Social Media and Brand Purchase: Quantifying the Effects of Exposures to Earned and Owned Social Media Activities in a Two-Stage Decision Making Model

Abstract This study investigates the effects of exposures to earned and owned social media activities and their interaction on brand purchase in a two-stage decision model (i.e., likelihood to purchase and the amount purchased offline). Our study is instantiated on a unique single-source dataset of 12-month home-scanned brand purchase records of a group of fast-moving consumer good brands and Facebook brand Fan Page messages related to the brands. We first find that exposures to earned and owned social media activities for brands have significant and positive impacts on consumers’ likelihood to purchase the brands. Their effects are, surprisingly, suppressive on each other. Second, exposures to earned and owned social media activities have almost no impact on the amount purchased offline with presence of in-store promotions. Our study contributes to our knowledge body of social media marketing by demonstrating that social media activities for a brand can foster the consumer base of the brand, but that effort is not necessarily sales-oriented. In addition, our study is conducive to guiding marketers onto the strategic allocation of advertising dollars to online social channels featuring a mixture of earned and owned social media.