How does social media influence car sales: the effects of firm-, user-, and professional-generated content

With the unprecedented influence of social media, firms are increasingly relying on social media as a channel for marketing interaction. While firm-generated content (FGC) has become a common tool, allowing brands to show consumers informative, exchangeable messages, online word-of-mouth, such as user-generated content (UGC) and professional-generated content (PGC), has also become a prevalent strategy with the popularity of social media platforms to provide trustworthy information and promote product sales. However, our understanding on how those three online marketing strategies interactively influence firm performance as well as the conditions under which these effects vary remains limited. Drawing on signaling theory, this study examines how FGC, UGC, and PGC interactively influence car sales in the automobile industry and how such effects are influenced by product quality cues, such as price and popularity. Based on the monthly data in 56 major car makers, we find the varying relationships among FGC, UGC, and PGC on car sales. Moreover, for low-priced cars, UGC has a stronger effect on car sales. In contrast, at a higher level of popularity, UGC has a greater positive impact on car sales, while PGC has a less negative impact on car sales. These findings have important implications for automotive brand marketers striving to increase car sales through multiple social media marketing channels. Marketers should evaluate cross-media strategy by including its interplay with different types of social media and monitoring word-of-mouth of cars across different price ranges and popularity.