The U.S. automobile industry is increasing reliance on social media marketing and is ranked the highest one in traditional and digital advertising spending. Despite a significant body of research in social media, the effectiveness of social media in this competitive marketplace has not received the detailed examination. My dissertation seeks to fill in this gap by conducting two studies to examine the impact of social media on customers' engagement behaviors as well as firms' sale performance. My first essay examines the dynamic interactions between firm-generated content (FGC), user-generated content (UGC), and offline sales (light vehicles) in the setting of the firm's Facebook fan page in the U.S. automobile industry. The findings suggest that (1) FGC is more effective in influencing offline car sales than UGC, (2) offline car sales would trigger more FGC and UGC activities, and (3) there is a positive feedback effect between FGC and UGC. These findings vary across different forms of format presentation and content of post, suggesting that firms need to fully customize their social media strategy to reach their goals more efficiently. Furthermore, customers in different groups (luxury versus non-luxury) demonstrate dramatically different patterns. My second essay explores the dynamics of online word-of-mouth (WOM) and its spillover effects by considering the relative effects at the stages of customer awareness and consideration. The findings indicate that (1) online WOM at the stage of consideration has the stronger effect on offline car sales than online WOM at the stage of awareness, (2) spillover effects exist across both stages of awareness and consideration, though effects are heterogeneous in direction: positive spillover effects at the stage of awareness while negative spillover effects at the stage of consideration, and (3) at the stage of awareness, online WOM initiated by firms is more effective in influencing offline car sales than online WOM initiated by users. Furthermore, not every mechanism at Facebook (i.e., post, like, comment, and share) has the equal impact on offline car sales and these different mechanisms also influence how customers appreciate online WOM at the stage of consideration. Finally, the results vary significantly across origin of brand, market structure, and price factor.In summary, my dissertation offers valuable insights for firms on how to better develop their social media strategy to engage with their customers and boost offline car sales in this economically important industry. Furthermore, these two studies would also advance the literature by understanding further the dynamics of social media on offline sales of the durable or high-involvement products. Finally, the unique and rich data also allows me to test the underlying mechanism at work that will shed light on our theoretical understanding of the impact of social media from different perspectives.
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