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The Influence of Social Media on Charitable Fundraising

Ernan Haruvy 1

Peter T.L. Popkowski Leszczyc2

June, 2018

1
Professor of Marketing, The University of Texas at Dallas, Jindal School of Management, SM
32, 800 W. Campbell Rd., Richardson, TX 75080. Phone: 972-883-4865; Fax: 972-883-6727;
E-mail: eharuvy@utdallas.edu

2
Eric Geddes Professor of Business, School of Business, University of Alberta, Edmonton, AB,
Canada, T6G 2R6; Phone: (780) 492-1866; E-mail: ppopkows@ualberta.ca.
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The Influence of Social Media on Charitable Fundraising

Charities increasingly utilize social media tools in fundraising. This research studies three

mechanisms by which Facebook “likes” affect charitable behavior: (1) signaling, (2)

commitment escalation, and (3) social contagion. The first study manipulates the number of

Facebook likes on a page and finds support for a signaling effect of the aggregate Facebook likes

on charitable intent. The second study manipulates whether the visitor clicks a Facebook like or

not. Results show that the act of “liking” a fundraising page in and of itself escalates one’s

charitable intent. An auction field study sells artwork created by under-privileged youth, and

utilizes Facebook and Facebook likes to disseminate word of mouth about these auctions. Results

show that social media increases willingness to pay (WTP) in charity auctions. The number of

Facebook likes has a direct signaling effect and an indirect social contagion effect on WTP, as

Facebook friends pass on information, through their likes. Consistent with the commitment

escalation hypothesis, clicking a Facebook like has a direct effect on WTP.

Keywords: Social Media, Facebook Likes, Charity, Auctions.

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Social media platforms are effective in disseminating information (Toubia and Stephen

2013), particularly for social causes (Madianou 2013; Saxton and Wang 2014) and non-profits

(Novak 2012; Valverde et al. 2013). With recent increased competition for charity dollars, non-

profits are increasingly interested in using social media, such as Facebook and Twitter, to

promote their causes. A recent survey (Ganim Barnes, 2014) studying the usage of social media

among US charities indicates that 98% of the largest charities use at least one form of social

media. This increased ubiquity of social media usage by non-profits has resulted in a sizable

literature on ways that non-profits can implement social media as part of their strategy (e.g.,

Briones et al. 2011; Campbell, Lambright, and Wells 2014; Waters et al. 2009; Young 2017).

However, evidence on the effectiveness of social media campaigns on fundraising is sparse.1

Therefore, the main objective of the current research is to fill this void and focus on the impact

of social media on fundraising. In particular, we will focus on the effect of Facebook likes on

charitable fundraising. We focus on Facebook likes as the primary social media vehicle, with

over 2.2 billion active users monthly (Zephoria 2018). Facebook likes can affect charitable

intentions in several different ways.

First, we build on the knowledge that consumer actions in the charity space inevitably

involve some social signalling (e.g., Jung et al., 2017). Specifically, aggregate Facebook likes

provide a signal or social proof about the quality, value, virtue, or credibility of the charity.

Establishing credibility is of great importance to charities, and emerging evidence suggests social

media can help provide that credibility (Curtis et al. 2010). A demonstration that Facebook likes

1
Saxton and Wang (2014) studied factors that influence donations to charity on Facebook causes. (Causes.com is a
social network environment created by Facebook where people can organize campaigns, support fundraisers, and
petitions.) They found that, in general, donations are small and are influenced by network effects (i.e., the number of
members on Facebook causes) and website specific variables, but not the charity’s financial capacity and efficiency
ratios. In addition, there is some evidence of how information sharing affects individuals’ contributions to
crowdfunding campaign (Tan, Lu, and Tan 2017).
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can assist charities with establishing credibility is an important contribution to charity marketing.

Towards that end, in the first study, we isolate and study the effect of the signal of the total

number of Facebook likes on charitable intention.

Second, we examine commitment escalation-- a well known and generally exploitable

behavior. As an example, in Baca-Motes et al. (2013), a small symbolic commitment by hotel

guests towards environmental towel use resulted in subsequent substantial change in behavior.

Likewise, the act of clicking on the Facebook like may escalate one’s liking or commitment to

the site. In a Facebook-related commitment example, members of Starbucks’ Facebook page

spend more than nonmembers (Lipsman et al. 2012). In Manchanda et al. (2015), customers were

invited to join a firm’s new online community. Comparing purchases before and after launch for

those who joined versus those who did not join revealed that approximately a fifth of post-launch

revenue was attributed to the act of joining. Although social media is particularly effective in

relationship escalation (Sosik and Bazarova, 2014), John et al. (2017) argue these proven effects

could be due to self-selection of those prone to commitment escalation being more likely to click

a Facebook like. In that study, controlling for self-selection, the authors found no commitment

escalation. This finding suggests that people who elect to like a cause might be predisposed to

acting in a manner favorable to that cause. Thus, distinguishing the impact of the Facebook like

from the self-selection requires careful analysis, which we conduct in the second study, where

we isolate the effect of self-selection from escalation of charitable intent due to clicking on the

Facebook like.

Third, Facebook likes may have an indirect social-contagion effect, as Facebook friends pass

on information, through their likes or messages. Clicking the Facebook like influences Facebook

impressions-- defined as the number of times a Facebook posting is displayed-- leading to

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information dissemination known as social contagion (Aral 2011; Aral and Walker, 2011;

Iyengar et al. 2011).

We pursue these questions with auction experiments. Auction experiments (e.g., Bagchi and

Cheema, 2012; Schmidt et al. 2014) have been shown effective at assessing bidder sensitivities

to contextual and social stimuli. In Study 3 —an auction field study— we measure the indirect

effect as well as the direct effects and further disentangle the signaling effect from the escalation

effect when the two co-exist in the field. We distinguish the escalation effect of clicking a

Facebook like from the signaling effect of total likes, by accounting for the potential role of

Facebook impressions and bidding intensity in mediating the effect of Facebook likes on WTP.

We highlight several contributions. First, we show that the total number of Facebook likes

sends an informative signal to potential donors, resulting in (1) increased favorability towards the

promoted charity and (2) a higher willingness to contribute and pay to the charity. Second, we

test for and observe that clicking the Facebook like has a positive effect on one’s commitment to

the cause. This finding extends the work by John et al. (2017), who reported that clicking the

Facebook like does not increase brand favorability in a for-profit setting. Specifically, we show

that clicking the Facebook like results in a significantly higher willingness to contribute to

charity, and it marginally increases favorability. In testing for this effect, controlling for self-

selection is crucial, because as those who click on the Facebook like are generally more

favorable towards a cause. Third, we test for the direct and indirect effect of Facebook likes on

fundraising revenue and WTP in a field study. We find that the total number of likes has both a

direct signaling effect and an indirect effect through Facebook impression and bidding intensity

on WTP. In addition, we find a direct effect of clicking the Facebook like that is two to three

times greater than that for the total number of Facebook likes, depending on the category.
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THE EXPERIMENTS

We conducted three studies with the simple objective of testing whether a social media

campaign on Facebook can improve fundraising outcomes. We used charity settings for all three

studies and focused on the impact of the Facebook likes. The first was an online study that

examined the impact of different Facebook like totals on consumers’ perceptions and intentions

to contribute to charity. This format allowed us to test for a potential signaling effect of the total

number of likes. The second study was an online study that examined the impact of clicking the

Facebook like on consumers’ intentions to contribute to the charity and their perceptions of the

charity. Finally, the third study was a field study that examined the influence of social media,

through Facebook likes, on fundraising outcome in a real-world setting.

STUDY 1

Objectives and hypothesis of Study 1. The objective of this study was to test for a potential

signaling effect of the total number of Facebook likes on willingness to contribute. The number

of Facebook likes may provide a signal to potential buyers (Bikhchandani et al. 1998; Zhang and

Liu 2012), which could pertain to quality, value, or to social benefit (Mathwick et al. 2008;

Brandtzaeg and Haugstveit 2014).

These arguments suggest that the total number of Facebook likes sends a signal to visitors

about the quality or value of the charity, resulting in favorable perceptions towards the charity.

Our first hypothesis involves a direct relationship between social media activity and preference

for the entity being promoted. We operationalize preference towards the charity by measuring

respondents perceived favorability towards (1) the charity’s activities, (2) the charity’s efforts,

and (3) the charity’s organization, on a 7-point scale (1 = very unfavorable, 7 = very favorable).

