Short video creation and traffic investment decision in social e-commerce platforms

Abstract

With the booming development of social e-commerce platforms, an increasing number of brand owners are embarking on short video marketing activities through these channels. Nevertheless, brand owners encounter numerous quandaries in determining the optimal short video creation effort and traffic investment when they opt to rely on their own capabilities or enlist Key Opinion Leaders (KOLs) for their short video marketing campaigns. Hence, this paper delves into the sensitive demand function for short video creation effort and traffic investment. Subsequently, it formulates optimization decision frameworks based on the brand owner's self-built or KOL's short video channel. Accordingly, we delineate the brand owner's short video channel preference, and further design coordination mechanisms for the KOL short video channel. The research results first indicate that a stronger KOL influence and a lower signing fee will help the brand owner gain more profit after introducing the KOL short video channel. Secondly, the KOL is inclined to invest less in short video creation and traffic investment when engaging in short video marketing compared to the brand owner. Fortunately, the ex-ante traffic investment cost-sharing and cooperative decision can incentivize them to intensify their endeavors in short video creation and investing in traffic. Finally, we design the ex-post traffic investment cost-sharing and co-creation value distribution mechanisms under the cooperative decision situations, both of which can realize Pareto improvement, and it suggests that using the latter one would be fairer for the brand owner and KOL.