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        Research: Social media can have dynamic impact on influencing purchases

        October 12, 2020 By Joe McAdory

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        The Harbert College is dedicated to producing research that advances the academy, extends business thought, and shapes best practice.

        U.S. companies are projected to spend more than $50 billion in social media advertising by 2021. But are they utilizing this tool correctly?

        Yen-Yao Wang, Assistant Professor in Harbert College’s Department of Systems and Technology, and co-authors, Chenhui Guo (Michigan State University), Anjana Susarla (Michigan State University), and Vallabh Sambamurthy (University of Wisconsin – Madison),  explored how 30 U.S. car brands over a six-year period integrated their relationships between traditional media advertising (newspapers, television, etc.), social media, and offline small vehicle sales. Wang learned that even though traditional media remained the most dominant source to influence offline sales, social media – particularly Facebook – can have a dynamic impact (short-term and long-term) on company perception and influence purchases.

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        Dr. Yen-Yao Wang, Assistant Professor, Harbert College Department of Systems and Technology


        His co-authored paper, “Online to Offline: The Impact of Social Media on Offline Sales in the Automobile Industry,” was accepted for publication by Information Systems Research, a Financial Times Top 50 journal and a University of Texas-Dallas 24 leading business journal.

        “I really appreciate Harbert College’s support for this project. Without their support, I cannot get this one published at this prestigious journal,” Wang added.

        Wang and co-authors examined the auto industry, “Because they use many communications, cross-marketing channels,” Wang said. “They use both social media and traditional media to reach their audience. However, if you think about their overall strategy, we need to think about a way to integrate these multi-media channels. It’s not like you necessarily put more efforts into traditional media and it will lead to more sales, or if you put more efforts into social media and that will lead to more sales. You need a comprehensive, overall strategy to see how this multi-form media channel can work together.”

        Two popular media channels are Facebook and Twitter. However, researchers found that there is no “one size fits all” social media strategy between the two as Twitter isn’t best for reaching auto sales’ target audience. Why?

        “One major reason is because, if you look at those monthly active users from Twitter and Facebook, Facebook is way larger,” Wang said. “Statistically, Twitter users are a younger generation. So I would say that in our setting Facebook is a better way to integrate a company’s efforts across online and offline channels. But that doesn’t mean a company should drop one channel. Managers need to develop a more customized Twitter strategy tailored to user preferences to integrate both in a more efficient way.”

        Wang suggests, to maximize the utility of a social media investment, managers need to consider the nature of each platform, the number of potential audiences each platform can reach, and the user basis of each platform. In this case, Facebook stands tall over Twitter.

        Facebook can be a great tool for potential vehicle purchasers to increase awareness about a specific dealer or brand, Wang said, and not be directly involved in the purchase.

        “Let's assume that I’m going to purchase a new car in the future," he said. "I can check a company’s Facebook page, where the company frequently provides new product information. This can increase my awareness for a new product, or in this case, a vehicle. It’s also very likely that they can increase their later purchase behaviors.”

        The paper also recommended that managers, to maximize social media advertising efforts, emphasize efficient cross-team communications to avoid redundancies in messaging, and revisit social and traditional media strategies every three months to maintain momentum.

        “Though traditional media still has the strongest effect on offline car sales, I would say that it (social media) is the future option,” Wang added.

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