We state our first hypothesis as follows:

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H1: The total number of Facebook likes increases favorability towards the promoted charity.

We posit that this favorability is associated with intended contribution. We use four

measures to estimate respondents' willingness to contribute to charity: (1) intent to volunteer, (2)

intent to spread favorable WOM, (3) intent to pay attention to communication, and (4) intent to

donate (all measured based on a 7-point scale, where 1 = very unlikely, 7 = very likely).

Hypothesis 2 follows:

H2: The total number of Facebook likes increases willingness to contribute to charity.

Design of Study 1. To test the signaling effect of the total number of Facebook likes on

intention to donate (volunteer), we conducted an online experiment with a 2 x 2 design along the

dimensions {High Facebook like total, Low Facebook like total} x {High charity familiarity,

Low charity familiarity}. The number of Facebook likes was either 13 million or 13. The two

charities selected were St. Jude (high familiarity) and Rohinga (low familiarity), with the

expectation that a potential signaling effect of the total number of Facebook likes is stronger for

an unfamiliar charity. We recruited 400 participants from Amazon Mechanical Turk (MTurk)

and randomly assigned them to the four different conditions. Participants first answered a

number of demographic and charitable orientation questions. Next, we showed them a picture of

the front page from each charity, with the number of Facebook likes—either 13 million or 13—

clearly visible at the top of the page (see Figure 1). Participants then answered questions about

their familiarity with the charity, perceptions about the number of Facebook likes, and the

constructs measuring favorability and intent to contribute as stated earlier. Web Appendix A

provides all stimuli and questions used.

Results and Discussion of Study 1

The results of Study 1 are shown in Table 1. The top part of Table 1 provides the results for
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the effect of the number of Facebook likes on respondents’ perceptions of the favorability of the

charity’s activities, efforts, and organization (H1). The t-tests show that perceived favorability of

Figure 1. Stimuli used for Study 1 --Different charities and number of Facebook Likes

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activities, effort, and organization is significantly higher with a higher number of Facebook likes

than with a low number of likes. These results hold both for the familiar and the unfamiliar

charity. Although the favorability is higher for the more familiar charity (for both low and high

numbers of Facebook likes), the increase is somewhat higher for the unfamiliar charity.

The bottom part of Table 1 shows the results for intentions to volunteer, spread favorable

WOM, pay attention to communication, and donate to the charity (H2). The t-tests show that all

intentions are statistically significantly higher with a higher number of Facebook likes, in support

Table 1. Results of Study 1 Perceived Favorability and Intensions

H1: Total number of Facebook likes increases favorability of the promoted entity
Low familiar charity – Rohinga
Perceived favor-
ability of charity's: Activities Efforts Organization
Low number of likes 4.98 (.15) 4.98 (.14) 4.84 (.14)
High number of likes 5.72 (.10) 5.69 (.10) 5.64 (.10)
T-test 4.17 4.11 4.66
p-value <0.001 <0.001 <0.001
High familiar charity -- St. Jude
Low number of likes 5.42 (.15) 5.46 (.16) 5.45 (.15)
High number of likes 5.86 (.11) 5.94 (.10) 6.01 (0.10)
T-test 2.33 2.61 3.11
p-value 0.021 0.009 0.002
H2: The total number of Facebook likes increases willingness to contribute.
Low familiar charity – Rohinga
Spread favorable Pay attention to Donate
Willingness to: Volunteer WOM communication
Low number of likes 3.56 (.18) 3.72 (.18) 3.86 (.19) 3.81 (.22)
High number of likes 4.22 (.20) 4.42 (.19) 4.78 (.19) 4.64 (.25)
T-test 2.47 2.68 3.42 2.48
p-value .015 .008 .001 .015
High familiar charity -- St. Jude
Low number of likes 3.95 (.20) 4.32 (0.21) 4.12 (.20) 4.42 (.24)
High number of likes 4.71 (.20) 5.15 (0.18) 4.93 (.19) 4.90 (.24)
T-test 2.69 3.01 2.96 1.41
p-value .008 .003 .004 0.162
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of H2 for the unfamiliar charity. For the familiar charity, we find partial support for H2, because

all except for intentions to donate are significantly higher. Note that the intention to donate is

higher for the more familiar charity (with both low and high numbers of Facebook likes).

Thus, we find strong support for a signaling effect of the number of Facebook likes, and this

effect is stronger for the unfamiliar charity than for the familiar charity.

STUDY 2

Objectives and hypothesis of Study 2. The objective of Study 2 was to determine whether

clicking a Facebook like escalates a bidder’s commitment to a cause. We consider the possibility

that social media content may enhance one’s emotional connection to the item for sale, which

may lead to the act of clicking a Facebook like having a positive effect on one’s commitment to

the cause (Seidman 2013). The need to belong is a major motivator for Facebook use

(Baumeister and Leary 1995), as is self-presentation (Zhao, Grasmuck, and Martin 2008). Users

who wish to satisfy their need to belong tend to engage in strategic self-presentation and click

Facebook likes they deem as enhancing their image (Utz et al. 2012). Once an individual links

his self-image to an item, the value he or she places on this item may increase. In for-profit

situations, however, clicking a Facebook like does not cause a person to view a brand more

favorably (John et al. 2017). Specifically, John et al. (2017) asked participants recruited from

MTurk to click a Facebook like for a brand (three studies with three different brands: Coca-Cola,

Pepsi, and Burt’s Bees). They controlled incentives to click like (zero, 1 cent, 5 cents, or 50

cents2) as well as separating intent to click like from actually clicking like. The authors found

that clicking like for a brand on Facebook did not impact brand attitude or intent to purchase.

The major difference between the for-profit and cause-related setting we are investigating is that

2
We used the 50-cents incentives in our study, as in John et al. (2017)
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in the current setting, consumers are more likely to have an emotional connection, and social

media is more beneficial when consumers have an emotional attachment (Bernritter et al. 2016).

In addition to commitment escalation being cause-specific, commitment escalation may be a

community-related phenomenon. Manchanda et al. (2015) provide evidence for this community

effect. Specifically, they find a significant increase in customer expenditures after customers join

the firm’s community. They also discuss and largely rule out self-selection and other alternative

explanations.

Commitment escalation is not observed in all cases. For example, Kristofferson, White, and

Peloza (2014) studied token commitment in a cause-related setting. Although they did not study

Facebook likes explicitly, they showed that making a token commitment (publically wearing a

pin; signing a petition) to a charitable initiative did not increase people’s subsequent propensity

to provide meaningful support to that cause in terms of donation and volunteer labor.

Nonetheless, considerable evidence shows that involvement with charity has a positive impact on

commitment3 (Liu and Aaker 2008; Choi and Jing-Ann 2010).

The latter is also consistent with results by Popkowski Leszczyc and Rothkopf (2010), who

find that charitable bidders act as volunteer shills trying to drive-up prices in charity auctions.

Therefore, clicking the Facebook like is likely to escalate one’s commitment to the cause,

resulting in higher WTP. We state the hypotheses as:

H3: Clicking the Facebook like increases favorability towards the promoted charity.

H4: Clicking the Facebook like increases willingness to contribute to the charity.

Design of Study 2. To examine the impact of clicking the Facebook like on a person’s

willingness to contribute to charity, controlling for self-selection is essential. That is, those who

3
Choi and Jing-Ann (2010) found that past volunteering significantly influences current volunteering, and Liu and
Aake (2008) reported that a higher donation follows higher volunteerism.
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like the charity more are more likely to click like and are also more willing to contribute to the

charity. To do so, we used an approach similar to that used by John et al. (2017). In one of our

experimental conditions, we incentivized participants to click on the Facebook like, ensuring that

participants who did like the charity, as well as those who did not, clicked on the Facebook like,

thereby avoiding self-selection (this manipulation was successful as 62 out of 65 participants

clicked the like). This condition is compared to one in which participants did not leave a like.

We also included a condition that placed no restriction on clicking the Facebook like, to examine

the extent of self-selection—whether people who click are more likely to contribute.

We again recruited 190 participants from MTurk and randomly assigned them to three

conditions. The approach used was similar to that in John et al. (2017). Participants were asked

to visit a website for a charity and were told they needed to answer some questions.

