Prof. Reto Hofstetter will present the paper “Contract Design in Influencer Marketing”, co-authored with Andreas Lanz (University of Basel) and Navdeep Sahni (Stanford GSB).
In influencer marketing, the differing incentives of advertisers and influencers necessitate a delicate balance between control and creativity. Investigating this trade-off, we explore the impact of contractual constraints on advertiser outcomes, addressing the empirical challenges posed by the fact that contracts are rarely observed by researchers and are strategically offered by advertisers and selectively accepted by influencers.
Our analysis uses a unique dataset comprising a thousand contracts offered by hundreds of brands to thousands of influencers to examine the prevalent advertiser-imposed constraints. We relate this data to information on influencer participation and follower responses, assessing how contractual constraints influence these outcomes. Our findings demonstrate that influencers are significantly averse to contractual constraints, which create a relational cost for them.
Additionally, the audiences respond less favorably in terms of the advertiser’s outcomes to content produced under more restrictive conditions, implying a creativity suppression cost borne by the advertiser. A uniquely designed two-stage field experiment shows that the creativity suppression cost for advertisers outweighs the relational cost for influencers. Relaxing these constraints allows advertisers to triple their influencer retention rate within the same budget. We highlight the critical need for balancing managerial direction and influencer autonomy in designing influencer marketing campaigns.
Reto Hofstetter is Professor of Executive Education and Marketing at the University of St. Gallen. Before he was a Professor of Marketing and Institute Director at the Faculty of Economics and Management of the University of Lucerne and Associate Professor at the Università della Svizzera italiana (USI).
He visited the Wharton School and Stanford University among others as part of his research. Professor Reto Hofstetter received a PhD, MA, and BA in business administration and economics from the University of Bern Switzerland, and also a BA in computer science from the University of Applied Sciences of Bern.
Professor Hofstetter’s current research focuses on digital consumer behavior, AI in Marketing, crypto-marketing, NFTs, social media, influencer marketing, crowdsourcing, open innovation, digital self-presentation, -reporting and disclosure. His research has been published in top-tier academic journals, including the Journal of Marketing Research, Journal of Consumer Research, Management Science, the Proceedings of the National Academy of Sciences (PNAS), Journal of Business Ethics, International Journal of Research in Marketing, Marketing Letters, or the Journal of Product Innovation Management, among others, and has been repeatedly featured by Forbes, Harvard Business Review, or National Geographic.
He teaches courses related to Marketing Management, Digital Marketing, Pricing, Quantitative Marketing, Marketing Analytics and AI/ML/Data Science. His teaching was recently recognized by the Crédit Suisse Best Teaching Award.
The seminar will be held in English.
Major information: Daniela Bolzani (daniela.bolzani@unibo.it).