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Improving Consumer Mind-Set Metrics and Shareholder Value through Social Media: The Different Roles of Owned and Earned
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Although research has examined the social media-shareholder value link, the role of consumer mindset metrics in this relationship remains unexplored. To this end, drawing on the elaboration likelihood model and accessibility/ diagnosticity perspective, the authors hypothesize varying effects of owned and earned social media (OSM and ESM) on brand awareness, purchase intent, and customer satisfaction and link these consumer mindset metrics to shareholder value (abnormal returns and idiosyncratic risk). Analyzing daily data for 45 brands in 21 sectors using vector autoregression models, they find that brand fan following improves all three mindset metrics. ESM engagement volume affects brand awareness and purchase intent but not customer satisfaction, while ESM positive and negative valence have the largest effects on customer satisfaction. OSM increases brand awareness and customer satisfaction but not purchase intent, highlighting a nonlinear effect of OSM. Interestingly, OSM is more likely to increase purchase intent for high involvement utilitarian brands and for brands with higher reputation, implying that running a socially responsible business lends more credibility to OSM. Finally, purchase intent and customer satisfaction positively affect shareholder value.
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... Moreover, the lead VC may choose to share risks about such a portfolio company with a smaller number of VC syndication partners. However, an important caveat regarding our analysis of the relation between the social media presence of portfolio companies and VC financing is that the mere presence of an active Twitter account may not necessarily 1 See also the empirical studies by Tumasjan et al. (2021) and Que and Zhang (2021), which focus on the effect of social media on the valuation of venture capital backed firms. 2 Colicev et al. (2018) state that firm-generated contents on social media are termed as "owned social media" (OSM). In addition to OSM, users can generate contents (e.g., retweets, likes, mentions) to promote their recommendations, propagates their brand awareness, purchase intent, and customer satisfaction. ...
... Third, this paper also provides some suggestive evidence in support of the view that entrepreneurial firms with higher OSM and ESM engagement volume are likely to have a better financial and operating performance than the ones with lower engagement volumes. This is likely to be closely associated with better performance in consumer mind metrics including brand awareness, purchase intent, and consumer satisfaction (Colicev et al. 2018). These revelations of consumer behavior and their attitudes toward products, services and startup managements can strongly affect projections of company financials and firm valuations. ...
... We distinguish between earned social media (ESM) and owned social media (OSM) following Colicev et al. (2018). The ESM volume refers to earned social media content that users generate for an entrepreneurial firm (i.e., retweeting a firm's tweet, liking a firm's tweet, or liking a firm's retweet). ...
This paper examines how information acquisition through social media affects venture capital (VC) investments into entrepreneurial startup firms. We collect a unique data set from Twitter API to measure the impact of owned social media (OSM) and earned social media (ESM) of portfolio companies on the structure of VC investments they receive. We find evidence consistent with the hypothesis that startup firms’ social media engagement affects the staging of VC financing, the VC syndicate structure, and the probability of a successful exit. When a portfolio company’s social media accounts are more active and the company has a higher engagement volume with its followers, VC firms reduce the extent of stage financing and are less likely to syndicate with each other in financing such a portfolio company. Overall, our results demonstrate that entrepreneurial firms with higher OSM and ESM engagement volume have fewer VC financing rounds, a smaller number of VCs in their VC syndicates, a lower probability of VC syndication, a higher successful exit probability, and a higher amount total funding across all rounds.
... In this stage, customers evaluate their purchase experience by making comparisons with their pre-purchase expectation, leading to satisfaction or dissatisfaction. Consumers verify the similarity ratio based on their product experience and other consumers' testimonials or information (Colicev et al., 2018). Expectation-Confirmation Theory by Oliver (1980) describes customer expectation as used to generate a definite reference to a specific service for comparative judgement. ...
... Brand-owned, partner-owned, customer-owned, and social/external touchpoints are parts of the source of future experience. This chapter acknowledges owned and earned social media Colicev et al., 2018) as the basis for describing the context due to its social media setting. ...
... Owned Social Media (OSM) denotes any online communications created, shared, and controlled by a brand through their social networks property, such as an Instagram account, Facebook fan page, and YouTube channel (Colicev et al., 2018;Kuehnl et al., 2019). Experience creates long-lasting impressions on consumer memory when they search, buy, receive, and consume products or services , generally on standard product features, with different negative or positive valence (Khan et al., 2019). ...
