When the algorithm becomes boss

On social media, influencers can earn a lot of money quickly and easily – or can they? Information systems scientist Tatjana Hödl has investigated how platforms control the actions of influencers and shows how great their dependence is.

How big is the dependence of influencers on the platforms? Image: AdobeStock
Tatjana Hödl, your research focuses on the phenomenon of influencers on various social platforms. Are you an influencer yourself?

You mean in addition to my work as a researcher (laughs)? No, science occupies me too much for that.

And if it doesn't work out with science?

Who knows... (laughs). But to be serious, that would probably be too stressful for me. There's constant pressure from the platforms. On YouTube, for example, when you log in, a window appears that shows you the performance of your channel – and gives you the corresponding feedback if things aren't going well. Besides, my research shows that there's a lot of areas of tension. That would be nothing for me.

What areas of tension do you mean?

I'll have to backtrack a bit on that...

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Influencers are users on social media platforms who regularly upload content. This content is consumed by other users, usually referred to as followers. To be able to provide the consumption of this content free of charge, the platform operators need sources of income. This is usually advertising.

Platform operators are therefore interested in attracting as many companies as possible to place advertising on their platform. For advertisers, in turn, it is important to reach their target group as precisely as possible. The content should therefore be advertising friendly.

How do platform operators resolve these areas of tension?

On the one hand, they use algorithms to display advertising-friendly content to a large audience, and on the other hand, they give influencers a share of the advertising revenue. Platforms therefore exert a certain amount of pressure on influencers.

About the person

Tatjana Hödl is a PhD student and research assistant at the Institute of Information Systems since 2018. After a Bachelor of Science in Business Administration (focus: General Management) at the ZHAW School of Management and Law, Winterthur and an exchange semester in the Master (focus: Financial Management) at the University of Technology, Sydney she completed her Master of Science in Business Administration (focus: Financial Management and Accounting) at the University of Bern.

What can influencers use as a guide to optimize their content?

For guidance, they can refer to the guidelines of the platform operators, which, for example, prohibit excessive depictions of violence. If they do not adhere to the guidelines, they receive less or no revenue share and their content is displayed less or not at all to users. However, like general terms and conditions, these are deliberately worded in a vague manner.

Sounds difficult.

Even if influencers adhere to the guidelines, some content may be promoted less than others. How these guidelines are interpreted by the algorithm is not disclosed to influencers. There is no place for influencers to turn to that would explain what they have done right and what they should improve. It is the algorithm that determines which content is successful and which is not.

"It's the algorithm that determines which content is successful and which is not."

Can you give a concrete example?

Take YouTube, for example. There are certain hints about how YouTube's algorithm works, but you never get the whole picture. For example, it shows which video was successful, but not why. So influencers can only try to optimize using the principle of trial-and-error. For example, by changing the thumbnail or the title and using the analytics metrics to compare whether it now works better.

Finding a recipe takes time.

Exactly. But it doesn't stop there, because the systems are very fast-moving: what applies today doesn't necessarily apply the next day. On top of that, something that works well on one platform can completely fail on another. Influencers usually only have a stable follower base on one platform, which leads to an even greater dependence on the respective platform operator.

So there is a great imbalance of power between platforms and influencers.

Yes. Especially for influencers who still have little experience and the intention to do this as a profession, the pressure and uncertainty is enormous. The platforms are very aware of this, and they take advantage of it. If they launch new features, for example, the influencers must use them to continue to be displayed to their followers. In this way, the platforms force the influencers to use features that may not bring them any added value.

"It's more lucrative to produce content targeted to high-income audiences."

What levers do influencers even have to counteract this imbalance?

Many influencers try to diversify and stabilize their sources of income through sponsoring and collaborations or the launch of their own products. It also makes sense to carefully analyze the algorithms of the respective platforms and to react quickly to changes.

More specifically, please.

To stay with the YouTube example: To enable the algorithm to categorize the video appropriately, the video description should contain relevant keywords. It is also important to publish content at regular intervals and to react quickly to relevant events – this may even require canceling a vacation, as one of the interviewees told me. In general, established and successful influencers can rely more on their follower base – and, of course, their experience. Aspiring influencers should find a niche to grow from. It's also more lucrative to produce content specifically for high-income target groups, as the corresponding advertising fees are higher.

Publication details

Hödl, T., Myrach, T. Content Creators Between Platform Control and User Autonomy, Business & Information Systems Engineering, 2023

About the Institute of Information Systems

Information technology is evolving at rapid speed. It is changing how people work and how organizations create value. The Institute of Information Systems (IWI) trains future leaders to harness the potential of information technology in organizations. In research and teaching, we combine technological trends such as social media, big data, cloud computing, and software ecosystems with core topics in business informatics such as e-business, global IT procurement, process management and knowledge management. We employ innovative teaching methods and publish our research in leading academic journals.