Supporting New Product Launches With Social Media Communication and Online Advertising: Sales Volume and Profit Implications

The question of how important firms’ investments in digital communication formats are for the commercial success of new products remains unexplored in the product innovation management literature. Drawing on reactance theory, the authors examine the extent to which investments in social media commun...

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Bibliographic Details
Published inThe Journal of product innovation management Vol. 36; no. 2; pp. 172 - 195
Main Authors Gruner, Richard L., Vomberg, Arnd, Homburg, Christian, Lukas, Bryan A.
Format Journal Article
LanguageEnglish
Published Hoboken Blackwell Publishing Ltd 01.03.2019
Subjects
Advertising
Automobile industry
Automobile sales
Communication
Digital media
Innovations
Investments
Online advertising
Optimization
Product development
Reactance
Social networks
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Summary:The question of how important firms’ investments in digital communication formats are for the commercial success of new products remains unexplored in the product innovation management literature. Drawing on reactance theory, the authors examine the extent to which investments in social media communication and online advertising are related to the sales volume and profits of new products within six months of being launched. Using dyadic survey data, an analysis of new products launched by 122 consumer durable goods firms reveals that sales volume and profits of new products are associated with (1) social media communication in a positive but diminishing shape, and (2) online advertising in an inverted U‐shape. Further analyses show that those curvilinear relationships are steeper for social media communication and flatter for online advertising at respective (1) higher levels of customer product involvement and (2) lower levels of product superiority. The results imply that there is an optimal level of investment in social media communication and online advertising, with the optimum dependent on a new product’s consumer involvement and superiority levels.
ISSN:0737-6782
1540-5885
DOI:10.1111/jpim.12475