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The power of popularity: how the size of a virtual community adds to firm value
Author(s) -
Plangger Kirk
Publication year - 2012
Publication title -
journal of public affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.221
H-Index - 20
eISSN - 1479-1854
pISSN - 1472-3891
DOI - 10.1002/pa.1416
Subject(s) - popularity , social media , business , marketing , value (mathematics) , brand community , brand loyalty , advertising , loyalty , virtual community , brand management , brand equity , the internet , machine learning , world wide web , political science , computer science , law , psychology , social psychology
Customers are increasingly consuming and talking about products and services on online social networks. Thus, these online brand communities have become more important to marketers in their quest to increase future sales through loyalty and customer acquisition. Social media environments, such as Twitter and Facebook, seem to increase consumer loyalty by increasing the popularity of the brand, allowing marketers another way of differentiating. This paper fills a gap in the marketing literature by examining the effect of online brand communities on firm value by using information from the 2010 and the 2006 editions of the Fortune 500 listing as well as key statistics from Facebook and Twitter. The regression models presented show that there is a positive relationship between social media investment and firm value, especially in mature, highly competitive industries, especially for business‐to‐consumer industries. Copyright © 2012 John Wiley & Sons, Ltd.