The first condition placed no restrictions on clicking on the Facebook like (and participants

were told they were allowed to do so if they wanted to). In the second condition, participants

were asked to click on the Facebook like on the website, for which they received $0.50. Finally,

in the third (control) condition, they were asked to visit the webpage and not to touch anything

on the website. The random division resulted in allocations of 69, 62, and 59 to the three

conditions, respectively.4

Next, all participants answered several demographic questions and questions related to the

charity’s Facebook page, and completed the dependent variable constructs measuring

favorability and intent to contribute, identical to those in Study 1. Web Appendix B provides all

stimuli and questions used.

Results and discussion of Study 2. We included the first condition, without restrictions on

4
In condition 2, three of the 65 participants were deleted because they did not click the like button even though they
were asked to. In the third condition, 12 of the 71 subjects were excluded because they clicked on the like button
even though they were told not to.
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clicking the Facebook like, to examine self-selection. We found evidence consistent with self-

selection (but not sufficient to show self-selection) as bidders who clicked like were more likely

to contribute. Out of the 69 participants in this condition, 19 did not click on the Facebook like

and 50 did. Those who did click on the Facebook like were more willing to volunteer (Mlike =

4.8 vs. MNoLike = 3.4, T= 3.23, p = .002), spread favorable WOM (Mlike = 5.4 vs. MNoLike = 3.6,

T= 4.12, p < .001), pay attention to communication (Mlike = 5.3 vs. MNoLike = 3.2, T=5.34 ,p <

.001), and donate (Mlike = 5.0 vs. MNoLike = 3.3, T= 2.05, p = .049).

These tests are all based on within-treatment differences and cannot be separated from

subjects self-selecting into clicking the Facebook like or not. Therefore, we next compare

conditions 2 (all participants clicked the Facebook like) and 3 (no participants clicked the

Facebook like), excluding self-selection as an explanation for increased contribution to the

charity. The results of these comparisons and related tests for H3 and H4 are provided in Table

2. The results indicate that those who did clicked on the Facebook like had a higher willingness

to contribute, in support of H4. However, we only find marginal support for the assertion that

clicking the Facebook like results in higher favorability towards the charity. Hence, any

escalation of commitment obtained from clicking the Facebook like appears to be more intrinsic

rather than due to higher favorability towards the organization.

Finally, comparing the willingness to contribute in condition 1 for those who self-selected to

click on the Facebook like with condition 2 (all clicked on the Facebook like), we observe an

insignificant difference (Mlike, condition 1 = 5.0 vs. Mlike, condition 2 = 4.6, T=1.15, p=0.254).

Studies 1 and 2 provide evidence of a signalling effect (the direct effect of the total number of

Facebook likes) and escalation commitment (a direct effect of clicking a Facebook like).

These results suggest that, at least in the short run, we can influence consumers’ or donors’
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Table 2. Results of Study 2 Perceived Favorability and Intensions

H3: Clicking the Facebook like increases favorability of the promoted charity.
Perceived favor-
ability of charity's: Activities Efforts Organization
Facebook like left 6.097 6.032 6.129
(n=62) (.175) (.184) (.163)
No Facebook like left 5.627 5.695 5.746
(n=59) (.186) (.186) (.170)
T-test 1.84 1.29 1.62
p-value .068 .199 .107
H4: Clicking the Facebook like increases willingness to contribute to the promoted charity.
Spread favorable Pay attention to Donate
Willingness to: Volunteer WOM communication
Facebook like left 4.210 4.823 4.823 4.581
(n=62) (.236) (.215) (.215) (.227)
No Facebook like left 3.373 4.119 4.136 3.814
(n=59) (.232) (.241) (.248) (.241)
T-test 2.53 -2.19 -2.10 -2.31
p-value .013 .031 .038 .023

willingness to contribute. A different question is to what extent these results may have a longer-

term effect. We note that the signaling effect of the total number of Facebook likes also

increased participants’ favorability towards the charity, suggesting these effects may have a more

lasting impact. For clicking the Facebook like, the impact on favorability was only marginally

significant, suggesting this effect may be weaker or short-lived.

Overall, the results of the first two studies provide evidence of both a direct effect of the total

number of Facebook likes and of clicking the Facebook like. Next, we conducted a field study in

which we tested these hypotheses in a field setting, as well as testing the indirect social-

contagion effect of Facebook likes that requires a field study.

STUDY 3

Objectives and hypothesis of Study 3. The primary goal of Study 3 was to be able to increase

fundraising revenues through effective use of social media. That is, we are interested in whether
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we can increase charity revenues by increasing total Facebook likes. We focused on both the

impact of the total number of Facebook likes and of clicking the Facebook like on bidders’ WTP

in auctions. The total number of Facebook likes may have both a direct signaling effect and an

indirect social-contagion effect on WTP, whereas we expected the effect of clicking the

Facebook like to have a direct effect on WTP by escalating one’s commitment to the cause.

Recall that we also examined the direct signaling effect in Study 1 and the impact of an

individual’s clicking the Facebook like in Study 2. In this study, we investigate both signalling

and commitment escalation and add the indirect social-contagion effect on WTP.

Conceptual framework. Our model explicitly captures three potential ways that Facebook

likes increase WTP. Specifically, we include terms for the following: the signalling effect as

captured by the direct effect of total Facebook likes, commitment escalation captured by the

direct effect of clicking the Facebook like, and the social contagion as captured by the mediating

role of Facebook impressions and bidder intensity in the relationship between Facebook likes

and WTP. Including all three terms allows us to determine whether the effect of the total number

of Facebook likes on WTP is due to signalling, commitment escalation, or social contagion.

We focus on two outcome measures: (1) WTP and (2) bidding intensity. We quantify the

impact of social media on each of these and examine a possible mediating role of impressions

and bidding intensity, defined as the number of bids divided by the number of bidders, in

affecting WTP. We illustrate these relationships and the resulting hypotheses in Figure 2.

Direct effect of total number of Facebook likes and clicking the Facebook like on WTP.

First, as in Study 1, we tested H2 to determine whether the total number of Facebook likes has a

positive effect on bidders’ WTP (parallel to willingness to donate in Study 1). We tested whether

a direct-information-value effect is transmitted through social media that impacts quality

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Figure 2. A conceptual model of the impact of Facebook likes on bidders’ WTP in auctions.

Clicking
Facebook
a2* H5 (+) Likes H4 (+)

Total Facebook a1, H6 Facebook d21 Bidding b2 WTP

Likes Impressions Intensity

c' H2 (+)
b1

*Alphanumeric coefficients are from mediation analyses

perception of the charity or, in the case of artwork, the expected future resale value. For art,

social media takes on an added dimension of providing a narrative on the artist herself. This

narrative has a direct impact on the value of the art, and when the narrative about the artist’s life

changes, so does the value of the paintings, sometimes drastically (e.g., Espinosa 2015). In the

present case, highlighting the artists’ plight could have added to the perceived value of the items.

That is, the direct information value from the number of Facebook likes—transmitted through

social media-- impacts the item’s quality or expected future resale value.

Next, as in Study 2, we tested H4—that clicking the Facebook like increases a bidder’s WTP

(parallel to willingness to donate in Study 2). As discussed above, we expected clicking the

Facebook like to increase a bidder’s emotional connection to the item for sale and thereby have a

positive effect on their WTP. We expected these emotional connections to be particularly

important for art work.

Indirect social-contagion effect of total number of Facebook likes on WTP. Third, Facebook

likes tend to result in Facebook impressions, leading to information dissemination, online WOM,
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and social contagion (Aral 2011; Aral and Walker 2011; Iyengar et al. 2011). We expected this

social-contagion effect to result in increased bidding activity and in turn higher WTP. We first

considered the impact on bidding intensity, followed by a test of the mediating role of Facebook

impressions and bidding intensity on WTP.

New Facebook likes show up as recommendations in the sidebar of some friends. The

Facebook news feed algorithm shows content to a fraction of friends (based on factors such as

friends, frequency of contact, common interests, etc.) who will see a particular post and may in

turn pass on this information to other friends. Higher bidding intensity is commonly observed

and is critical for revenue generation in charity auctions (Haruvy and Popkowski Leszczyc 2009;

Popkowski Leszczyc and Rothkopf 2010). The integration of social network activity into bidding

behavior has only recently received attention (Hinz and Spann 2008; Dass, Reddy and Iacobucci

2014). Social networks are in turn influenced by online WOM (Rui et al. 2013; Trusov et al.

