From Social to Sale: The Effects of Firm Generated Content in Social Media on Customer Behavior

Posted: 17 Oct 2015  

Ashish Kumar

Aalto University School of Business

Ram Bezawada

Baruch College

Rishika Ramkumar

Texas A&M University - Department of Marketing

Ramkumar Janakiraman

University of South Carolina - Darla Moore School of Business

P.K. Kannan

University of Maryland - Robert H. Smith School of Business

Date Written: October 16, 2015

Abstract

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

Suggested Citation

Kumar, Ashish and Bezawada, Ram and Ramkumar, Rishika and Janakiraman, Ramkumar and Kannan, P.K., From Social to Sale: The Effects of Firm Generated Content in Social Media on Customer Behavior (October 16, 2015). Journal of Marketing, Forthcoming; Mays Business School Research Paper No. 2675073; Robert H. Smith School Research Paper No. RHS 2675073. Available at SSRN: https://ssrn.com/abstract=2675073

Ashish Kumar

Aalto University School of Business ( email )

P.O. BOX 21230
Helsinki, AALTO 00076
Finland
+358 504311813 (Phone)

HOME PAGE: http://people.aalto.fi/index.html?profilepage=isfor#!ashish_kumar

Ram Bezawada (Contact Author)

Baruch College ( email )

One Bernard Baruch Way, B12-240
New York, NY 10010-5585
United States

Rishika Ramkumar

Texas A&M University - Department of Marketing ( email )

430 Wehner
College Station, TX 77843-4218
United States

Ramkumar Janakiraman

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
8037770534 (Phone)

HOME PAGE: http://businessanalyticslens.com/

Pallassana Kannan

University of Maryland - Robert H. Smith School of Business ( email )

Department of Marketing
College Park, MD 20742-1815
United States
301-405-2188 (Phone)
301-405-0146 (Fax)

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