Reports

Does Tweeting Impact the Bottom Line?

Shiyang Gong, Juanjuan Zhang, Ping Zhao, and Xuping Jiang, 2014, 14-111

Many companies today adopt tweeting as a new marketing tool. It remains unclear, however, whether tweets indeed improve firm performance. To explore this question, Shiyang Gong, Juanjuan Zhang, Ping Zhao, and Xuping Jiang study the impact of tweeting on TV show viewing.

Using the microblogging platform Weibo, the authors conduct a field experiment with a major global media company that produces documentary TV shows. They study the impact of two representative types of tweeting activities: (1) company tweets to its own Weibo followers and (2) retweets by Weibo users to their own follower networks. They randomize whether the company tweets about a show, and whether an influential Weibo user recruited for the experiment retweets the company’s message.

The authors find that both company tweets and influential retweets have significant and sizable impact on the company’s bottom line – they boost show viewing by 77% and 33%, respectively. Company tweets increase show viewing by attracting its Weibo followers to watch the show. Influential retweets increase show viewing by affecting those influentials’ own followers, and the effect is especially strong (a boost of 57% as opposed to 33%) if the original company tweet contains detailed broadcast information of the show. In addition, influential retweets bring new followers to the company, which in turn amplifies the effect of company tweets on show viewing. Influentials actively retweeted by their followers are particularly effective in this process.

This study has several managerial implications. First, the finding that tweets increase TV viewing suggests that tweeting can be a productive marketing device. Second, the results highlight a number of actionable tweeting strategies. Businesses should tweet about their products, and make their product tweets informative to help new customers navigate the purchase funnel. In addition, businesses should consider collaborating with microblogging “influentials”, users who are actively retweeted in their personal follower network. Finally, this study is relevant to microblogging platforms such as Twitter and Weibo. There have been concerns over the sustainability of their revenue models which are reliant on paid advertising. The authors’ findings suggest that charging a fee for business accounts is a potential source of revenue.

Shiyang Gong is a Ph.D. Candidate, School of Economics and Management, Tsinghua University. Juanjuan Zhang is the Epoch Foundation Professor of International Management and Associate Professor of Marketing, Sloan School of Management, Massachusetts Institute of Technology. Ping Zhao is Professor of Marketing, School of Economics and Management, Tsinghua University. Xuping Jiang is Professor of Marketing, School of Economics and Management, Tsinghua University.

Acknowledgments
The authors are indebted to Yubo Chen for his tremendous help throughout this study. The authors have received helpful comments from Martin Peitz, David Reiley, Ken Wilbur, Nathan Yang; seminar participants at Beihang University, Columbia University, Lehigh University, Microsoft Research NYC, Temple University, Tsinghua University; attendees of the 2013 ZEW Conference on the Economics of Information and Communication Technologies, 2014 American Marketing Association Conference, 2014 China India Insights Conference, 2014 Workshop on Social and Business Analytics, and 2014 Customer Insights Conference. The authors thank Boosen Social Marketing Company and the anonymous media company for their enthusiastic cooperation in the field experiment, and thank the National Natural Science Foundation of China (No. 71372045) for financial support. 

Related links

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Building the B[r]and: Understanding How Social Media Drives Consumer Engagement and Sales
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