Study Shows Blogs, Social Networks Fuel Online Sales
A study by two researchers - Vasant Dhar and Elaine Chang - from the New York University Stern School of Business shows a direct correlation between user-generated content in blogs and social networks, and record sales.
In the study, they examine how online "chatter" impacted a sample of 108 albums for four weeks before and after their release dates.
"If an album has more than 40 blog posts it will have an above average level of sales. . . . Interestingly, though, if blog chatter is extremely high – above 240 posts – it is possible for an album to overcome the disadvantage of being released by an independent label. In fact, albums with such extreme highs in chatter correspond to sales even higher than major label, high chatter albums. However, even if chatter is relatively high for an independent label (above 40 posts), sales will be higher than the average for the sample. . . "
While the research applies specifically to the music industry, it presents a compelling case for businesses in all industries to consider how social media impacts marketing strategy. And for the underdogs and innovators, the study is an excellent example of how social media levels the playing field, and makes the size of your marketing budget less relevant.
See the full study here: Does Chatter Matter? The Impact of User Generated Content on Music Sales
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