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Advertising and Content Differentiation: Evidence from YouTube

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  • Anna Kerkhof

Abstract

Many media outlets depend on advertising revenue to finance their operations, but the effect of advertising on media outlets’ content choices is largely unexplored. This paper exploits two institutional features from YouTube to show that an exogenous increase in the feasible amount of advertising induces YouTubers to differentiate their video content from their competitors. A plausible mechanism is that YouTubers avoid competition: viewers typically perceive advertising as a nuisance and therefore as an implicit price they have to pay; thus, they could switch to a competitor if a YouTuber increased her advertising quantity. This is less likely, however, if the YouTuber differentiates her content from the mainstream and moves to a niche.

Suggested Citation

  • Anna Kerkhof, 2024. "Advertising and Content Differentiation: Evidence from YouTube," The Economic Journal, Royal Economic Society, vol. 134(663), pages 2912-2950.
    • Handle: RePEc:oup:econjl:v:134:y:2024:i:663:p:2912-2950.
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    File URL: http://hdl.handle.net/10.1093/ej/ueae043
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    Cited by:

    1. Gregory J. Martin & Nicola Mastrorocco & Joshua McCrain & Arianna Ornaghi, 2024. "Media Consolidation," CESifo Working Paper Series 11356, CESifo.

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