Study finds that social media marketing has ‘significant, positive’ effect on consumer spending

New research published in the U.S. has found that brand-generated social media content can have a significant effect on consumer spending, particularly when combined with other physical, TV and digital marketing campaigns.

The study, carried out by collaborating professors from Aalto University, the University of Maryland and the University of Maryland, studied large amounts of data from a large retailer with outlets in the northeast of the country. Researchers looked at:

  • Customer participation on the brand’s social media page
  • In-store purchase figures before and after the brand’s social media content was posted
  • Customer attitudes towards technology and social media in general

The results for this particular retailer showed that engagement with social media content, or popularity among customers, was the factor which had the biggest effect on sales. Sentiment – whether the post was positive, negative or neutral – and how much customers actually like to use social media were also factors. Researcher Ram Bezawada was quoted in a Futurity.org article as saying:

“A neutral or even negative social media post with high engagement will impact sales more than a positive post that draws no likes, comments, or shares,”

“This is true even among customers who say their purchase decisions are not swayed by what they read on social media.”

Integrating social media into other marketing campaigns

The findings of the study, which was published in the American Marketing Association’s ‘The Journal of Marketing, also pointed to the power of social media when combined with other marketing forms. Social posts were found to significantly strengthen television, email and digital marketing campaigns. For example:

  • When social media and TV marketing were combined, customer spending increased by 1.03%
  • When social media and email marketing were combined, customer spending increased by 2.02%

The research also produced statistics for cross buying, which is when customers buy additional products or services from the same company. This increased by 0.84% when TV and social media were used together, and 1.22% when email and social were combined.

Study co-author Bezawada has urged brand managers to embrace social media in order to build relationships with customers, explaining that building up a dedicated fan base and a community around a brand is the key to long-term boosts in sales and revenues. However, they mustn’t forget about other marketing forms, as the study explains:

“Our study suggests a synergistic relationship between social and other media used for marketing communications—television and e-mails. As social media gains importance, managers must take care to not abandon other forms of advertising as television and email marketing.”  

Research such as this can also be used to provide companies with clearer return on investment (ROI) figures, which is often an obstacle to investment and commitment to social media marketing. If it can be shown that taking social seriously will boost sales, more brands are likely to feel more confident assigning greater resources to it.

What approach do you take to social media marketing? Do you invest a lot of time, money and specialist skill in it, and have you seen any concrete returns? Please feel free to share your thoughts.