Social Media Engagement and Performance of E-Tailers: An Empirical Study

38 Pages Posted: 29 Jul 2020

See all articles by Fei Ren

Fei Ren

Peking University - Guanghua School of Management

Yong Tan

University of Washington - Michael G. Foster School of Business

Fei Wan

Shanghai International Studies University - School of Business and Management

Date Written: April 21, 2017

Abstract

While prior literature mainly focuses on user-generated content (UGC), we study the impact of marketer-generated content (MGC) on sales revenue. Specifically, we quantify the sales effect at the firm level, and examine how the effect varies with firm characteristics. We collect data from taobao.com and its microblogging platform WeiTao. Using Propensity Score Matching (PSM) and Difference-in-Differences (DID) methods, we find that MGC significantly promotes sales at firm level. Meanwhile, firms selling low-involvement products benefit more from MGC efforts, compared to those selling high-involvement products. Specifically, sales elasticity is 27.89% for firms selling low-involvement products (stationery stores in our data) whereas that for firms selling high-involvement products (cosmetics stores in our data) is 19.84%. We also find that MGC with more followers and more blogpostings improves firm sales more. Furthermore, we apply control function model to remove possible hidden bias in the matching process. Results hold for various robustness checks. Overall, our findings suggest that MGC plays an important role in firm marketing activities, and firms need suitable strategy to gain from their social media efforts.

Keywords: social media marketing, marketer-generated content, product involvement, propensity score matching, difference-in-differences, control function

JEL Classification: M

Suggested Citation

Ren, Fei and Tan, Yong and Wan, Fei, Social Media Engagement and Performance of E-Tailers: An Empirical Study (April 21, 2017). Available at SSRN: https://ssrn.com/abstract=3642048 or http://dx.doi.org/10.2139/ssrn.3642048

Fei Ren

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Yong Tan

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3226
United States

Fei Wan (Contact Author)

Shanghai International Studies University - School of Business and Management ( email )

1550 Wen Xiang Rd.
Songjiang District
Shanghai, Shanghai 201620
China

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