Advertising and Content Differentiation: Evidence from YouTube

Arbeitspapier

This paper studies the effect of advertising on content differentiation on YouTube, the second-most visited website in the world. I demonstrate that an exogenous increase in the feasible advertising quantity leads to a considerable decrease in the YouTubers’ probability to duplicate mainstream content, i.e., the type of content that attracts the largest number of views. The result is driven by an intuitive mechanism: Mainstream content is provided by many competing YouTubers; thus, viewers who perceive advertising as a nuisance – and therefore as an implicit price they have to pay – could easily switch to a competitor if a YouTuber increased her advertising quantity. Switching is less likely, however, if the YouTuber differentiates her content from the mainstream, gains market power in a niche, and thereby softens competition in the ad “price."

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 8697

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Information and Product Quality; Standardization and Compatibility ; Entertainment; Media ; Information and Internet Services; Computer Software
• Subject: advertising ; content differentiation ; economics of digitization ; horizontal product differentiation ; long tail ; media diversity ; user-generated content ; YouTube

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kerkhof, Anna
• Event: Veröffentlichung
• (who): Center for Economic Studies and Ifo Institute (CESifo)
• (where): Munich
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/229515
• Last update: 10.03.2025, 11:45 AM CET