Gauging the impact of video game influencers
Gauging the impact of video game influencers
September 6, 2023 | Professor Avery Haviv
It’s hard to overstate the growing impact of influencers on promoting products via social media platforms.
Since 2016, the use of influencer strategies to sell products across categories has increased ten-fold to $16.4 billion. Today, more than 90% of firms report spending more than 10% of their marketing budgets on influencer marketing.
In a recent paper, my co-authors and I zoom in on the effects of influencer-created videos on one industry: gaming. We first gathered data from Steam, the world’s largest PC gaming platform, to form a detailed picture of purchase and usage of more than 1,000 games by nearly 100,000 users. Then, we linked this individual-level data to more than 78,000 videos from the top 3,000 gaming channels on YouTube to gain a comprehensive picture of how influencer marketing affects the video game industry as a whole.
Here is what we discovered:
1) Video game influencers have a large and growing presence on YouTube.
If you are not a video game aficionado, you may be tempted to underestimate the sheer magnitude of influencer-created video gaming content on YouTube, the second most visited website after Google Search. Gaming-related videos, which typically feature someone recording themselves playing or reviewing a video game, account for one-third of YouTube’s total traffic. This content amounts to more than 50 billion hours viewed annually. There is an entire generation of people growing up with their primary media consumption being YouTube video game content, and there is no reason to assume that they will shift to more traditional media as they age. We expect to see gaming influencer content gain an even stronger foothold on YouTube over time.
2) Influencer-created YouTube videos on average increase game sales, but not as much as expected.
We concluded from our data that influencer-created YouTube videos increase the sales and usage of video game products. A YouTube video post created by a top influencer increases game usage and sales by 0.7% and 1.6%, respectively, on the date of posting. This effect lasts for several days before petering out. On average, influencer videos about video games serve as free advertising. To our surprise, though, we found that while usage spillovers (in other words, a player watching an influencer video about a video game and then playing that game) are universally positive, purchases are more of a mixed bag. Based on our estimates, 37% of videos have negative spillovers for purchases. In these cases, a player is less likely to buy a video game after watching an influencer video about it. If the story the influencer is telling is sufficiently engaging, our reasoning goes, the viewer feels like they played the game already and are less motivated to make a purchase.
3) “Adpocalypse” changed how influencers created videos.
In March 2017, the Wall Street Journal wrote a series of articles on how advertisements for the world's major brands were being played before morally objectionable content on YouTube. This article caused large advertisers to pull out of the platform en masse. This event came to be known as "Adpocalypse." In response, YouTube made several changes to the platform that content creators claimed made it much more difficult to upload and monetize their content. We find that this was the case. After Adpocalypse, content creators no longer increased their uploads after major content updates to video games.
4) Influencer-created video content may qualify as fair use.
Fair use, as defined in U.S. copyright law, governs the ability to use a copyrighted product without permission from the copyright holder. One of its legal requirements is that using content without permission enhances demand for the copyrighted product. Our research suggests that is the case with influencer videos on YouTube, so they may qualify for fair use. Currently, video game developers maintain the legal right to take all advertising revenues generated by videos featuring their content. Nintendo utilized these rights when it implemented the “Nintendo Creators Program,” where it took a 60% cut of all advertising revenue generated. However, developers would not have this right if influencer videos qualified for fair use.
5) Video game managers should adjust their business models based on the spillovers they experience.
Letting influencers take copyrighted content and use it for free usually leads to more usage and purchases, but not in every situation. If influencer content results in negative spillovers for purchases, video game managers may need to find ways to monetize usage. In our research, we found smaller positive spillovers for multiplayer and family games, so the managers of these games might consider restricting content use through tools like subscriptions and in-game revenues.
Avery Haviv is an Associate Professor of Marketing at Simon Business School.
Avery Haviv is an associate professor of marketing at Simon Business School.
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