Seminar on “Advertising Processing in Social Media: From FGC, Consumer Online Engagement to Offline Purchase”

With the advertising paradigm shifts from paid media (e.g., sponsored search advertising) to earned media, advertising via social media platforms has become a predominant approach that firms apply in the contemporary marketplace. Building upon the evolving advertising processing theory, we focus on understanding the impact of firm-generated content (FGC) on consumer online engagement behavior (liking, commenting, and sharing), and the mediating effect of consumer online engagement on the link between FGC on consumer offline purchase decisions. Using a unique disaggregate product-level dataset collected in the motion picture industry from a leading Chinese social media, we empirically examine these relationships. We find that the types of consumer online engagement (liking, commenting, and sharing), as well as the level of engagement, is heavily contingent upon the types of firm advertising appeals. Specifically, informative FGC helps engage consumers at the lower level (e.g., liking), whereas emotional FGC facilitates consumer engagement at the higher level (e.g., sharing). We also identify a "value inequality" issue generated from the mediation effect played by consumer online engagement to the relationship between FGC and consumer offline purchase behavior. In particular, the positive mediation effect will take place only when consumer online engagement reaches beyond "liking". Our empirical findings provide practical solutions to the FGC ads design as well as social media advertising tactics development.