The impact of social media marketing on new venture performance

Abstract

PurposeThe purpose of this paper is to examine the impact of social media marketing on new venture performance utilizing Structure-Conduct-Performance (SCP) theory.Design/methodology/approachA survey approach was employed, and questionnaires were sent out to the representatives of new ventures established in the previous six years at the time of data collection. Measures were adapted from SCP theory and the measurement model examined. A total of 248 responses were analyzed using structural equation modelling (LISREL 11).FindingsThe results indicate that social media marketing capabilities have a positive impact on the marketing performance of new ventures through a mediating effect of social media marketing performance. Thus, social media marketing performance affects new venture performance through marketing performance.Research limitations/implicationsThis research supports the vitality of social media in the lives of new firms and the importance of social media when executing marketing activities. The perceptive measurement of social media marketing capabilities on the firm level can be useful for new ventures to evaluate their competencies related to social media, and thus help firms improve those capabilities over time.Originality/valueThis research contributes to the existing knowledge on linkages between social media marketing capabilities and new venture performance acknowledging the role of a turbulent market environment. Therefore, the recognition of industry structure articulated by a turbulent market environment, social media marketing capabilities and social media support for competitive marketing strategy answers the question of how social media marketing capabilities drive competitive marketing strategy and subsequently influence performance.