EXPRESS: Mega or Micro? Influencer Selection Using Follower Elasticity

Influencer marketing, in which companies sponsor social media personalities to promote their brands, has exploded in popularity in recent years. One common criterion for selecting an influencer partner is popularity. While some firms collaborate with “mega” influencers with millions of followers, other firms partner with “micro” influencers with only several thousand followers, but who also cost less to sponsor. To quantify this trade-off between popularity and cost, we develop a framework for estimating the follower elasticity of impressions, or FEI, which measures a video’s percentage gain in impressions (i.e., views) corresponding to a percentage increase in the number of followers of its creator. Computing FEI involves estimating the causal effect of an influencer’s popularity on the view counts of their videos, which we achieve through a combination of: (1) a unique dataset collected from TikTok, (2) a representation learning model for quantifying video content, and (3) a machine learning-based causal inference method. We find that FEI is always positive, averaging 0.10, but often nonlinearly related to follower size. We examine the factors that predict variation in these FEI curves and show how firms can use these results to better determine influencer partnerships.