Digital Economy: Advertising Platforms, Regulation, and User Behavior
Paper Session
Sunday, Jan. 5, 2025 1:00 PM - 3:00 PM (PST)
- Chair: Cristobal Cheyre, Cornell University
Digital Advertising Economy: Balancing Generated Content and Profitability
Abstract
This project explores the impact of digital monetization strategies on user-generated content (UGC) platforms such as YouTube and Instagram. These platforms play a crucial role in the advertising industry by facilitating collaborations between content creators and industrial sponsors for online media curation. The study investigates the effects of commission fee deductions on revenue sharing, including ad selection and revenue distribution. Surprisingly, more advertisers, particularly smaller firms, are transitioning to the deduction-based fee option for direct goods-selling links, leading to a larger influx of new advertisers. This shift concentrates the goods-selling market on specific popular products, amplifying direct sales on major online retailing sites. However, treated advertisers did not exhibit significant increases in orders or revenue sharing with creators but managed to save costs by sharing less with the platform. On the creators’ side, advertisers’ switching behaviors triggered more competition, resulting in a 3% increase in quality, indicating heightened effort with an additional 3 interactions per 100 viewers. In summary, while the platform’s design did not boost orders, it led smaller advertisers to concentrate on specific goods. Advertisers’ switch to deduction fees increased competition among creators, enhancing content creation quality.Gender Bias, Feedback, and Productivity
Abstract
I explore how gender biased feedback affects the productivity of workers in an online labor market. Using a design change on YouTube where the platform removed public displays of how often a video has been disliked, I show that - while dislike counts were public - female content creators received significantly more negative feedback on comparable content than male content creators. This gender gap in negative feedback is eliminated after the design change. Using detailed video- and channel- level data and a fuzzy difference-in-differences identification strategy, I show that the removal of excess negative feedback significantly and persistently increased the productivity of female content creators and consumer demand for their content. Relative to men, women produce 8.4 percent more videos after the platform design change. The increase in productivity coincides with an even larger increase of 15.5 percent in demand for content produced by women. Investigating mechanisms, I show that the reduction in negative feedback is primarily driven by changes in the upper tail of the distribution of dislikes and is consistent with the platform's objective of reducing harassment through "dislike attacks". Finally, I show that there are limited spillover effects on toxicity in other feedback channels and provide evidence from a placebo-test to confirm that productivity effects are indeed driven by the reduction in dislikes.Regulating Digital Advertising: Self-Preferencing in the Ad Tech Stack
Abstract
Dominant platforms expanding and practicing self-preferencing across various sectors have been pervasive in digital markets. This study assesses the first emerging regulation aimed at curbing Google's self-preferencing within the French display advertising market (the, so-called, ad tech stack). Through an empirical analysis, we show surprising patterns: in the short run after the data-sharing mandate imposed on Google by the French Competition Authority, we find a substantial reduction of over 300 advertisers on French popular websites and a weekly revenue loss exceeding $95,000 for publishers. Using a simple theoretical model, we then explore the potential mechanisms and determinants influencing the regulatory impact. Our main insight is that the regulatory intervention, which was aimed exclusively at the publishers' side of the market, backfired on publishers and advertisers due to the features of the network externalities in this market and the relative quality of Google compared to its rivals.Discussant(s)
Marita Freimane
,
KU Leuven & University of Zurich
Muxin Li
,
Università Bocconi
Na Liu
,
Cornell University
Cristobal Cheyre
,
Cornell University
JEL Classifications
- M0 - General
- L1 - Market Structure, Firm Strategy, and Market Performance