A Poisoned Chalice: Impact of Introducing a Store on Social Media Fan Pages on Customer Engagement and Product Sales

While social media fan pages are being widely used by firms, their value in terms of influencing customer behavior is not clear. In this study, we examine the impact of introducing stores on social media fan pages on customer engagement and purchase. Using a unique dataset from a fashion retailer, we find that opening a fan page store can lead to negative outcomes for the firm. Our results suggest that introducing a fan page store significantly reduces customer engagement with the fan page by 26%. More importantly, results indicate that introducing a fan page store decreases the retailer’s sales by 4.6%. The study informs managerial practice on whether to leverage fan page stores for enhancing customer engagement and promoting sales

Does Length Impact Engagement? Length Limits of Posts and Microblogging Behavior

Managers of social media platforms aggressively compete for the participants who create user-generated content on their sites. In this study, we delve into one tactic of this competition which has become increasingly popular, but has received limited attention, the extension of character limits. Despite its popularity, the impact of changing these limits on user posting behavior is unclear. On the one hand, increasing limits might discourage posting by yielding annoyingly long posts which drive away audiences who favor microblogs for their streamlined and efficient content. On the other hand, increasing limits might encourage posting by giving users the freedom they need to more effectively communicate ideas and attract more positive feedback from the audience. We delve into this tension by exploiting a natural experiment, the phased rollout of length limit extensions on the Chinese microblog, Weibo. Findings from more than 8,000 users suggest that extending length limits significantly increases user engagement by enticing users into posting more actively. However, it appears that accessing the platform through tethered or mobile connection strongly moderates the effect, inasmuch as the observed change to post volumes is only observed for PC users (versus mobile-only users). Given that the access to digital devices such as mobiles or PCs varies across income, age, and gender, this result suggests that by designing different length limits for online posts, social media platforms can target certain demographic groups as the sources of content generation. When platforms extend length limits, they risk of shifting the content generation away from the traditional mobile users they have relied upon

AMCIS - How Do Monetary Incentives Affect Online Product Reviews and Sales

Online retailers employ various strategies, such as reviewer reputation systems and online communities, to encourage consumers to write online product reviews. Monetary incentives---a widely used extrinsic motivation in the business world---are not commonly used by online retailers to encourage consumers to write online product reviews. One plausible explanation is because of the cost of monetary incentives, albeit the trade-off between the cost of monetary incentives versus the benefit of having more online product reviews has not been examined. With a unique panel data set from a major Chinese online retailer that has been offering monetary incentives to encourage consumers to write product reviews, we examine how monetary incentives affect online product reviews and sales. Interestingly, we find that small rewards---less than 1.5 yuan for each product review, can increase product sales significantly. Our findings suggest that paying for product reviews can be an effective strategy for online retailers to increase sales

Monetary Incentives, Online Reviews, and Product Sales: An Empirical Investigation

Monetary incentives have been proposed as a motivator for online product reviewing behavior. However, the economic value of paying for reviews is unclear, and the trade-off between the tangible expenditure of paying for reviews and the potential value from increasing product sales has neither been established in the academic literature nor in practice. Using archival panel data from a major online retailer, this study takes advantage of a quasi-natural experiment to examine the relationship among monetary incentives, online reviews, and product sales. We show with a 2SLS method that the retailer’s decision to devaluate the monetary incentives for writing reviews reduced its product sales by 18.9% through decreasing the volume of reviews received dramatically, while it only saved 0.2% of its sales revenue from paying consumers less for reviews. We conclude that monetary incentives for writing reviews can enhance product sales, contributing to the emerging literature on online product reviews

Take It or Not? Impact of Taking Investments from Tech Giants on IT Startups’ Future Funding

While tech giants have become important external equity financing sources, it remains unclear whether IT-startups should take investments from tech giants. In this study we empirically examine how taking investments from tech giants influences future funding of IT-startups. Our results indicate that taking investments from tech giants significantly reduces the amount of funding IT-startups could obtain in the following rounds. Additionally, we find that social ties between IT-startups’ regions and locations with substantial capital will attenuate such negative impact of taking investments from tech giants. We further explore the mechanisms. Results suggest that when tech giants make investments in IT-startups, they predominate the new technologies by applying for more patents in the relevant fields and crowd out new investors. We contribute to the literature in IS by examining how investments from tech giants may influence the growth of IT-startups and how social ties may play a role in this interaction

Tempting Fate: Social Media Posts, Unfollowing, and Long-Term Sales

In this study, we examine how a firm’s decision to post on social media affects the propensity of its followers to (1) purchase its products and (2) unfollow the firm. Using a unique dataset from a large fashion retailer which frequently sends mass non-customized information-only posts on social media (i.e., non-coupons), findings indicate that such posts increase short-term purchases by 6%. However, these posts also increase followers’ propensity to unfollow the firm by 280%, significantly reducing long-term sales. Strikingly, this punitive effect of social media posting appears to manifest under very specific circumstances. Results indicate that these changes in unfollowing and long-term sales are larger if posts are sent in more crowded cities or during commuting hours (suggesting that the stress formed by personal crowding and the follower’s environment may play a key role in followers’ reactions to social media postings). These results underscore the potential downsides of sending blanket, non-customized, messages to followers, notably during times of intense psychological stress, as well as avenues to avoid such pitfalls

Cure or Poison? Impact of Identity Verification on the Creation of Fake Posts on Social Media

Identity verification is one of the tools social media platforms use to fight against the creation of fake posts, by making users more responsible for their behaviors on the Internet. However, does identity verification work as expected? With a unique dataset, we find that identity verification would significantly reduce users’ probability of creating fake posts, but only when users cannot obtain privileged credibility after verification. If identity verification is accompanied by privileged credibility, the association between identity verification and the creation of fake posts is significantly positive. Our explanation is that the benefit of privileged credibility may induce malicious users---who can easily cheat the verification system using fake identities---to manipulate their verified status before they create fake posts. An exogenous shock on users’ verification decision caused by a policy change provides us a unique context to find causal evidence

Tempting Fate: Social Media Posts, Unfollowing, and Long-Term Sales

In this study, we examine how a firm’s decision to post on social media affects the propensity of its followers to (1) purchase its products and (2) unfollow the firm. Using a unique dataset from a large fashion retailer which frequently sends mass non-customized information-only posts on social media (i.e., non-coupons), findings indicate that such posts increase short-term purchases by 6%. However, these posts also increase followers’ propensity to unfollow the firm by 280%, significantly reducing long-term sales. Strikingly, this punitive effect of social media posting appears to manifest under very specific circumstances. Results indicate that these changes in unfollowing and long-term sales are larger if posts are sent in more crowded cities or during commuting hours (suggesting that the stress formed by personal crowding and the follower’s environment may play a key role in followers’ reactions to social media postings). These results underscore the potential downsides of sending blanket, non-customized, messages to followers, notably during times of intense psychological stress, as well as avenues to avoid such pitfall