Examining the Influence of Product Innovation on Social Media Platforms: Evidence from Instagram

Abstract

Grounding our discussion in social penetration and resource allocation theories, we propose and test the influence of introducing a new product, namely Instagram Story, on the usage and content creation behavior on the Instagram platform. Employing a quasi-experimental setting, we investigate the influence of introducing this new product on user engagement and content generation. Our findings identify the significant influence of Instagram Story on the user engagement with the original product i.e. Instagram Post and the overall resource expenditure by content providers. Through our study we delineate several important implications for both research and practice. Specifically, our study provides significant insights for platform owners and content providers to better design and implement new products on social media platforms.