Do Facebook Activities Increase Sales?

Facebook is a one of the most popular social media platforms and its increasing adoption by business is leading to the shift of traditional marketing to social marketing (Nair 2011). This study investigates two related questions: 1) whether the use of Facebook impacts companies’ sales; 2) whether the increased Facebook activities leads to higher companies’ sales. We find that, on average, companies adopted Facebook have sales 0.1% higher than those not. We also find if a company increases its Facebook posts (interactions) by 1%, its annual sales will increase by roughly 0.06% (0.03%). Our study provides evidence that Facebook activities are significantly and positively associated with companies’ annual sales though their impacts are relatively small in terms of effect size. We also provide caveats to the interpretation of our results and discuss directions for future research