From Social to Sale: The Effects of Firm Generated Content in Social Media on Customer Behavior
Journal of Marketing, Forthcoming
Posted: 17 Oct 2015
Date Written: October 16, 2015
Given the unprecedented reach of social media, firms are increasingly relying on social media as a channel for marketing communication. The objective of this study is to examine the effect of firm generated content (FGC) in social media on three key customer metrics, spending, cross-buying and customer profitability. We further examine the synergistic effects of FGC with television advertising and email communication. To accomplish our objectives, we assemble a novel dataset comprising customers’ social media participation data, customer transaction data and attitudinal data obtained through surveys. Our results indicate that after accounting for the effects of television advertising and email marketing, FGC has a positive and significant effect on customers’ behavior. We show that FGC works synergistically with both television advertising and email marketing. We also find that the effect of FGC is greater for more experienced, tech-savvy and social media prone customers. We propose and examine the effect of three characteristics of FGC, namely valence, receptivity and customer susceptibility. We find that whereas all the three components of FGC have a positive impact, the effect of FGC receptivity is the largest. Our study offers critical insights for managers on how to leverage social media for better returns.
Keywords: social media, social media analytics, firm generated content, digital marketing, integrated marketing communication, cross-buying behavior, customer relationship management, propensity score matching, difference-in-differences
JEL Classification: C11, C33, C34, M31, M37, M39
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