This chapter is centred around the luxury unstitched apparel market of Pakistan and interactive virtual fitting room tools of fashion e-commerce such as 3D mobile app scanners, virtual reality, augmented reality, and mixed reality. Interactive virtual fitting room tools have been developed extensively for the advantage of both consumers and fashion retailers to improve online shopping experience (Idrees et al., International Journal of Economics and Management Engineering 14:318–333, 2020b). Thus, the chapter discusses the Pakistani luxury unstitched apparel market (Faust & Carrier, Textile Research Journal 79:1446–1458, 2009), for the enhancement of Pakistani fashion e-commerce interfaces by utilising interactive virtual fitting room tools. The discussion of luxury unstitched apparel products demonstrates that the products are loved across the borders because of their garment customisation, talent, and craftsmanship, and this demand is flourishing and expanding rapidly due to exquisite quality and design uniqueness (Rehman, A cross-border fashion jaunt, 2014). Unstitched apparel products are sold in separate garment pieces normally declared as 2-piece and 3-piece suits. For instance, the upper garment includes separate fabric pieces or one full piece of fabric offering the front, back, and sleeves along with separate one piece of fabric for the lower garment, which is adorned with various options such as printed and embroidered fabric pieces. Nevertheless, Pakistani fashion e-commerce platforms lacks= the web 3.0 technology virtual fitting room tools. Therefore, there is a need to incorporate virtual size and fit prediction, customisation, and virtual fashion viewing interactive tools. The virtual fitting room tools discussed in the chapter provide customisation approaches along with size recommendations and virtual trying on with 3D product visualisation (in 360-degree rotation), which generate beneficial competition amongst online retailers. The Lemon and Verhoef (Journal of Marketing 80:69, 2016) model is employed to present a sustainable mass-customisation e-commerce business model by combining virtual fitting room tools and luxury unstitched apparel products. The luxury unstitched apparel products are sustainable because they are customised according to personalised body dimensions which adds the benefit of reducing wastage of fabric due to mass production. Moreover, such demonstrations intersecting luxury unstitched apparel product with interactive virtual e-commerce tools would be beneficial for worldwide markets to employ in mass-customisation business approaches.KeywordsUnstitched ApparelPakistanFashion e-commerceSustainableMass-customisationLuxury FashionVirtual RealityAugmented Reality3D Body ScanningMobile app scanner
... Comparatively, Coca-Cola which is one of the most famous beverages' brand is way below and has only 295,000 subscribers. "Digital accounts and channels are being used extensively for product related information, the overall buying process, customer reviews and then the purchase decisions; newly developed technologies including social media are helping brands to craft advanced customer touch points digitally" (O'Connor, Malshe, Pauwels, and Colicev, 2018). "Some companies are also introducing new strategies by the brands such as content and influencer marketing" (Olsen and Peretz, 2017). ...
... YouGov brand data have been previously used in the marketing literature (Colicev et al. 2018;Hewett et al. 2016). These data are based on the opinions of a representative sample of consumers drawn daily from a panel of 5 million consumers. ...
The primary focus of brand equity research has been on how brand knowledge creates value for firms through customer behavior in product markets. Using archival data and five experiments, this article tests a framework that outlines the unique role brands play in the labor market. The framework distinguishes between vertical and horizontal differentiation and shows that vertical brand differentiation is associated with lower pay, whereas horizontal brand differentiation is associated with higher pay. Employees are also vertically and horizontally differentiated and firms high in horizontal brand differentiation pay more for employees who match their brands’ differentiating characteristics (i.e., brand-relevant complementarities). Results show that these brand-pay relationships have important downstream effects on employee behavior and, consequently, on firm profits. Specifically, leveraging vertical brand differentiation to lower pay represents a false economy because profits are attenuated by negative effects on employee productivity and retention. In contrast, when managers at firms high on horizontal brand differentiation pay more, profits increase via the same mediating employee behaviors. Six firm strategies and investments that influence firm bargaining power in the employee-brand matching process are found to moderate the brand-pay relationship and downstream effects on profits.
Brand cocreation campaigns offer consumers various activities centered on interpreting brand image. Yet, little is known about what brand cocreation characteristics increase digital consumer engagement (DCE; e.g., liking a brand on Facebook) and how they do so. Given the importance of DCE, the current research addresses this gap. Three experiments demonstrate that brand cocreation activities with high (vs. low) focus on brand meaning generate greater DCE among consumers who have high self–brand connection. Evidence suggests that this occurs because an activity's high focus on brand meaning facilitates the generation of abstract brand knowledge. For consumers with low self–brand connection, focus on brand meaning does not differentially affect DCE because these consumers lack appropriate knowledge about the brand. This research also offers implications for optimizing interactive marketing practice.
