Colicev et al. (2018): Improving Consumer Mindset Metrics and Shareholder Value through Social Media: The Different Roles of Owned and Earned Media
23 important questions on Colicev et al. (2018): Improving Consumer Mindset Metrics and Shareholder Value through Social Media: The Different Roles of Owned and Earned Media
What is the difference between owned social media (OSM) en earned social media (ESM)?
- Owned social media (OSM): Having Twitter, Facebook, and YouTube accounts
- Earned social media (ESM): Social media activities that a company does not directly generate or control
Which effects are hypothesized in the paper by Colicev et al. (2018)?
media (OSM and ESM) on:
- Brand awareness
- Purchase intent
- Customer satisfaction
The relationships between:
- Social media and shareholder value
- ESM and stock market metrics
- Social media through consumer mindset on firm performance
Are they positive or negative?
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What are the two reasons for study for the paper by Colicev et al. (2018)?
- Interest in exploring different ways by which social media can affect shareholder value
- Different managers in same firm are often rewarded based on different metrics
What are the two research questions that are key in the paper by Colicev et al. (2018)?
- How do ESM and OSM relate to three consumer mindset metrics (brand awareness, purchase intent, and customer satisfaction)?
- Through which of these three metrics do specific social media metrics affect stock market performance?
Explain the framework provided in the Colicev et al. (2018) paper.
- On the left there is social meda with the aspects OSM, ESM, BFF, negative and positive valence
- In the middle, there is CDJ (Customer Decision Journey) with customer satisfaction (ELM central/peripheral), purchase intent (ELM central) and brand awereness (ELM peripheral)
- On the right there is shareholder value with the apsects abnormal returns and idiosyncratic risk
The paper aims to relate social media to the three aspects of CDJ and to relate social media through the CDJ metrics to shareholder value.
What are the 4 contributions of the paper by Colicev et al. (2018)?
- Linking different types of social media to brand awareness, purchase intent, and customer satisfaction
- Study how social media adds value to the firm
- Social media affects shareholder value via specific consumer mindset metrics
- Address the gap between increasing social media spending and its lack of perceived effectiveness
- Study boundary conditions for the effects of OSM on purchase intent
Which hypotheses are supported by the research?
- P1: The higher a brand’s ENG volume, BFF, and OSM, the higher its brand awareness
- P2: Positive-valence ESM has a higher impact on brand awareness than negative-valence ESM
- P4: OSM has a lower impact on purchase intent than do ENG volume, BFF, and positive-valence ESM
- P5: The higher the OSM, the higher the customer satisfaction
*ENG: Earned Social Media Engagement.
*BFF: Brand Fan Following
*Positive Valence ESM= number of positive user posts on brand’s FB page
Which hypotheses are not/partially supported by the research?
- Not support: P3: (a) Positive-valence ESM and (b) negative-valence ESM have higher impacts on purchase intent than do ENG volume and BFF
- Partial support: P6: (a) Purchase intent has the highest positive impact on firm value, (b) followed by customer satisfaction and (c) brand awareness
*ENG: Earned Social Media Engagement.
*BFF: Brand Fan Following
*Positive Valence ESM= number of positive user posts on brand’s FB page
What makes brands more accessible in the minds of consumers and leads to higher brand awareness?
What is the effect of frequent OSM on consumers?
How can brands achieve higher exposure through ESM?
What does the truth effect mean with regards to OSM?
- Persuasive appeals might be attractive on OSM
- Less resistance if it is not perceived as advertising
What is the effect of high BFF for brands?
Will positive- or negative valence ESM have a higher impact on brand awereness?
Is OSM's credibility and diagnosticity high or low?
Which kind of information are customer most likely to look for? And will positive or negative information way more?
- Consonant information (overeenstemmend)
- Negative information will way more
What holds realizing informational competitive advantage?
What are the two reasons for the direct impact of social media on firm value?
- Investors may react immediately to ESM and OSM, anticipating the delayed effects of brand activity on brand awareness, purchase intent and satisfaction
- Both ESM and OSM may increase stock price without an effect through the firms future accounting performance
Do firms with superior customer satisfaction have lower or higher systematic risk?
Which two important functions performs OSM postpurchase?
- OSM can improve customer satisfaction by providing consonant information
- Addressing customer service issues
For which reasons is the impact of OSM on customer satisfaction likely to be limited?
- Due to the lower familiarity of consumers with OSM relative to ESM valence
- The higher trust consumers have in other consumers versus brand employees who are generating OSM
What are the six main results of the paper with regards to brand fan following, ESM en OSM?
- Brand fan following improves all three mindset metrics
- ESM engagement volume affects brand awareness and purchase intent but not customer satisfaction
- ESM positive and negative valence have the largest effect on customer satisfaction
- OSM increases brand awareness and customer satisfaction
- OSM does not increase purchase intent
- OSM is more likely to increase purchase intent of high involvement utilitarian brands and brads with higher reputation
- Implying that running a socially responsible business lends more credibility to OSM
- Purchase intent and customer satisfaction positively affect shareholder value
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