How to Use Social Media

The Company

Today we're testing something different: a discussion of, and synthesis from, the latest academic research in marketing and psychology. Today's experiments draw from three primary papers:

1. Social Advertising Effectiveness Across Products
2. What Type of Purchase Do You Prefer to Share on Social Media: Experiential or Material?
3. Past, Present, and Future of Electronic Word-of-Mouth

The Experiment(s)

As you'd imagine, Social Advertising Effectiveness Across Products tested the effectiveness of paid social ads across different types of products, in fact, "71 products in 25 categories among more than 37 million users."

Perhaps as intuitively, What Type of Purchase Do You Prefer to Share on Social Media: Experiential or Material experimented on the frequency different product types are shared on social media. Three studies determined: sharing preferences, the role of social approval, and the role of personality on results.

Past, Present, and Future of Electronic Word-of-Mouth is a landmark overview of the recent paradigm shift from in-person Word-of-Mouth product sharing to online review systems. It offers insight into the current state of recommendation processes as well as, more importantly, the effects of EWOM on product sales.

The Results

Three papers with three groundbreaking results.

Paper one's findings are in the chart below, primarily massive ad performance differences across product types, with food, clothing, and cars topping the charts and credit card companies doing the worst. "Social cues" a.k.a. likes & comments accounted for 2% to 4.5% of those differences, with a larger impact on 'status' products over experiential products.

Paper two describes a similar effect: experiential goods are significantly more likely to get shared on social media than 'status' products. Also similar to the last paper, likes were used as a proxy for social approval. Experiential purchases earned more likes. This effect was moderated by the personality of the poster: the more they care about social image, the more often they shared their product experiences.

Paper three aggregates thousands of studies to show a major shift is taking place from ECOM to EWOM in the academic world, immediately reflected by a movement in the business universe. And for good reason. EWOM has a major impact on sales. More interesting, as suggested in the previous two studies, the content and poster of individual reviews matters more than aggregate ratings.

The Synthesis

Let's tie all that together. EWOM improves sales. EWOM frequently takes the form of social media sharing and advertising. Social cues and approval in the form of likes and comments heavily influence product sales, though experiential products are more likely to be shared and more likely to earn approval than status products.

The Application(s)

First of all, I encourage you to click the link above and at least skim the introduction of each of those papers. They're packed with practical information. Second, there are, as usual, a few main takeaways:

1. Consider your type of product when choosing how to advertise. Use UGC for experiential products, advertisements for status products.
2. Test audiences that care about their social image if you want more likes and have a socially acceptable product.
3. Get likes before conversions!