Ershov, Daniel;
Mitchell, Matthew;
(2024)
The Effects of Advertising Disclosure Regulations on Social Media: Evidence From Instagram.
The RAND Journal of Economics
10.1111/1756-2171.12493.
(In press).
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Abstract
We study the effects of advertising disclosure regulations in social media markets. Using data from a large sample of Instagram influencers in Germany and Spain and a difference-in-differences approach, we empirically evaluate the effects of German strengthening of disclosure regulations on post content and follower engagement. We measure whether posts include suggested disclosure terms and use text-based approaches (keywords, machine learning) to assess whether a post is sponsored. We show substantial adoption of disclosure but also a 12% increase in sponsored content and an increase in the share of undisclosed-sponsored content consumers are exposed to. We also find reductions in engagement, suggesting that followers were likely negatively affected.
| Type: | Article |
|---|---|
| Title: | The Effects of Advertising Disclosure Regulations on Social Media: Evidence From Instagram |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1111/1756-2171.12493 |
| Publisher version: | https://doi.org/10.1111/1756-2171.12493 |
| Language: | English |
| Additional information: | © 2025 The Author(s). The RAND Journal of Economics published by Wiley Periodicals LLC on behalf of The RAND Corporation. This is an open access article under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/). |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10190654 |
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