August 8, 2018 / James Hughes
With the boom in social media, and the subsequent boom in social media marketing budgets, decision makers are struggling to determine if they are truly receiving a return on their investments in social media marketing. This is especially true when social media is just one part of their overall advertising strategy, which also includes traditional advertising on television, and digital advertising that goes straight to customers’ emails. With this onslaught in ads, does it really make a difference to market on social media platforms? Scientists say YES!
Kumar et al. (2016) attempted to create a comprehensive model of advertising effects on customer buying patterns, with a specific focus to see the impact of social media advertising. They found that firm-generated content (FGC) on social media did have a positive relationship with customer buying and customer profitability, even when accounting for the impact of television and digital advertising. Furthermore, the results suggested that this effect was even greater the more tech-savvy and social media prone the customers were.
Implications for Managers:
Kumar el al. had several recommendations for managers based on their research findings. First, they strongly encouraged the use of firm-generated content on social media, arguing that it not only increased customer profitability but also motivated customers to cross-buy into more products.
Second, they suggest synergizing your advertising across social media, television, and digital marketing, arguing that a coordinated ad campaign becomes “the talk of the town” and leads to a greater impact than using different messages in each mode.
Third, they highly recommend monitoring the popularity of your FGC, as they note that customer engagement with the content is a high factor in how effective it is in generating profits for your business.
Thanks for reading,
James Hughes, Data Science
Ashish Kumar, Ram Bezawada, Rishika Rishika, Ramkumar Janakiraman, and P.K. Kannan (2016), "From Social to Sale: The Effects of Firm-Generated Content in Social Media on Customer Behavior," Journal of Marketing, 80 (1), 7-25