Owned Social Media Advertising: Cannibalization and Competition

Abstract

Businesses often rely on owned social media (brand pages on networking sites) to advertise their brands, and multibrand companies frequently manage individual brand pages, rather than representing all company brands together on one firm page. Because advertising results in cross-brand effects, companies need to understand how such effects manifest across their pages. This study investigates the cross effects of owned social media advertising by distinguishing between intra- and interbrand portfolio scenarios. It also compares the effects between television advertising and owned social media advertising. With a focus on the U.S. soft drink market, this study reveals that brand page advertising results in cannibalization within company portfolios, whereas positive spillover results from television advertising. The cross effects migrate to brands outside the portfolios, thereby intensifying competition. Accounting for the combined effects of cannibalization and competition reveals that owned social media increase portfolio demand more effectively than television advertising overall, which implies some key managerial recommendations for developing brand page strategies.