The Effect of Online Engagement on New Product Performance: Why Fit and Brand Longevity Matter

Abstract

Recently, customer engagement in social media has received great attention in the literature, with the aim of understanding its impact on brands and product performance. However, little attention has been given to the potential dark side of engagement, especially in the context of new product launches. This article thus examines the relationships among customer engagement in social media, new product fit, brand longevity, and new product performance. Using the music industry as a context, this research shows that the small but positive effect of prerelease social media engagement on record sales becomes strong when the level of fit is high; for newer artists, engagement can even have a negative effect when fit is very low. This study uses a sample of 181 albums launched by 158 artists in the Canadian market between 2016 and 2017 and a data set that combines weekly record sales, social media activity, and Spotify's audio features analysis. A regression discontinuity–inspired model that accounts for endogeneity concerns is applied to test the hypotheses. This study contributes to the literature by providing robust empirical evidence of a possible negative side of engagement. Although engagement can help artists succeed, it might interfere with their artistic freedom.