Will firm`s marketing efforts on owned social media payoff? A quasi-experimental analysis of tourism products

Abstract

A growing number of travel agencies use social media to promote their services and reach target customers despite some doubt regarding the effectiveness of these tools. Nevertheless, most prior studies adopt a customer-centric perspective to explore the usefulness of earned social media run by third parties. Few have examined a firm`s active role in online social interactions. This paper distinguishes owned media from earned media by site ownerships and communication paths, and examines a firm`s marketing efforts on its owned Facebook brand page. Working with a leading travel agency, we collected a matched sample of products with Facebook marketing (treatment group) and those without Facebook marketing (control group). Using a quasi-experimental design and difference-in-difference estimation, we evaluate the effect of a firm`s efforts on Facebook marketing campaigns after controlling time-fixed selection bias and common time-series heterogeneity. The results show that Facebook campaign activities have a positive impact on sales of tourism products. Furthermore, based on the cognitive fit theory, sales are found to increase when a travel agency promotes tourism products that are highly structured, medium-priced, or medium-length, or that require more tourist involvement. Such effects are further examined across different quantiles of sales and in different time spans to see when product moderations are more prominent. The empirical findings facilitate decision-making of e-commerce managers in the tourism industry not only by justifying the effectiveness as well as budget allocation of owned social media marketing, but also by providing a rudimentary guidance on the product selection in Facebook marketing campaigns.