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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, 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 social media – particularly Facebook – can have a dynamic impact (short-term and long-term) on company perception and influence purchases, versus traditional means of advertising.

         

        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, an elite journal.

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        Dr. Yen-Yao Wang


        Why examine the auto industry? “Because it uses many communications and cross-marketing channels,” Wang said. “It uses both social and traditional media to reach its audience. However, if you think about the overall strategy, consider a means to integrate these multi-media channels. It’s not like if you necessarily put more effort into traditional media that it will lead to more sales, or if you put more effort 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, Wang 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? “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. 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, sales 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 – in order 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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