Abstract

This paper investigates the strategic use of cross-promotion for content producers in social media. In particular, we study how a producer chooses other producers to cross-promote so as to maximize the expected benefits of them cross-promoting him/her in return. Theories on homophily effect and social influence suggest that cross-promoted producers are more likely to cross-promote the initiator in return when they are in the similar categories or share more common friends and when the initiator has higher status. However, the cross-promotion from producers of different categories and social groups (i.e., share fewer common friends) tend to benefit the initiator more. The benefits also increase as the status of the initiator increases. We collected a panel of data consisting of 27,356 producers’ profile and status information, content categories, and their cross-promotion activities over a period of two months from YouTube. To test our hypotheses, we first employ a cox proportional hazard model to estimate the probability of cross-promotion in return. Then, we use a difference-in-differences method with panel fixed effects to evaluate the effect of cross-promotion in return on the initiator. Our results strongly support our hypotheses and provide valuable insights for both content producers and social media platforms.

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