Sponsorship disclosure and consumer engagement: Evidence from Bilibili video platform

Abstract

With the rapid advancement of mobile internet, UGC video platforms have become integral to the daily lives of young generations. For content creators on these platforms, sharing videos sponsored by corporations is the primary method to monetize their work. This research delves into the impact of video content sponsorship and sponsorship disclosure on consumer engagement by analyzing nearly 30,000 videos on the Bilibili platform. The results indicate that video sponsorships have a significantly negative impact on consumer engagement. However, comprehensive disclosure of sponsorship beforehand can improve consumer engagement. Additionally, our study demonstrates that followers of top-tier content creators are more sensitive to video sponsorships. This paper presents a critical empirical investigation of the sponsorship issue within the context of UGC platforms, making valuable contributions to the theories of advertisements' externalities in two-sided markets and information asymmetry.