The authors study the effect of word-of-mouth (WOM) marketing on member growth at an Internet social networking site and compare it with traditional marketing vehicles. Because social network sites record the electronic invitations from existing members, outbound WOM can be precisely tracked. Along with traditional marketing, WOM can then be linked to the number of new members subsequently joining the site (sign-ups). Because of the endogeneity among WOM, new sign-ups, and traditional marketing activity, the authors employ a vector autoregressive (VAR) modeling approach. Estimates from the VAR model show that WOM referrals have substantially longer carryover effects than traditional marketing actions and produce substantially higher response elasticities. Based on revenue from advertising impressions served to a new member, the monetary value of a WOM referral can be calculated; this yields an upper-bound estimate for the financial incentives the firm might offer to stimulate WOM.

https://eresearch.ozyegin.edu.tr/xmlui/bitstream/handle/10679/56/Effects_of_Word-of-Mouth_Versus_Traditional_Marketing_Findings_from_an_Internet_Social_Networking_Site.pdf;sequence=5

Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site

In this paper we report research results investigating microblogging as a form of electronic word-of-mouth for sharing consumer opinions concerning brands. We analyzed more than 150,000 microblog postings containing branding comments, sentiments, and opinions. We investigated the overall structure of these microblog postings, the types of expressions, and the movement in positive or negative sentiment. We compared automated methods of classifying sentiment in these microblogs with manual coding. Using a case study approach, we analyzed the range, frequency, timing, and content of tweets in a corporate account. Our research findings show that 19p of microblogs contain mention of a brand. Of the branding microblogs, nearly 20p contained some expression of brand sentiments. Of these, more than 50p were positive and 33p were critical of the company or product. Our comparison of automated and manual coding showed no significant differences between the two approaches. In analyzing microblogs for structure and composition, the linguistic structure of tweets approximate the linguistic patterns of natural language expressions. We find that microblogging is an online tool for customer word of mouth communications and discuss the implications for corporations using microblogging as part of their overall marketing strategy. © 2009 Wiley Periodicals, Inc.

/pdf/twitter-power-tweets-as-electronic-word-of-mouth-3yfo7qbk2k.pdf

Twitter power: Tweets as electronic word of mouth

As more and more marketers incorporate social media as an integral part of the promotional mix, rigorous investigation of the determinants that impact consumers’ engagement in eWOM via social networks is becoming critical. Given the social and communal characteristics of social networking sites (SNSs) such as Facebook, MySpace and Friendster, this study examines how social relationship factors relate to eWOM transmitted via online social websites. Specifically, a conceptual model that identifies tie strength, homophily, trust, normative and informational interpersonal influence as an important antecedent to eWOM behaviour in SNSs was developed and tested. The results confirm that tie strength, trust, normative and informational influence are positively associated with users’ overall eWOM behaviour, whereas a negative relationship was found with regard to homophily. This study suggests that product-focused eWOM in SNSs is a unique phenomenon with important social implications. The implications for research...

Determinants of consumer engagement in electronic word-of-mouth in social networking sites

What We Know and Don't Know About Online Word-of-Mouth: A Review and Synthesis of the Literature

Effects of various characteristics of social commerce (s-commerce) on consumers’ trust and trust performance

Although viral marketing has garnered a great deal of attention in the trade press, almost nothing is known about the motivations, attitudes, and behaviors of the people (those sending the email to others) that constitute the essential component of any such strategy. This article reports the results of three studies that examine consumer responses and motivations to pass along email. Implications for target selection and message creation are discussed for advertising practitioners interested in implementing viral efforts, and suggestions for future research relating to computer-mediated consumer-to-consumer interactions are presented for academic researchers.These studies were sponsored by Planetfeedback.com (www.planetfeedback.com), an internet-based infomediary company based in Cincinnati.An earlier version of this work will appear as a chapter in the forthcoming book, Online Consumer Psychology, C. Haugvedt, K. Macleit, and R. Yalch (eds.).

Lynne Mobilio

Papers

Viral Marketing or Electronic Word-of-Mouth Advertising: Examining Consumer Responses and Motivations to Pass Along Email