In the wake of the ongoing digital revolution, images have emerged as a platform for conveying multifacet information about a product or service in the increasingly competitive business environment. This study focuses on the scale development of the camera eats first construct, investigating how photographers associate the meaning of a photograph while sharing photos on their social media accounts. The conceptual understanding of the construct is influenced by the elegance of the theory of framing that evolves through three-stages—frame-building (how photograph frames emerge), frame-setting (the interplay between photograph frames and audience predispositions) and framing effects (information processing, attitudinal or behaviourial effects). Our development and validation process of a psychometric property consists of four empirical phases that support the construct and its nomological validity. Our study provides an initial exposure to scale development, using methodological rigors that consider the views of the respondents in the restaurant industry. We provide evidence that the camera eats first construct consists of five dimensions (i.e., inspiration, aspiration, food photographic identity, influencers, tailor-made food) which will enable restaurants managers to formulate informed strategies to their potential customers, providing the latest trends in the gourmet industry as well as improving and upholding the sophistication of the industry.
Marketers intensely continue to capture economic value by leveraging social media platforms besides improving customer experience. Social media has transformed how fashion is designed, presented, reported, and consumed. The growing attention to customer experience arises in parallel with the complex customer journeys, in which myriad touchpoints interaction is comprehensively used between firms and customers in multiple channels and media. Despite centring on customer experience for sustainable growth, little is known about the future experience across the customer journey (pre-purchase, purchase, and post-purchase). This chapter attempts to contribute to the existing Lemon and Verhoef (J Market 80:69–96, 2016) model by providing attention to the limited role of future experience in shaping customer experiences. The authors suggest that social media stimulus influences customers’ initial expectations and builds one’s future experience. Hence, this study aims to delineate the role social media stimuli can play in shaping future experiences, thus producing a novelty in conceptualising future experience. Accordingly, a broad critical literature review provides an extant theory contributing to the proposed model. Findings illustrate that owned social media (OSM) and earned social media (ESM) are the key dimensions contributing to future experiences. OSM denotes a brand’s content sharing through its online social network assets. ESM discusses the brand-related content created by consumers through online social networks. The findings of this study are likely to provide valuable insights into the literature development and offer key managerial implications in the fashion industry. Thus, this chapter suggests future work development as future experience is a relatively new “greenfield” area for future research.KeywordsSocial mediaCustomer experienceFuture experienceOwned social mediaEarned social media
Purpose
This paper aims to investigate the effects of buzz about the focal brand on competing brands’ attitudes.
Design/methodology/approach
Brand-related buzz can be defined as “a general sense of [positive or negative] excitement about or interest in [a brand], as reflected in or generated by word of mouth” (Oxford dictionary). The authors investigate the spillover effects of such positive and negative buzz on brand attitudes of 648 brands in 43 categories over five years.
Findings
The authors find that spillover effects are widespread across product categories and affect competing brands through (negative) halo effect and (unfavorable) preference substitution. The authors do not find evidence of positive spillover effects for non-focal brands.
Research limitations/implications
The authors provide generalizable evidence that positive and negative buzz spills over competing brands’ attitudes for hundreds of brands across the largest sectors of the US economy. Interestingly, positive and negative buzz have asymmetric effects on consumer attitudes. These effects vary by consumer attitude metric and are moderated by brand news intensity, strength and similarity.
Practical implications
First, marketing managers should monitor the buzz of competing brands. Second, if managers are concerned with impressions, they should intervene when there is a negative buzz about competitors (halo effect). Third, managers should stimulate positive buzz to negatively affect their competitors’ purchases. Fourth, managing a smaller brand has advantages regarding impressions and recommendations, while news intensity can shield from negative spillover effects for impressions. Finally, brand similarity amplifies the spillover effects across the board.
Originality/value
This paper provides evidence that spillover effects are pervasive and urges marketing managers and academics to incorporate competing buzz in their frameworks and strategies.
