Social media helps drive traditional media coverage, where each mention packs a bigger sales punch

CHICAGO, Nov. 9, 2012 /PRNewswire-USNewswire/ -- New research published in the Journal of Marketing Research for the first time reveals the interrelationship between earned media from traditional media sources such as press and online social media, and how these forms of earned media impact sales.

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Authors Andrew T. Stephen, of the University of Pittsburgh, and Jeff Galak, of Carnegie Mellon University, studied 14 months of sales and media data provided by Kiva.org, an online company that facilitates small loans between individual investors and people in underdeveloped countries. The authors considered a loan a sale, and categorized mentions of Kiva in newspapers, magazines, TV and radio as traditional earned media, and mentions of Kiva on blogs and online social networks and communities as social earned media.

They found that each mention of Kiva in traditional media had the largest per-event impact on sales. Over the time period studied, each unit of media publicity from a traditional media organization generated 894 additional sales from new customers and 403 additional sales from repeat customers. A blog mention, by comparison, generated 90 additional new sales and 63 additional repeat sales. A mention in an online community generated 99 additional new and 48 additional repeat sales. The authors say the disparity between media forms is not surprising because traditional media typically has a much broader reach than social media. However, since social media mentions were much more frequent than those in traditional media, the authors found that when this was taken into account earned media in social channels had a substantially larger impact on sales than traditional earned media did.

The study also found that social earned media helps drive traditional earned media. "Conventional wisdom is that traditional earned media makes a large mass of people aware of something and then gets them talking. However, our findings suggest that the reverse may be more likely than previously thought."

The findings have implications for marketers. The authors say encouraging customers to talk about a marketer's brands or services in social forums or social media can help lift sales and make traditional media coverage more likely to occur.

More information about the findings can be found in the study, "The Effects of Traditional and Social Earned Media on Sales: A Study of a Microlending Marketplace" can be found in the October 2012 issue of the Journal of Marketing Research.

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SOURCE American Marketing Association