Quantifying the Impact of Earned and Owned Social Media Exposures in a Two-stage Decision Making Model of Brand Purchase

It is found that a brand’s volumes of earned and owned social media have positive impacts on increasing the household's willingness to buy the brand, however, their effects can be substitutive.

Abstract

This study investigates the effect of earned and owned social media exposures and their interaction on brand purchase in a two-stage decision model. Using a niche dataset of twelve-month of daily household purchase and Facebook exposure data for a fast-moving consumer goods marketplace, we first estimate the household purchase propensity, controlling for the variation of baseline tendency at household level and differences across brands. Second, we estimate the level of the brand purchase affected by earned and owned Facebook exposures while accounting for situational factors such as on-site promotions. We found that a brand’s volumes of earned and owned social media have positive impacts on increasing the household’s willingness to buy the brand. However, their effects can be substitutive. Second, the volumes of earned and owned social media have almost no effect on the level of households’ on-site brand purchases when we control for on-site promotions and household socio-demographic characteristics.