Research Details

Abstract

We study the effectiveness of influencer marketing in the video game industry. To this end, we collect novel high-frequency data from Twitch.tv, a major video game streaming platform, by monitoring live streams every 10 minutes for eight months. Using plausibly exogenous variation in the broadcast hours of Twitch influencers, we show that sponsored Twitch streams generate a small and short-lived increase in the number of players and game sales. We also show that sponsored streams encourage other influencers to broadcast the game organically, amplifying the initial effect of the sponsorship. Additionally, live streams serve as informative advertisements that benefit lesser-known games released by small publishers and games with appealing attributes. Combining these results, we provide back-of-the-envelope calculations showing that although sponsored live streams benefit some games, they are not worth the investment in most cases. This result questions the conventional wisdom that influencer marketing generates higher returns on investment than traditional advertising.

Type

Working Paper

Author(s)

Ilya Morozov, Yufeng Huang

Date Published

2022

Citations

Morozov, Ilya, and Yufeng Huang. 2022. Video Advertising by Twitch Influencers.

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