2009). Facebook likes in particular result in more viral content and WOM as interested parties

interact (Berger and Schwartz 2011; Wojnicki and Godes 2008), which should attract more

bidders to the website. This effect will result in increased traffic to the auction website,

translating to additional bids and higher bidding intensity—a key mediator in our analysis—

resulting in increased WTP (Dholakia and Soltysinski 2001, Dholakia, Basuroy, and Soltysinski

2002). Our fifth hypothesis pertains to the impact of social media exposure on increased bidding

intensity, measured here as the number of bids divided by the number of bidders.

H5. The total number of Facebook likes increases bidding intensity in auctions.

Mediation. We investigate the role of Facebook impressions and bidding intensity as

potential mediators in the relationship between Facebook likes and WTP. The mediation tests are

central to our ability to draw conclusions. Depending on the outcome of the mediation tests, the
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findings can potentially answer an important question in art-market circles. An unmediated

direct effect of social media activity on ending prices would imply social media activity by its

own virtue—perhaps the mere existence of a Facebook presence—enhances the expected value

of the item to the buyer, whereas a mediated effect suggests social media increases Facebook

impressions and bidding intensity, resulting in higher WTP.

Bidding intensity. A body of research demonstrates an important regularity in auctions:

bidding intensity affects auction outcomes, particularly value assessment (Ariely and Simonson

2003; Cheema, Chakravarti, and Sinha 2012; Dholakia and Soltysinski 2001; Dholakia et al.

2002). In our framework, we examine whether such bidding intensity mediates auction

antecedents. Although no extant research establishes such a mediation, some related evidence

shows the probability of losing in an auction mediates auction antecedents. Specifically,

Steinhart et al. (2013) found the degree of perceived risk of losing mediates the effects of

winning orientation and cognitive-load conditions on the offered bid.

Facebook Impressions. We further consider the possibility that social media contributes to

ending prices by increasing impressions. Padilla-Meléndez and del Águila-Obra (2013) show

that museums can increase impressions with the use of social media, referred to as value

creation. The expectation is that the additional visibility (impressions) resulting from social

media will increase traffic to the auctions and therefore bidding intensity, which results in higher

WTP. This finding is consistent with findings by Bockstedt and Goh (2011), who analyzed a set

of eBay auction listings for identical products and found that enhancing visibility for auctions in

the auction listing affects auction outcomes (price premiums) through increased traffic.

Serial mediation. Next, we consider the process through which total Facebook likes

influence bidders’ WTP. Total Facebook likes result in viral activity (Facebook impressions) as
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Facebook friends pass on information, through their likes or messages, which in turn influences

the bidding intensity, which results in increased WTP. We therefore test for serial mediation

whereby Facebook likes first influence Facebook impressions, which in turn influence bidding

intensity, which results in increased WTP. In the empirical analysis, we test for the possibility

that the results are only partially mediated and that both direct and indirect effects are present.

Thus, we have the following hypothesis:

H6. The impact of Facebook likes on willingness to pay is serially mediated through

Facebook impressions and in turn by bidding intensity.

Mediating role of Facebook impressions and bidding intensity on the relationship between

clicking the Facebook like and WTP. Similar to the above discussion for total number of

Facebook likes, bidding intensity might mediate the impact of clicking the Facebook like on

WTP. Different from the total number of Facebook likes (which are expected to result in viral

activity), we do not expect clicking the Facebook like to have a significant impact on Facebook

impressions. However, because clicking the Facebook like increases the emotional connection to

the item for sale, bidders would likely increase the bidding intensity.

Design of Study 3. We harnessed the power of Facebook likes to raise funds for under-

privileged children in a major Canadian metropolitan area. Specifically, as part of the study,

children participating in off-school programs in a specific metropolitan area produced artwork

and shared emotional tidbits about their life stories. Combined with additional donated products

and an outpouring of support from the community, we launched a Facebook campaign for

comparable groups of children, with particular aspects varied for experimental manipulation and

with Facebook likes varying across groups. Subsequently, we auctioned off the artwork (and

additional products), integrated with Facebook pages and Facebook likes. With this design, we
 19

aimed to study the impact of social media on fundraising in charity auctions. Specifically, we

quantified the impact of Facebook likes and Facebook impressions5 on WTP, and we teased out

the impact of the total number of Facebook likes versus the effect of clicking the Facebook like.

As reported earlier, we found that aggregate Facebook likes provide a signal about the

quality or value of the charity (Study 1). By contrast, clicking the Facebook like escalates one’s

liking or commitment to the cause. We separated out the direct effects of signaling versus

escalation. We further looked at the indirect effect of Facebook likes and disentangled the social

value of Facebook likes due to increased perceived value of the charity (signal effect) versus

increased exposure (social contagion effect). We accomplished the latter by measuring Facebook

impression (due to Facebook likes) and accounted for the potential mediating role of Facebook

impressions and bidding intensity in mediating the effect of Facebook likes on WTP.

We collaborated with the Canadian branch of a major internationally known charity, which

focuses on children and youth from disadvantaged circumstances, with the aim of fostering

opportunities, confidence, and skills through community-based services. Their programs consist

primarily of special off-school programs for under-privileged children in local communities,

involving annual expenditures of 7 million to 8 million dollars in Canada.

In collaboration with this charity, we organized a series of art events with different groups of

children participating in off-school programs. Next, the artwork created by the different groups

of children were displayed on different Facebook pages (one for each different group of children)

especially created for this event, as well as additional items donated. Finally, we employed a

locally well-known website for charity auctions, and auctioned off the artwork (and additional

products), integrated with Facebook pages and Facebook likes.

5
The term Facebook impressions captures the number of times a post is seen (on a user’s News Feed, ticker, or
directly on his or her Facebook page).
 20

We carefully designed the study with different experimental cohorts and several control

cohorts. We organized the art events as part of the programs offered by clubs. Altogether, six

different clubs of the same charity were involved. The six clubs are located in distinct

neighborhoods within one major North American metropolitan area. A club consists of a

clubhouse and staff members that organize events for children to participate during school

holidays and after school. These programs are on a drop-by basis and are free of charge to all

children. Children pre-register for events during school vacations. The current event took place

during a vacation period.

The children’s legal guardians received an announcement for the art program with

information about the fundraiser several days before the event and provided consent forms for

the children to participate and for pictures to be used. The consent form included a short survey

asking the children about their favorite hobbies, their happiest memory, saddest story, their

favorite person, and their personal hero. We used this information later in the Facebook pages

created for this event.

We hired and trained a staff of art teachers and art students to run the art event. Each art

event lasted for approximately one and a half hours, at the start of which children received a

short lecture about different types of painters. Subsequently children divided into groups of

eight to ten children based on similar age groups (one or two groups per location). Twelve

different groups with a total of 107 children participated in the event. A few children did not

receive consent to participate and were provided with an alternative activity during the art event.

Each group of children created at least 10 artworks. Each artwork was the product of their group

effort rather than an individual’s effort and was promoted as such to have a broader appeal to

bidders. We randomly assigned the 12 different groups into two control groups and 10 treatment
 21

groups. To measure the impact of social media, we created Facebook pages for the 10 treatment

groups, where we displayed the artwork.

Each Facebook page was designed such that the format and structure of each group’s page

were identical (the order and the type of posting on each page were identical, the artwork and

information was group specific). The cover or heading of each page consisted of a collage of the

group’s artwork. Figure 3 provides several examples.

Figure 3. Different Facebook page heading consisting of a collage of the group’s artwork.

Next, a Facebook post announced the event, indicating its purpose and the charity involved

and a link to the website where the artwork would be sold, including a video specifically created

for this event. An announcement followed, asking people to like the page. To generate

excitement and buzz, the announcement indicated 50 cents would be donated to the charity for
 22

every Facebook like of this page, up to $1,000.6

We next posted information about the specific group, including a group picture of the

children creating the art, followed by pictures of the teaching staff.7 Subsequent postings showed

each artwork, including a picture and a description of the artwork and the date the item would be

sold in an online auction (with a link to the website), as well as simultaneous auctions for

additional donated products for this group (see Figure 4). Each posting for artwork was followed

by quotes from the children (e.g., their happiest and saddest memories), obtained from the survey

on the consent form, and pictures of the children in action (see Figure 5).

