lecture 7 Flashcards
organic WoM
consumers become advocates for a product and have a desire to share their views
This is our focus
amplified word of mouth
marketers launch campaigns designed to encourage or accelerate WoM in existing or new communities
Well come back to this later in the course – “firm generated content”
Online versus offline WoM
Destinction is always lurking in the background
People conflate these two, the things you talk about offline are different than the things you talk about online. Online WoM should be its own entity. Offline is impossible too
Social media word of mouth matters
consumers now spend more than 135 minutes per day on social media
Social media sites contain a treasure-trove of decision relevant information
Social media fostered growing importance of WoM marketing
Chief marketing officers think online WoM matters
Rationalized by consumers trust in online info from peers
64% of marketing executives believe word of mouth is the most effective form of marketing
Only 6% say they have mastered it (whatever mastered means)
Why word of mouth might matter:
Three mechanisms at play
1) awareness
2) Buzz
3) Social learning (i dont know about products quality but maybe i can learn it from others
4) consumption complementaries
How to measure awareness, buzz, and social learning
awarenes and buzz is measured in the volume of tweets
Social learning is measured in sentiment in tweets text
Sentiment is often called valence
Awareness vs buzz
Awareness:
introduces new consumer to a product
Reminds consumers about product
Reinforce traditional advertising
Buzz:
Expressions of anticipation
Increase in anticipation –> increase in volume of posts
By consumers who want to act as opinion leaders, and reflect their interests, excitement, and expectations
Generally “neutral” in sentiment
What is sentiment
sentiment expressed tweets text provides means to measure (consumer perceptions of) quality
Sentiment impacts sales via social learning
(dimensions of) quality revealed through interactions with their peers
Relevant if consumers use these reviews to decide what to attend
Remark: important to control for other ways consumers learn about quality
when should social media matter
social media can generate awareness, buzz and information diffusion that ultimately influences demand (but only about certain things, if people keep talking about how good yogurt in general is, that wont make me buy more yogurt)
it is important when:
1) Relying on “hyped release strategies”
2) uncertainty about a products quality
Exaple: Movies, books, consumer electronics, video games and fashion
does consumer word of mouth impact demand?
estimated volume elasticity: between 0.016 and 0.026
WoM influences demand via consumption complementarities
you can chat about it later online
Managerial implications:
fostering post-show discussion
Doesnt appear to be valence/sentiment effects
(maybe because quality is known)
influencer marketing
a type of social media marketing that uses endorsements and product mentions from influencersW
who are influencers:
someone who has:
Power to affect the purchasing decisions of others because of his or her authority, knowledge, position, or relationships with his or her audience
A following in a distinct niche, with whom he or she actively engages
Types of influencers:
how niche they are: products/target audience
how large their reach is: mega, macro, micro, nano
what is the effectiveness of influencer marketing on generating consumer demand (largest effects)
The largest effects of inluencer marketing come from games that are a bit older and have a high standard deviation of consumer ratings
ergo: largest effects: small publishers, high variance in ratings and older games
is sponsored content as effective as organic content
Sponsored streams are 15.7% as effective as organic streams
