Social Media Engagement and Performance of E-Tailers: An Empirical Study
38 Pages Posted: 29 Jul 2020
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: Suggested Citation