Figure 4. Example of Facebook announcement of charity auction

We created Facebook pages to enhance the emotional connection with the event and to

encourage clicking the like button and to disseminate WOM about the fundraiser. The specific

data we obtained from social media include the number of Facebook likes and Facebook

impressions obtained directly from Facebook statistics. Facebook impressions consist of

6
Facebook likes, generated through a social media campaign, can be quite costly (Hoffman and Fodor 2010). In the
present settings, we acquired Facebook likes from the local community at a cost of 50 cents per like, following John
et al. (2017).
7
One of the Facebook pages did not have a picture. However, results were not significantly different, suggesting
results are not due to the pictures used.
 23

information passed on through friends to others via a Facebook like. That is, Facebook

impressions occur when a person sees a post due to a like or a message by a friend.8

Figure 5. Example of quotes from artists

We created the Facebook pages several weeks before the start of the auctions to allow for the

social media effects, that is, for the number of Facebook likes to accumulate and WOM to

disseminate. During this time period, we contacted either by email or phone all legal guardians

of the children who participated, to inform them about the upcoming auctions and to encourage

them to spread the news, by clicking the Facebook like. We also distributed a flyer showing the

artwork and announcing the dates of the auctions at the different clubs of the charity.

The next step was to sell the artwork and additional items through a locally well-known

8
Facebook impressions fall into classifications of paid, organic, or viral. Paid impressions are the result of paid ads.
Organic impressions are direct exposures to our Facebook posts, whereas viral impressions are passed on by friends
to others via a Facebook like. Our focus is on the viral information that is passed on by friends.
 24

website for charity auctions. We sent e-mails to all members of the auction website with

information about the upcoming auctions and details about the fundraiser, including links to the

Facebook pages. At the time of this study, the website had approximately 10,000 members. We

provided similar incentives to the members for clicking on the Facebook like (a 50-centsdonation

to the charity, up to $1,000).

We conducted 480 auctions (120 auctions for artwork and 360 auctions for additional items)

during May and June 2016. The additional items consisted of multiple identical items and

included mostly gift certificates and some gift items. All items were randomly assigned and

counter-balanced across groups such that, for example, gift certificates of the same value were

sold for each group. Artworks were group specific but were randomly assigned to the different

time periods for the group. For each group, we sold 40 items (10 artworks and 30 other items).

We created 12 different seller accounts for each of the groups (10 experimental and two control

groups). Each seller had a special seller page with information about the charity and the specific

group and links to his or her Facebook page. For the control group, we only provided

information about the charity. In all instances, we clearly indicated all donations would go to the

local chapter of the charity (not to the individual groups). At any given time, we only ran

auctions for four different sellers simultaneously. At any given time, we ran 16 different

auctions, that is, four auctions for four different groups, consisting of one auction for an artwork

and three auctions for other items. Each auction lasted two days, all with starting and ending

times at 10:00 pm. When new auctions were listed, we also pre-announced the next set of 16

upcoming auctions (such that bidders could see the auctions and the starting dates but could not

bid on the auctions).

The title of the auction clearly identified the specific group. In addition, each auction
 25

provided information about the group, a picture of the group,9 a picture and description of the

artwork, and a link to the Facebook page that included a picture of the Facebook cover with the

number of Facebook likes the page had received (which was dynamically updated) and a button

to leave a Facebook like (see Figure 6).

Figure 6. Example of part of ascending bid auction showing Facebook interface

9
Each artwork was a joint collaboration between group members—hence a group picture. For the cleanest
comparison between treatments, the pictures and descriptions of each group would have to be identical. They are as
similar as possible, but they are not identical. Differences between pictures might be an antecedent for the difference
between likes for different groups. The antecedents for likes are outside the scope of this paper. They could be part
historical accident, part idiosyncratic differences in families and social ties of the group members to bidders, or in
differences between the pictures. Although we cannot shed light on the cause of the differences in likes between
groups, other than historical accident, we can say they lead to differences in impressions and bids.
 26

Experimental Manipulations

We have a panel of auctions for 12 groups (labeled groups 1-12) observed over 30 periods

(60 days). The main variable we manipulated in our experiment is the number of Facebook likes,

both between groups (within a period) and within groups (over time).

First, we varied the number of Facebook likes between groups through the presence (groups

1-10) or absence (groups 11 and 12) of a Facebook page and resulting Facebook likes. The two

control groups (groups 11 and 12) did not have a Facebook page, whereas the 10 treatment

groups (groups 1-10) did.

Second, the initial starting points of Facebook likes for the 10 treatment groups varied by

design. We varied the initial number of Facebook likes by inducing a different number of likes

for different groups prior to the start of the experiment. We did so by sending out e-mails

encouraging people to leave likes for specific groups’ Facebook pages.

Third, the actual number of Facebook likes increased naturally over time across the 10

treatment groups, as people left likes for different groups. Naturally, late auctions had more

Facebook likes than early auctions. Table 3 summarizes these three experimental manipulations

and shows the distribution across different groups. Following the actual distribution of initial

likes, groups are classified into groups with low and high numbers of initial Facebook likes. The

third manipulation—due to the time aspect of the experiment—resulted in an increase in the

number of Facebook likes over the initial number, resulting in a classification of groups into

those with high and low changes in Facebook likes.

The experiment took place over a two-month period. As mentioned above, we always ran

auctions for four groups simultaneously. Auctions for any specific group had a duration of two

days, followed by four days of inactivity (during which we ran auctions for other groups) before
 27

the next set of auctions for that group started. In total, we held 10 sets of auctions for each

group. The same four groups were always matched together (to keep the time between set of

auctions constant), but the order of the auctions varied (which influences the order in which

auctions were displayed on the website). Other donated products, consisting of gift certificates

Table 3. Three different Experimental Manipulations across different Groups

(1) Facebook Page (2) Initial Likes (3) Increase in Likes

Groups Facebook Classification Initial no. Change in Ending no.
Presence Initial likes Likes Likes Likes
1 Yes High 48 High 57
2 Yes High 48 Low 53
3 Yes Low 39 High 60
4 Yes High 43 High 53
5 Yes High 45 High 54
6 Yes High 43 Low 48
7 Yes Low 36 Low 42
8 Yes Low 39 Low 43
9 Yes Low 35 High 44
10 Yes Low 39 Low 45
11 No Control 0 Control 0
12 No Control 0 Control 0

and gift items, were counter-balanced across groups and time periods, such that the value of the

items was the same for each group and across time periods. For each group, we sold the

identical value in gift certificates and close to the identical value for the gift items. The value of

all items sold at any specific time period was also almost identical.

Data Obtained from Field Study

The information obtained from the auctions include the bidding histories (with number of

bids and bidders) and ending prices. We also obtained clickstream data showing the pages
 28

visited by different visitors to the website. Critically, clickstream data provided us with

information on which bidders clicked the Facebook like (by clicking on the link in the auction).

We combine the auction data with the Facebook data in a panel data set. This data set

includes the timing and the amount of the bids, the total number of Facebook likes and Facebook

impressions at any point of time a bid was placed, as well as an indicator that the bidder clicked

the Facebook like.

The effect of self-selection in Study 3. As in Study 1, the issue of self-selection was a central

concern in Study 3, because bidders who liked the cause and were willing to pay a premium for

the cause were also more likely to click the Facebook like (Bapna and Umyarov 2015; John et al.

2017; Mochon et al. 2017). Although Study 1 demonstrated that escalation trumps self-selection,

distinguishing the effect of clicking the like button from a self-selection effect in Study 3 is

important. The most suitable approach to deal with self-selection is random assignment.

Although we randomly assigned groups and products over time, we were unable to randomize

bidders to different auctions (treatment conditions). Therefore, we included charitable intent,

propensity to bid in auctions for the current charity, and new member to control for self-

selection, that is, the likelihood that those bidders were more likely to leave a like and also bid

more. Charitable intent controls for the fact that more charitable bidders tend to be willing to pay

higher prices in charity auctions (Haruvy and Popkowski Leszczyc 2009; Popkowski Leszczyc

and Rothkopf 2010). Propenstity to bid in auctions for the current charity controls for the fact

that supporters of the charity involved were willing to pay higher prices. Finally, new member

controls for those who self-selected into the current event to bid in auctions for specific artwork.

Empirical Analyses

Summary Statistics. Before conducting analyses at the bid level, we want to determine the
 29

impact of Facebook likes and impressions on the revenue to the charity, by focusing on auction

ending prices. We begin by examining the effect of the mere presence of a Facebook page on

ending price and bidding intensity, as a first test corresponding to H2 and H5 (we subsequently

examine the impact on bidders’ WTP).

