The Causal Effects of Twitter Banter Among Rival Brands: The Case of a New Product Launch in the Fast-Food Industry

69 Pages Posted: 24 Aug 2022

See all articles by Ashutosh Bhave

Ashutosh Bhave

University of Arkansas

Sri Harsha Kamatham

University of Manitoba - Asper School of Business

Norris Bruce

University of North Carolina, Chapel Hill

Date Written: July 25, 2022

Abstract

We quantify the causal effects of humorous banter among three rival fast-food brands on Twitter in the context of a new product launched by one of the rivals (viz, the focal or entrant brand). We argue that Twitter banter can cause a surge in online search that in turn leads to higher offline sales. We then exploit the exogeneity of the banter to show the event led to 400% and 54% increases in online search and store visits (respectively) for the focal brand, relative to the previous week. These effects vary with demographics, namely, race and culture. For the two incumbents who initiated the banter with the focal brand, the banter led to a 5.3% increase and a 2.9% decrease in visits to their store locations, respectively. Results also showed that (long-term) the launch increased the focal brand’s store visits by 30%. As a result, this study documents that social media can greatly affect launch sales and warns rival brands who wish to initiate humorous online banter as a form of comparative advertising. That is, initiating negative comparisons on Twitter, unlike in offline settings, could rapidly provide rivals not only free engagement but also higher sales.

Keywords: Causal Inference, Brand Banter, Twitter, New Product Launch, Regression Discontinuity in Time, Synthetic Difference-in-Differences, Fast-Food Industry

Suggested Citation

Bhave, Ashutosh and Kamatham, Sri Harsha and Bruce, Norris, The Causal Effects of Twitter Banter Among Rival Brands: The Case of a New Product Launch in the Fast-Food Industry (July 25, 2022). Kenan Institute of Private Enterprise Research Paper Forthcoming, Available at SSRN: https://ssrn.com/abstract=4171950 or http://dx.doi.org/10.2139/ssrn.4171950

Ashutosh Bhave

University of Arkansas ( email )

Sri Harsha Kamatham (Contact Author)

University of Manitoba - Asper School of Business ( email )

181 Freedman Crescent
Winnipeg, Manitoba R3T 5V4
Canada

Norris Bruce

University of North Carolina, Chapel Hill ( email )

Chapel Hill, NC 27599
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
89
Abstract Views
427
Rank
423,427
PlumX Metrics