When it comes to social media, consumers trust each other, not big brands


Marketing professor Koen Pauwels.

D’Amore-McKim School of Business Marketing Professor Koen Pauwels’ co-authored paper, “Improving Consumer Mind-Set Metrics and Shareholder Value through Social Media: The Different Roles of Owned and Earned,” was recently published in the Journal of Marketing. The paper focuses on the link between consumers, social media, and shareholder value.

Pauwels and his co-authors describe the impact of social media on stock market performance in three consumer mindset metrics: purchase intent, brand awareness, and consumer satisfaction.

The study found an important distinction between owned social media, a company’s own posts on their channels such as Facebook and Twitter, and earned social media, which is what consumers say about brands on the company channels. Customer comments, questions, or concerns is the more valuable of the two, having the potential to increase customer mindset metrics.

“Consumers look to their peers before making purchasing decisions, which is why earned social media is so valuable,” said Pauwels. “Both investors and consumers distrust companies who boast about themselves, because it’s hard to know what weaknesses they’re trying to hide.”

The findings from the study are diverse, and Pauwels believes they could be used to help marketers create more effective social strategies.

“If you have a good reputation, go ahead and post about your brand, but if you really want to increase purchase intent, let satisfied customers do the talking for you,” he said.

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