The statistics and p-values for statistical significance are summarized in Table 4. Test

statistics are reported for three different product categories and show that ending prices were

significantly higher in auctions for groups with a Facebook page present for artwork and gift

items (consistent with H2) but not for gift certificates. Similar to H5, bidding intensity was

significantly higher in auctions for groups with a Facebook page present for artwork and

marginally significant for gift items but not for gift certificates.

Table 4. The impact of the Presence of a Facebook page on Ending prices and Bidding
Intensity in auctions.
H1: Ending Prices H3: Bidding Intensity
Product Facebook N Mean Price T-testa Mean Bid T-test
Category Page (Std. Error) Intensity
Yes 79 3.041 1.574
(100) (.360) p=0.002 (.125) p<0.001
Artwork
No 14 1.501 1.095
(20) (.347) (.074)
Yes 167 23.667 1.734
Gift (168) (1.526) p=0.468 (.061) p=0.400
Certificates No 31 23.854 1.702
(3.818) (.109)
Yes 140 5.489 1.780
(.415) p<0.001 (.081) p=0.091
Gift items
No 27 3.414 1.580
(.324) (.124)
a
p-values are based on one-sided t-test with unequal variances.

These hypotheses test for the positive effect of the presence of a Facebook page (rather than
 30

the number of Facebook likes) on ending prices in auctions (H2) and on bidding intensity (H5).

The results provide strong initial support for H2 and H5 for artwork and gift items.

The finding that the presence of a Facebook page is not significant for gift certificates is not

surprising. Facebook likes are less informative due to the clear value of the certificates, and an

emotional connection is lacking because, unlike the artwork, the certificates are not associated

with the children (especially because the auction proceeds go to the charity rather than to the

specific groups).

Number of initial Facebook likes. We next examine the influence of the number of Facebook

likes (the second manipulation in Table 3). We manipulated the number of Facebook likes across

groups to induce variation in the number of initial likes. The treatment groups were divided into

five groups with a low number of initial Facebook likes and five groups with a high number of

initial likes (see Table 3). Table 5 shows significantly higher ending prices for auctions with a

high number of initial Facebook likes (as compared to a low number of initial likes) for artwork

and gift items (in support for H2). Whereas previous analyses compared the treatment versus the

control group, these analyses only compare the treatment groups, providing a (stronger) test of

the influence of the number of Facebook likes.

Table 5. Average ending prices in auctions with a low vs. high number of initial
Facebook likesa.
No. of initial Artwork Gift Gift items
Facebook likes Certificates
Low $2.002 $23.668 $4.729
(0.274) (2.168) (0.304)
n=37 n=82 n=70
High $3.956 $23.769 $6.248
(0.601) (2.185) (0.764)
n=42 n=84 n=70
T-test p=0.002 p=0.487 p=0.034
a Only observations with positive likes are included (N=385); the control group is excluded
 31

Regression Analysis of Influence of Social Media

Influence of social media on ending price at the auction level. To test the signal effect of the

total number of Facebook likes (Total Likes) on ending prices, we start with simple regression

models that estimate the relationship between ending price and the number of Facebook likes, as

well as the potential mediators Facebook impressions and bidding intensity for the different

product categories used above. The dependent variable is the selling price in the auction, where

each auction is one observation (results are provided in Table 6).

First, considering the results of the base model without potential mediators, we see that total

likes increased ending prices for the first two categories, consistent with the t-test reported earlier

in the paper. Furthermore, the results indicate both Facebook impressions and bidding intensity

influenced ending prices for the same categories. However, the significance of total likes

disappears when adding Facebook impressions and bidding intensity, whereas adding bidding

intensity does not affect the significance or magnitude of impressions or the other way around,

indicating either Facebook impressions or bidding intensity or both can serve as mediators for

total likes. We will formally provide mediation analysis below.

Influence of social media on WTP. To test our hypotheses and to determine the impact of a

bidder clicking the Facebook like, we next focus on analyses at the bid level. The effect of

clicking the Facebook like is only observable in the bid-level analysis and is expected to be

significant because it enforces the bidders’ commitment to the charity. We are also concerned

with self-selection, which is primarily discernible through bid-level analysis. In addition, the

total number of Facebook likes is a signal10 that should have an impact on individual WTP as

well as ending prices.

10
By contrast, Facebook impressions are not a signal, but rather an indication of the amount of WOM, and thus
should have an impact on ending price but not necessarily on individual bids, or at least the effect will be weaker.
 32

In this section, we report on bid-level analysis to estimate a formal model of the effect of

social media on WTP. The empirical analysis uses bid-history data and dynamically updates the

number of cumulative likes over time. We also integrate clickstream data, such that we can use

data on individual bidders clicking the Facebook like. As such, we distinguish between the effect

of a bidder clicking the Facebook like and the total number of displayed likes by others. Finally,

we include several variables to control for self-selection.

Table 6. Auction-specific Analysis: Influence of Total Likes on Ending Pricea

Base Model Base Model Model

Without potential Including Including both
Variables Mediators Impression mediators
Gift items (N=167)
Intercept 2.73*** <.001 3.07*** <0.001 0.97 0.25
Total Likes 0.07*** <.001 0.00 0.95 -0.03 0.46
FB Impressions 0.01** 0.05 0.01*** 0.01
Bidding Intensity 1.92*** <.001
Paintings (N=93)
Intercept 1.08 0.16 1.37 0.08 1.00 0.06
Total Likes 0.05** 0.02 -0.01 0.81 -0.02 0.46
FB Impressions 0.004* 0.09 0.003* 0.08
Bidding Intensity 1.80*** <.001
Gift Certificates (N=198)
Intercept 23.81*** <.001 23.72*** <.001 13.14 <.001
Total Likes 0.00 0.97 0.02 0.93 0.01 0.96
FB Impressions -0.002 0.90 -0.002 0.84
Bidding Intensity 7.76*** <.001
aParameter estimates and p-values. Number of auctions = 458.

Self-selection. A potential concern with the current data is the issue of self-selection, because

bidders who like the cause and are willing to pay a premium for it are also more likely to leave a

like (Bapna and Umyarov 2015; John et al. 2017; Mochon et al. 2017). The most suitable

approach to deal with self-selection is random assignment. Although we randomly assigned

groups and products over time, we were unable to randomize bidders to different auctions
 33

(treatment conditions). Instead, we include charitable intent, propensity to bid in auctions for the

current charity, and new member as control variables in our analysis. In particular, we include a

measure of charitable intent, because people who are more charitable tend to be willing to pay

higher prices in charity auctions (Haruvy and Popkowski Leszczyc 2009; Popkowski Leszczyc

and Rothkopf 2010). The measure of charitable intent is based on the proportion of bids in

charity auctions versus non-charity auctions (for the identical product) based on bidding histories

during the past 14 years on the website. Propensity to bid in auctions for the current charity

adjusts for the liking of the current charity. Propensity to bid is the proportion of bids on the

current charity compared to three other charities (based on a different study selling identical

items for four different charities). Finally, new member is a dummy variable that indicates

whether a bidder is a new member who just became a member for the current fundraising event,

and may have a higher propensity bid in these auctions.

We estimate a simple linear regression model with the bid amount as the dependent variable.

We include the self-selection variables Charitable Intent and New Member (propensity to bid in

the focal charity was dropped due to insignificance). The variables of interest include Total

Likes (the total number of likes at the time of the bid), Click Like (a dummy variable indicating

whether the bidder clicked on the Facebook like for the group of the auction they were bidding

in), and Facebook Impressions (the number of impressions at the time of the bid). The results

are displayed in Table 7. We also include Day, which is a measure of the number of days since

the start of the auction event. This time trend measures the impact on WTP, because bidders’

interest for auctioned items may vary over time. Finally, we include category-specific fixed

effects and interactions between the category-specific variables and the variables of interest.

Results show that, in support of H2, total likes have a major impact on WTP for paintings
 34

and gift items (once we allow for bidding intensity in the model) but not for gift certificates with

clear monetary values and a lack of emotional connection (as opposed to artwork).

We also find a positive effect for clicking the Facebook like for paintings (in support of H4)

but not for gift certificates or gift items. The positive effect for paintings is expected because

social media enhances the emotional connection with the painting, which influences commitment

to the cause. This connection is likely to be even stronger for the paintings in the present study

because the artists are disadvantaged children.

