MKTG 556 | Session 4 | Revenue Generation Through Influencer Marketing

Maximilian Beichert, Andreas Bayerl , Jacob Goldenberg, and Andreas Lanz

Introduction:

Direct-to-consumer firms increasingly see influencer marketing as an effective way to seed products. However, a key managerial question remains unresolved: whether to target influencers with low or high followership to generate immediate revenue. In this article, the authors aim to answer this question by examining the entire influencer marketing funnel for the first time—ranging from followers on user-generated content networks (e.g., Instagram) to reached followers, engagement, and actual revenue—while also considering the costs of paid endorsements. The findings indicate that targeting low-followership influencers significantly outperforms high-followership influencers across three return on investment metrics. A mediation analysis shows that engagement explains the negative relationship between influencer followership levels and ROI. This aligns with social capital theory, suggesting that higher followership levels reduce engagement between influencers and their followers. These conclusions are based on secondary sales data from 1,881,533 purchases and three comprehensive field studies involving hundreds of paid influencer endorsements, confirming the robustness of the results.