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Even as companies devote increasing shares of their marketing budgets to paying social media influencers to tout their products, researchers know little about the tactic’s effectiveness or its overall impact on influencers, their followers, and their partner brands. So, a team of researchers decided to investigate. HBS assistant professor Shunyuan Zhang and doctoral student Magie Cheng analyzed more than 85,000 influencer videos posted on YouTube from August 2019 to August 2020. Comparing similar posts with and without paid promotions, they found that putting out a sponsored video caused significant numbers of followers to doubt the influencers’ authenticity and drop off. The study’s findings suggest several ways for influencers and brands, along with the platforms hosting their content, to minimize the damage. ....
E-Mail Machine learning algorithms can leverage vast amounts of consumer data, allowing automation of business decisions such as pricing, product offerings, and promotions. Airbnb, an online marketplace for vacation rentals and other lodging, created an algorithm-based smart-pricing tool that is free to all Airbnb hosts and allows hosts to set their properties daily price automatically. A new study investigated the impact of Airbnb s algorithm on racial disparities among Airbnb hosts. Adopting the tool narrowed the revenue gap between White and Black hosts considerably, but because far fewer Black hosts used the algorithm, the revenue gap between White and Black hosts actually increased after the tool s introduction. ....