Table 7. Results of Total number of Facebook Likes and Clicking the Facebook like on
WTP (N = 3400)
Base Model Base Model Base Model
Without potential Including Impression Including both
Mediators mediators
Effect Estimate P-value Estimate P-value Estimate P-value
Charitable Intent 0.152 0.205 0.186 0.117 0.018 0.869
New Member 0.143** 0.017 0.135** 0.022 0.151** 0.005
Category: Gift Items -0.320 0.156 -0.339 0.139 -0.416** 0.048
Category: Paintings -0.962* 0.060 -1.499** 0.003 -1.768** 0.000
Total Likes * Gift Items 0.004 0.268 0.008* 0.077 0.009** 0.028
Total Likes * Paintings 0.096** <.0001 0.153** <.001 0.168** <.001
Total Likes * Gift -0.002 0.633 0.002 0.676 -0.001 0.725
Certificates
FB impressions × Gift -0.0002* 0.076 -0.0004** 0.000
Items
FB impressions × -0.0028** <.001 -0.0037** <.001
Paintings
FB impressions × Gift -0.0002 0.105 -0.0002** 0.022
Certificates
Click Like* Gift Items -0.024 0.621 -0.022 0.643 -0.010 0.830
Click Like* Paintings 0.228** 0.016 0.202** 0.030 0.178** 0.038
Click Like* Gift -0.086** 0.015 -0.086** 0.014 0.016 0.613
Certificates
Day * Gift Items 0.000 0.927 -0.001 0.557 -0.002 0.301
Day * Paintings -0.005 0.194 -0.051** <.001 -0.068** <.001
Day * Gift Certificates -0.002 0.191 -0.003 0.041 -0.002 0.115
Bidding Intensity 0.347** <.001

We find that Facebook impressions have a negative effect on WTP for all three product
 35

categories. At first glance, these results seem to be inconsistent with the results for the analysis

of ending prices reported in Table 6. However, although we expect a positive effect on ending

price, the effect on WTP need not be positive. Individual bidders are not necessarily going to be

influenced by the number of impressions. The number of impressions—different from the

number of Facebook likes, which is a signal—need not positively influence a bidder`s WTP.

Instead, the effect of Facebook impressions on final price more likely arises through bidding

intensity. That is, Facebook impressions disseminate information, which attracts more bidders

and increases the bidding intensity.

The bidding intensity, when it mediates a click on like directly without impressions-- appears

to have a negative effect on WTP, possibly because bidders are discouraged by the increased

competition and feel they have a lower chance of winning (consistent with Garcia and Tor 2009

and Häubl and Popkowski Leszczyc 2018). However, when impressions are added to the

mediation path along with bidding intensity, the combined path does positively mediate likes

towards higher WTP, consistent with the idea of impressions serving to increase information

dissemination and thus increasing bidding intensity.

Influence of total likes on bidding intensity. To test for the impact of social media exposure

on increased bidding intensity, we estimate a regression model with bidding intensity (the

number of bids divided by the number of bidders) as the dependent variable. We focus on the

effect of total likes on bidding intensity while including as control variables most of the same

variables included in the previous model. In support of H5, we observe a highly significant

effect of total likes on bidding intensity (β = 0.009, p=.002). In addition, as expected, charitable

intent is highly significant (β = 0.409, p<.001), indicating more charitable bidders bid more

aggressively; however, new members bid less aggressively (β = -0.210, p=.001). We also run a
 36

similar model that includes Facebook impressions, which also significantly influenced bidder

intensity (β = 0.0004, p<.001). However, total likes become insignificant once we add Facebook

impressions to the model (β = 0.001, p=.703). These results show that social media exposure

through total likes and impressions both influence bidding intensity. However, the effect of total

likes appears to be mediated by Facebook impressions, which we examine next.

Mediation Analysis

We next conduct mediation analysis to determine whether Facebook impressions and bidding

intensity mediate the direct effects of Facebook likes. This approach allows us to test whether

the direct effect (social proof or signal effect) of Facebook likes is still present after we control

for the effect on bidding intensity.

To test H6—whether the impact of the total number of Facebook likes on WTP is serially

mediated through Facebook impressions and in turn by bidding intensity—we conduct serial

mediation analysis (Hayes 2013) using the bootstrap approach by Preacher and Hayes (2008).

More specifically, we test whether the positive effect of total likes on WTP goes through

Facebook impressions and increased bidding intensity.

Presenting the mediation analysis using the framework presented by Figure 2 is useful. The

indirect effect a1b1 denotes the impact of total likes on WTP as mediated by Facebook

impressions, the indirect effect a2b2 denotes the impact of total likes on WTP as mediated by

bidding intensity, and the indirect effect a1d21b2 denotes the impact of total likes on WTP as

mediated by both mediators.

We summarize the results of the mediation analyses in Table 8. We run different models

testing for single mediators and multiple (serial) mediators for both total likes and click like. The

results indicate a significant indirect effect of total likes on WTP through the two mediators,
 37

Facebook impressions and bidding intensity, (a1 × d21 × b2 = 0.0003), and the 95% confidence

interval excludes zero (0.0002 to 0.0006).

Hence, we find support for H6. After adding the two mediators, the effect of total likes for

paintings (Table 7) increases from 0.096 to 0.168. This finding suggests the impact of total likes

is partially mediated and that total likes has both a positive direct signaling effect on WTP, a

negative indirect effect of Facebook impressions through bidding intensity, and a positive

indirect effect through impressions and intensity.

Table 8. Results of Mediation Analysis of effect of Total Likes and Own Likes on WTP

Mediated Mediator(s) Indirect Value 95% Confidence

explanatory Effect Interval
variable
Total Likes FB Impressions a1b1 -0.0000 CI (-0.0014 – 0.0012)
Total Likes Bidding Intensity a2b2 -0.0004 CI (-0.0001 – 0.0013)
Total Likes Impression  a1d21b2 0.0003** CI (0.0002 – 0.0006)
Bidding Intensity
Click Like FB Impressions a1b1 0.0000 CI (-0.0014 – 0.0020)
Click Like Bidding Intensity a2b2 -0.0245** CI (-0.0394 – (-0.0136))
Click Like FB Impressions  a1d21b2 -0.0003 CI (-0.0011 – 0.0003)
Bidding Intensity

Looking at the mediation analysis for click like, we see that click like remains significant

after adding bidding intensity. This finding suggests click like also has both a direct and indirect

(through bidding intensity) effect on WTP.

We separated out the signaling effect of the total number of Facebook likes and the

escalation effect due to a bidder clicking a Facebook like and find both have a direct positive

effect on WTP. This finding suggests the increase in WTP is due both to the signaling value of

Facebook likes—which positively influences the item’s quality or expected future resale value—

and to commitment escalation. We further identified the social contagion effect, by accounting
 38

for the effect of Facebook impressions and bidding intensity in mediating the effect of Facebook

likes on WTP.

GENERAL DISCUSSION

The Goal of the Present Investigation

Companies have long practiced social media marketing for the purpose of increasing

exposure and awareness (Mangold and Faulds 2009). Non-profit marketing soon followed suit.

From the early days of social media, charities and other non-profit organizations have asked

people to like their Facebook pages. When asked in interviews about the purpose of such social

media actions (Hou and Lampe 2015), managers of non-profit organizations cite public

engagement, increased awareness, community-building, and action mobilization. Indeed, social

media activism has resulted in some impressive social changes (Dewey 2014) but has been more

elusive in charity fundraising. In terms of cold hard cash, charities’ great expectations from

social media have resulted in somewhat of a letdown. This letdown resulted in the inevitable

backlash against social-media “slacktivism.” For example, UNICEF Sweden ran an ad campaign

in 2013 with the ad “Like us on Facebook and we will vaccinate zero children against polio. We

have nothing against likes but vaccine costs money” (Khazan 2013).

Our objective was first and foremost to improve our ability to raise funds for charity through

social media. We wanted to map the path from a Facebook like to money raised for charity.

The Findings of the Present Investigation

Towards our goal, we first tried to isolate the value of a like in increasing charitable

intention. We isolated two effects—the signaling effect that comes from seeing a higher number

of likes (Study 1), and the commitment-escalation effect that arises from clicking on the

Facebook like (separate from self-selection, which we addressed in that study).

