Effects of Traditional Advertising and Social Messages on Brand-Building Metrics and Customer Acquisition

de Vries Lisette, Gensler Sonja, Leeflang Peter S.H.

Abstract

This study examines the relative effectiveness of traditional advertising, impressionsgenerated through firm-to-consumer (F2C) messages on Facebook, and the volume andvalence of consumer-to-consumer (C2C) messages on Twitter and forums for brand-buildingand customer acquisition efforts. To a unique data set from a European telecom firm, theauthors apply vector autoregressive modeling. This modelling approach allows consideringthe interrelations among traditional advertising, F2C impressions, volume and valence ofC2C social messages. The results show that traditional advertising is most effective for bothbrand building and customer acquisition. Impressions generated through F2C social messagescomplement traditional advertising efforts. Thus, thoroughly orchestrating traditionaladvertising and a firm's social media activities may improve a firm's performance withrespect to building the brand and enabling customer acquisition. Moreover, firms canstimulate the volume and valence of messages among consumers through traditionaladvertising that in turn affect brand building and acquisition. These findings help managers toleverage the different types of messages more adequately.