Despite its potential as a new source of competitive advantage, the performance implications of social media (SM) marketing (SMM) are not well understood. This study aims to investigate how and when SMM matters to firm performance, analysing the mediating role of product innovation (PI) and moderating the role of marketing innovation (MI) in business to business (B2B) small- and medium-sized enterprises (SMEs).
This paper used structural equation modelling analysis in STATA, using the Australian bureau of statistics data set of 4,956 SMEs which operate in the B2B environment.
The results reveal differential moderating effects of MI on the direct SMM–performance relationship. MI positively moderates internal SMM and SM use for promotion and branding on firm performance. MI also negatively moderates SM use for customer communication on firm performance, underscoring SMM constituting a double-edged sword. The indirect effects of internal SM use and SM use for promotion and branding, and customer involvement in new product development on performance via PI are significant when MI is absent.
Hence, B2B SMEs benefit from PI and existing SMM but do not benefit from dual PI and new MI.
By disaggregating SMM and explicating the mediating mechanism and moderating effects of MI, this study reveals how and under what conditions SMM matters to firm performance in B2B SMEs.
