Linking Firm-Generated Social Media Content to Sales and Returns

The growing importance of content marketing on social media has made it imperative for firms to evaluate the effectiveness of their posts in driving business performance. However, academic research offers limited insight into how firm-generated content on social platforms affects performance metrics such as product sales and returns. This paper contributes to addressing that gap by examining the relationship between social media marketing on Facebook and transactional outcomes, using data from the online channel of a luxury fashion accessory manufacturer. We augment the transaction data with the firm’s Facebook posts, classifying them as either informative or persuasive. Informative posts are further distinguished based on whether they pertain to standard (ISP posts) or customizable (ICP posts) product features. Our results indicate that ISP posts are associated with increases in sales and returns, whereas ICP posts are associated with decreases in both outcomes. Moreover, we find that the associations of ISP posts with sales and returns are weaker when accompanied by persuasive content, whereas persuasive content only attenuates the relationship between ICP posts and returns. These findings are robust across alternative model specifications and estimation methods and offer valuable managerial insights for firms seeking to optimize their social media marketing strategies. This paper was accepted by D. J. Wu, information systems. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.01432 .