 39

We next wanted to place these effects in the context of an actual fundraising effort so that we

could map social media influences to these two effects but the effects in turn could be mapped

into cash raised. For the specific fundraising environment, we selected an auction setting. Past

works (e.g., Haruvy and Popkowski Leszczyc 2009; Popkowski Leszczyc and Rothkopf 2010)

have demonstrated that auctions are very useful for raising funds for charity. This study was the

first attempt to incorporate social media into these efforts.

Overall, adding a Facebook feature in our auctions was successful. We found a positive

effect on ending prices with the introduction of Facebook to auctions. Average selling prices

were over 30% higher than for two control groups without Facebook pages (and likes).

We found that auction revenues were a function of bidder participation, bidding intensity,

and WTP—and we identify the impact of social media on each of these elements, with special

attention to the mediating role of Facebook impressions and bidding intensity. Interestingly, we

found a strong and positive direct effect of the total number of Facebook likes on WTP and

ending prices, as well as a positive indirect effect through Facebook impression and bidding

intensity, where the latter serves to mediate the effect of Facebook likes on WTP. This finding

suggests both increased exposure to the cause and an increased perceived value of the cause. In

addition, we found that clicking the Facebook like has a direct effect on WTP by escalating one’s

commitment to the cause, as well as an indirect effect through bidding intensity.

Lastly, we found the effect of social media was most beneficial for products with which

bidders had emotional attachments rather than universally, which is consistent with Bernritter et

al. (2016), who showed that consumer behavior with respect to Facebook likes for non-profit

brands is fundamentally different than for for-profit brands, because consumers on social media

prefer communicating warmth.

 40

Other results from the auction platform were more nuanced. Facebook impressions are

especially difficult to nail down. Most importantly, total likes and click like have both a direct

and indirect effect on WTP—total likes mediated through Facebook impression and bidding

intensity, and click like mediated through bidding intensity.

Facebook impressions surprisingly had a negative effect on prices (both controlling for likes

and not controlling for them, and other modeling assumptions). They therefore do not directly

mediate total likes or click like. However, they clearly positively affect bidding intensity;

therefore, combined with bidding intensity, they mediate total likes in a positive way to affect

WTP. Click like, however, is mediated directly through bidding intensity. The effect of click

like is more than twice that of the total likes for paintings and more than three times bigger for

gift certificates. We can interpret the finding that click like is directly mediated by bidding

intensity to mean click like (after controlling for self-selection) led to increased commitment or

engagement, specifically commitment to visit the website and bid. Total likes provide a signal

that increase the ending prices for paintings and gift items but not for gift certificates, where the

value is established. However, the direct effect of click like remains significant, suggesting both

a direct and indirect impact on WTP.

Managerial Implications

As our opening paragraph illustrated, if the goal of a social media campaign is fundraising,

charity managers should have a clear mapping from the efforts of the campaign to charitable

intent and, finally, to cash. A social media campaign without a clear mapping can easily backfire,

as illustrated in the opening example of UNICEF.

We started out with two direct effects that can convert Facebook likes to charitable intent.

The first was signaling and the second was commitment escalation. Signaling is most appropriate
 41

when the quality of the charity, its efforts, or its benefits are not fully known to the prospective

donor. Then the number of likes can serve as a signal to reduce perceived risk or uncertainty.

Clearly, if this route is to be taken, the number of Facebook likes should be made prominent on

the site, and the connection to quality should be implied or inferred.

Our second investigated route was through commitment escalation. In recent years,

Facebook has attempted to facilitate donations directly through its websites, through a Donate

button, bypassing the like button to get directly to the action. Although this approach can be

seemingly lucrative to charity managers, it completely eliminates the idea of escalation of

charitable intent, and managers have expressed concern about this effort backfiring (McLaughlin

2017). Our findings are in line with the position that managers should maintain their own control

over escalation of commitment.

In addition, we investigated the indirect social-contagion effects of Facebook likes as

Facebook friends pass on information, through their likes or messages. Our results of the field

study show that leaving likes results in information dissemination and social contagion, which in

turn influences WTP. This finding indicates the importance to managers of using Facebook for

promotional messages and to encourage people to pass on these messages.

Having mapped efforts to charitable intent, the manager should next identify the exact

fundraising mechanism through which charitable intent is converted to cash. In this investigation,

we focused on charity auctions. Many other fundraising approaches exist, but auctions are a

prominent one and illustrate here the power of social media.

In recent years, the charitable fundraising literature has found that an individual donor’s

WTP could depend on donations the charity is able to amass from others in a short period of

time. The literature has three sets of related social influences on fundraising: (1) social reference,
 42

(2) challenge grants, and (3) matching grants.

The first influence is a straightforward social reference. In that research stream, Shang and

Croson (2009), in a natural field experiment with phone banks that receive inbound calls from

public radio campaigns, explored the impact of upward social influence. They report that

contributions from recent donors had a big impact on donations. Croson and Shang (2008)

examined the impact of downward social information and found similar results.

The second stream pertains to challenge grants, whereby fundraisers use seed donations by

others to motivate future donors to reach a particular donation threshold. List and Lucking-

Reiley (2002) found that challenge gifts announced by the fundraiser influence charitable

contributions in university capital campaign. Landry et al.’s (2006) data from a door-to-door

fundraising drive suggested challenge gifts increased conditional contributions. Rondeau and

List (2008) used direct-mail solicitations to Sierra Club supports to explore the effect of

matching and seed money on donor behavior. They found that announcement of seed money

increased the participation rate of potential donors by 23% and total dollar contributions by 18%,

compared to an identical campaign that did not announce a challenge gift.

The third stream pertains to matching grants, where a donor, typically an organization,

pledges to match a percentage of donations by others. A large-scale natural field experiment of

Eckel and Grossman (2008) with Minnesota National Public Radio, found that matching grants

result in larger total donations to charities than comparable rebate subsidies. Thus, the

contributions by others, rather than the impact of a donation amount, is what influences giving.

Auctions are an interesting manifestation of this “other donor: effect, because of the known

effect of bidding intensity (also known as frenzy or competitive arousal). We showed that

bidding intensity mediates the Facebook-like effect, which is an important consideration for
 43

managers. Auctions with a strong, established private value, in which bidding intensity is less

likely to play a role, are not likely to benefit to the same extent from a Facebook campaign.

Limitations

We conducted our study in a context of more non-durable items to be sold over a short

period of time. Although our campaign likely increased awareness for the organization for

which the funds were being raised, this increased awareness was not the focus of the

investigation (nor do we have measures for it). Rather, we were focused on the relatively short-

term impact on short-duration auctions for unique items. The short blitz of social media through

Facebook likes is not uncommon in practice (Facebook advertising is known to be effective:

John et al. 2017; Mochon et al. 2017) but has not received as much attention as the better-known

social media campaigns.

Short-term social media is tricky, to put it mildly. It generates traffic, which is critical for

auctions, but it also shapes value expectations, in particular in a charitable setting. These two

effects have to be disentangled. Social media also results in multiple measurable intermediate

outcomes (i.e., prior to auction outcomes), namely, Facebook impressions and likes, and

Facebook likes in turn can be decomposed into own likes (an individual clicking the Facebook

like) and others’ likes (the total number of Facebook likes), with differing effects. This

investigation tried to separate out these different effects.

Self-selection is an important methodological issue in this investigation, because

likes are treated as exogenous variables, and one could argue that more charitable bidders might

leave more likes and also bid more. We controlled for this possibility first and foremost through

the randomized assignment of groups to treatments, and through pooling proceeds so that no one

group would benefit exclusively from the proceeds for that group (i.e., we reduced the incentives
 44

to be charitable due to affinity for that group).

Further, we note that bidders liking an auction because they like a specific artwork (e.g.,

because their child was in that group) does not explain why likes have a positive effect on ending

prices for both artwork and gift items but not for gift certificates.

Lastly, we looked at all past charitable choices of individuals in the auction platform prior to

joining this study and classify their charitable propensity in that manner. We find no evidence

that their charitable propensity affects their bids or likes in any way. As a result, although we do

not dismiss self-selection as an empirical concern, the overall evidence does not point to it being

especially critical to this investigation.

Future Directions

Future research should look into additional ways to control for self-selection in field

experiments in general and in social media research in particular. Future research could delve

deeper into the types of products for which social media can influence consumer WTP. Clearly,

artwork cannot be the only category although it is deeply personal. The research on long-term

social media campaigns (e.g., Mangold and Faulds, 2009) has picked on high-involvement

products (cars and motorcycles, baby products) as ideal.

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