A growing number of travel agencies in the tourism industry use social media to promote their services and reach target customers despite some doubt regarding the effectiveness of these tools. Nevertheless, most prior studies adopt a customer-centric perspective to explore the usefulness of earned social media (e.g., eWOM) and its influences on customer behavior. Few have examined a firm’s owned social media strategy (e.g., a Facebook brand page) in online social interactions. This paper distinguishes owned media from earned media by site ownerships and communication paths. We study a firm’s marketing efforts on its owned media (Facebook brand page) and evaluate the resulting effect on sales. Based on the cognitive fit theory, we further explore whether a firm can moderate such effects by promoting different types of products. Working with a leading travel agency in Taiwan, we collected a matched sample of products with Facebook marketing (treatment group) and those without Facebook marketing (control group). Using a quasi-experimental design and difference-in-difference (DID) estimation, we evaluate the effect of a firm’s efforts on Facebook marketing campaigns after controlling time-fixed selection bias and common time-series heterogeneity. While the method is powerful and intuitive, its validity largely relies on the common trend assumption. A concise discussion on caveats of DID estimation is provided to carefully examine our findings, as well as serve as a simple guidance for IS research. The results show that Facebook campaign activities have a positive impact on purchases of tourism products. Furthermore, sales are more likely to increase when a travel agency promotes tourism products that are highly structured, medium-priced, or medium-length, or that require more tourist involvement. Such effects are further examined across different quantiles of sales and in different time spans to see when product moderations are more prominent. The empirical findings facilitate decision-making of e-commerce managers in the tourism industry not only by justifying the effectiveness as well as budget allocation of owned social media marketing, but also by providing a rudimentary guidance on the product selection in Facebook marketing campaigns.

INTRODUCTION

Due to social media’s great popularity among consumers, it has become a high corporate priority. However, there is a significant degree of uncertainty among managers with respect to allocating efforts and budgets to social media (Paniagua and Sapena 2015). According to the Social Media Marketing Industry Report in 2013, 97% of marketers indicate that they participate in social media marketing, but only approximately one in four marketers claim that they are able to measure the return from their social media activities. Additionally, regarding the effectiveness of Facebook marketing, 37% of marketers agree that their Facebook efforts are effective, whereas the remainder is uncertain or has opposite opinions (Stelzner 2013). The same phenomenon is found in the tourism industry. Social media has dramatically changed how consumers plan and buy travel-related products (Buhalis and Law 2008). A study conducted by the Opinion Research Corporation indicates that 82% of respondents expressed that they had checked online reviews, blogs, and other online customer feedback before purchasing a travel-related product (eMarketer 2008). Research from Funsherpa Company illustrates the influence of social media on U.S. travelers, with 52% of travelers having changed their plans after researching their trip on social media sites (Bennett 2012). This culture change presses tourism businesses to incorporate social media to enrich their multichannel marketing strategies, and many are among the most active companies in the commercial use of social media (Dijkmans et al. 2015). The proliferation of social media use among tourism companies has raised questions as to how and what their social media efforts should be made, as well as the effect of their social media efforts, particularly with regard to the effect on sales. These questions require analytical and empirical answers from firms’ perspectives. However, a significant portion of the associated research is focused more on the customer than on the firm (Tiago and Verissimo 2014). Typical customer-centric studies are related to online product reviews in the form of user-generated content (UGC) or WOM. Most of these studies are mainly developed in the context of earned social media where customers are freely to create UGC. In this research, we are more interested in exploring tourism firms’ efforts on social media, and thus we focus on owned social media. Specifically, we adopt the following typology to distinguish owned media from earned media – who owns the site (Edelman 2010, Lovett and Staelin 2016, Colicev 2017) and who initiates the communication (Gallaugher and Ransbotham 2010).