Marketing departments are under increased pressure to demonstrate their economic value to the firm. This challenge is exacerbated by the fact that marketing uses attitudinal (e.g., brand awareness), behavioral (e.g., brand loyalty), and financial (e.g., sales revenue) performancemetrics, which do not correlate highly with each other. Thus, onemetric could view marketing initiatives as successful, whereas another could interpret them as a waste of resources. The resulting ambiguity has several consequences for marketing practice. Among these are that the scope and objectives of marketing differ widely across organizations. There is confusion about the difference between marketing effectiveness and efficiency.Hard and softmetrics and offline and onlinemetrics are typically not integrated. The two dominant tools for marketing impact assessment, response models and experiments, are rarely combined. Risk inmarketing planning and execution receives little consideration, and analytic insights are not communicated effectively to drive decisions. The authors first examine how these factors affect both research and practice. They then discuss how the use of marketing analytics can improve marketing decision making at different levels of the organization. The authors identify gaps in marketing's knowledge base that set the stage for further research and enhanced practice in demonstratingmarketing's value.
Do investments in customer satisfaction lead to excess returns? If so, are these returns associated with higher stock market risk? The empirical evidence presented in this article suggests that the answer to the first question is yes, but equally remarkable, the answer to the second question is no, suggesting that satisfied customers are economic assets with high returns/low risk. Although these results demonstrate stock market imperfections with respect to the time it takes for share prices to adjust, they are consistent with previous studies in marketing in that a firm's satisfied customers are likely to improve both the level and the stability of net cash flows. The implication, implausible as it may seem in other contexts, is high return/low risk. Specifically, the authors find that customer satisfaction, as measured by the American Customer Satisfaction Index (ACSI), is significantly related to market value of equity. Yet news about ACSI results does not move share prices. This apparent inconsistency is the catalyst for examining whether excess stock returns might be generated as a result. The authors present two stock portfolios: The first is a paper portfolio that is back tested, and the second is an actual case. At low systematic risk, both outperform the market by considerable margins. In other words, it is possible to beat the market consistently by investing in firms that do well on the ACSI.
The author presents a conceptual model of brand equity from the perspective of the individual consumer. Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of the brand. A brand is said to have positive (negative) customer-based brand equity when consumers react more (less) favorably to an element of the marketing mix for the brand than they do to the same marketing mix element when it is attributed to a fictitiously named or unnamed version of the product or service. Brand knowledge is conceptualized according to an associative network memory model in terms of two components, brand awareness and brand image (i.e., a set of brand associations). Customer-based brand equity occurs when the consumer is familiar with the brand and holds some favorable, strong, and unique brand associations in memory. Issues in building, measuring, and managing customer-based brand equity are discussed, as well as areas for future research.
This book is about how models can be developed to represent demand and supply on markets, where the emphasis is on demand models. Its primary focus is on models that can be used by managers to support marketing decisions. The market environment is changing rapidly and constantly. With the introduction of scanner equipment in retail outlets, the use of hand scan panels, and the data explosion caused by the Internet, the opportunity to obtain meaningful estimates of demand functions has vastly improved. Models that provide information about the sensitivity of market behavior to marketing activities such as advertising, pricing, promotions and distribution are now routinely used by managers for the identification of changes in marketing programs that can improve brand performance. In today’s environment of information overload, the challenge is to make sense of the data that is being provided globally, in real time, from thousands of sources.
Modeling Markets presents a comprehensive overview of the tools and methodologies that managers can use in decision making. It has long been known that even simple models outperform judgments in predicting outcomes in a wide variety of contexts. More complex models potentially provide insights about structural relations not available from casual observations. Although marketing models are now widely accepted, the quality of the marketing decisions is critically dependent upon the quality of the models on which those decisions are based. In this book, the authors present a wealth of insights developed at the forefront of the field, covering all key aspects of specification, estimation, validation and use of models. Many current insights and innovations in quantitative marketing are presented. Throughout the book, the authors provide examples and illustrations. This book will be of interest to researchers, analysts, managers and students who want to understand, develop or use models of marketing phenomena.
Inspired by the literature on processing fluency and the practical question of how to choose fonts for website design, we investigated the impact of customer reviews on consumer evaluation under an easy-to-read (vs. difficult-to-read) review font. We found that the feeling of ease in reading led consumers to judge the reviewers as more credible, thus increasing the impact of the reviews. Moreover, the effect of font diminished when consumers elaborated information more thoroughly (i.e., when high in need for cognition, or in an accountable situation) and thus did not use simple heuristics (reading ease) to make judgment.
Panel vector autoregression (VAR) models have been increasingly used in applied research. While programs specifically designed to fit time-series VAR models are often included as standard features in most statistical packages, panel VAR model estimation and inference are often implemented with general-use routines that require some programming dexterity. In this article, we briefly discuss model selection, estimation, and inference of homogeneous panel VAR models in a generalized method of moments framework, and we present a set of programs to conveniently execute them. We illustrate the pvar package of programs by using standard Stata datasets.