Turning Content Creators into Partners : Economics of Platform-Led Affiliate Marketing
Recently, some user-generated content (UGC) platforms have begun providing shopping features, aiming to generate additional commission-based revenue from in-app transactions. In particular, the platforms allow creators to produce shoppable content (wherein promoted products are tagged with affiliate links) in exchange for taking a percentage of the commission that the creators receive from the merchants. Despite its growing popularity, the impact of such a business model on the key stakeholders (i.e., UGC platforms, content creators, and content consumers) has not yet been analyzed systematically in the literature. Through the lens of a game-theoretic model, this paper attempts to fill this important literature gap. Our results show that platform-led affiliate marketing can create a win-win situation for the UGC platform, creators participating in affiliate marketing, and content consumers. We also find that even creators ineligible for affiliate marketing can sometimes benefit from other creators’ participation. Moreover, surprisingly, we find that UGC platforms may not necessarily benefit from adopting this emerging business model due to the potential loss in their traffic revenue. Our findings have important managerial implications for UGC platforms on whether and how to leverage affiliate marketing. As for creators, our results show that they may be better off devoting less production effort when facing intensified competition. More importantly, creators’ optimal production decisions may vary drastically depending on the particular reasons (i.e., whether it be the increase in the number of creators or that in the content substitutability) that have caused the intensified competition on the platform. These findings provide meaningful implications for creators’ production strategies
Year of publication: |
2022
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Authors: | Gu, Meilin ; Liu, Dengpan ; Kumar, Subodha |
Publisher: |
[S.l.] : SSRN |
Description of contents: | Abstract [papers.ssrn.com] |
Saved in:
Extent: | 1 Online-Ressource |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 8, 2022 erstellt Volltext nicht verfügbar |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014242096
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