Social Media Integration and E-Commerce Platform Performance: A Randomized Field Experiment

Abstract

E-commerce platforms can integrate with Facebook to let users directly comment on product pages using their Facebook accounts, a practice known as social media integration. Such integration can boost customer conversion by conveying credible information about product popularity and quality. However, due to the lack of control over the volume and content of user comments, social media integration might also hinder product sales. Given the potential risks and benefits, it is not clear whether an e-commerce platform should embrace social media integration on its website. In this study, we conduct a randomized field experiment in collaboration with a large e-commerce platform in the U.S. to examine the impact of social media integration (in the form of Facebook comment system) on users' shopping behaviors (e.g., adding a product to cart, placing an order). We find that, compared to those in the control group (who see the product page without Facebook comment system), customers in the treatment group (with Facebook comment system) on average have a significantly higher likelihood of adding product to cart (~6% increase) and placing an order (~10% increase). Furthermore, we find interesting heterogeneous treatment effects that align with social learning mechanism: the effect of the integrated Facebook comment system on customer conversion is positive when there are many comments, yet it is negative when there are few comments. Moreover, the positive effect of the integrated Facebook comment system on user conversion is stronger for new buyers than repeat customers. We further conduct difference-in-difference (DID) analysis and show that the Facebook comment system increases the overall demand for products in the experimental section of the platform. Our study contributes to the nascent research on the management of social media functions on online platforms and provides direct managerial implications to the practice.