Doug's Effect: The Impact of Influencer Marketing on Community-Driven Online Auctions

The pandemic restrictions imposed during 2020 contributed to a significant shift of economic activity in online automotive auction markets. Yet, with vehicle sales going down in the post-pandemic period, online auction platforms are struggling to keep their communities engaged and active. One such platform (Cars & Bids) leverages Doug DeMuro, founder and social media influencer, to bolster user engagement and auction performance on the platform. To explain the effect of their “endogenous to the platform” influencer, we rely on the theoretical principles of resource mobilization and relational herding. We collected a panel dataset of N = 1300 vehicles auctioned from 2020 to 2024 and leverage difference-in-differences and coarsened exact matching to conduct our analyses. Our findings suggest that an endogenous influencer effect can significantly increase user engagement (i.e., viewership and commenting), as well as increase auction performance with a higher number of bids and higher final auction price.