also an increase in sponsored content including undisclosed sponsored content. We also find reductions in engagement, suggesting that followers were likely negatively affected.