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The Impact of Earned Media on Demand: Evidence from a Natural Experiment
The Impact of Earned Media on Demand: Evidence from a Natural Experiment
November 18,2015Working Paper No. 3372
We leverage a temporary block of the Chinese microblogging platform Sina Weibo due to political events to estimate the causal effect of user-generated microblogging content on product demand in the context of TV show viewership. Using a set of difference-in-differences regressions, we show viewership decreased more strongly in geographical areas with a higher Sina Weibo penetration, and only for shows with a high activity level on Sina Weibo. We quantify the effect on viewership in units of comments on tweets (comments were disabled during the block) by instrumenting the number of relevant comments with a dummy for the time period of the block, and find an elasticity of 0.02. In terms of the behavioral mechanism, we find more pre-show microblogging activity increases demand, whereas the ability to engage in microblogging during showtime as a complementary activity to TV consumption does not affect product demand.