Category: Social Media & WOM

Journal of Interactive Marketing, with Raoul Kubler and Anatoli Colicev, 2020

Full Article

Abstract:
User-generated content provides many opportunities for managers and researchers, but insights are hindered by a lack of consensus on how to extract brand-relevant valence and volume. Marketing studies use different sentiment extraction tools (SETs) based on social media volume, top-down language dictionaries and bottom-up machine learning approaches. This paper compares the explanatory and forecasting power of these methods over several years for daily customer mindset metrics obtained from survey data. For 48 brands in diverse industries, vector autoregressive models show that volume metrics explain the most for brand awareness and purchase intent, while bottom-up SETs excel at explaining brand impression, satisfaction and recommendation. Systematic differences yield contingent advice: the most nuanced version of bottom-up SETs (SVM with Neutral) performs best for the search goods for all consumer mind-set metrics but Purchase Intent for which Volume metrics work best. For experienced goods, Volume outperforms SVM with neutral. As processing time and costs increase when moving from volume to top-down to bottom-up sentiment extraction tools, these conditional findings can help managers decide when more detailed analytics are worth the investment.

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MIT Sloan Management Review, with Brad Fay, Ed Keller and Rick Larkin, Winter 2019

Short Article

Introduction:
Research shows that both online and off-line customer conversations drive
purchase decisions — but they require separate marketing strategies.
Nordstrom, the Seattle-based retailer, had a memorable 2017. In early February, Donald Trump, then the newly elected U.S. president, took to Twitter to berate Nordstrom for dropping the Ivanka Trump clothing line, complaining that the company had treated his daughter “so unfairly … terrible!” The tweet set off a powerful reaction in social media. Our research showed the number of weekly mentions of the Nordstrom brand on Twitter and other sites surged by 1,700%, while the tone of those conversations (as measured using natural language processing, which interprets meaning from adjacent words and context) swung sharply from positive to negative.1 However, in off-line conversations (measured via surveys), the sentiment stayed positive. Amidst these mixed signals, Nordstrom rolled through the 2017 holiday season with a 2.5% sales increase over the prior year.

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with Anatoli Colicev and Ashwin Malshe, Administrative Sciences, 8 (55), 2018.

Full Article

Abstract:
As customer-brand engagement progressively shifts to digital domains, understanding social media effects in branding has become a vital issue. Social media effectiveness is especially important for the US retail sector due to intense competition among retailers for consumer attention and engagement on digital channels. Yet, the research on the effectiveness of social media in the retail industry remains sparse. Thus, the purpose of this paper is to investigate how social media affects US retailers’ customer-based brand equity (CBBE) which is an important indicator of brand success. Using a dataset of 15,717 retailer-day observations, the authors empirically test the dynamics between owned and earned social media and CBBE using panel vector autoregression (PVAR). The authors find strong impacts of owned and earned social media on CBBE across the board. However, they find that owned social media harms CBBE of retailers dealing in hedonic and high involvement products. Whereas owned social media helps general retailers in building CBBE, it reduces CBBE of specialty retailers.

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with Behice Ece Ilhan and Raoul Kubler, Journal of Interactive Marketing, 43 (August), 2018, 33-51.

Full Article

Abstract:
Fans of a brand attack fans of rival brands on social media. Given the nature of such rival brand fan attacks, managers are unsure about how much control they should exercise on brand-negative comments on their owned social media touchpoints, and what brand actions drive these Attack, Defense and Across (ADA) posts. Multimethod analysis identifies ADA’s impact across industries of technology, fast food, toothpaste, beverages, and sports apparel. Sentiment analysis identifies that fans posting in both communities stimulate both brand-negative and brand-positive comments. Despite their relatively low prevalence (1–6% of all posts), ADA posts induce broader social-media brand engagement as they substantially increase and prolong the effects of managerial control variables such as communication campaigns and new product introductions. Brand managers, thus, have specific levers to stimulate the positive consequences of rival brand fan posting on their owned media.

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with A. Colicev, A. A. Malshe, P. O’Connor, Journal of Marketing, 82(1), 2018, 37-56.

Full Article

Abstract:
Although research has examined the social media–shareholder value link, the role of consumer mindset metrics in this relationship remains unexplored. To this end, drawing on the elaboration likelihood model and accessibility/ diagnosticity perspective, the authors hypothesize varying effects of owned and earned social media (OSM and ESM) on brand awareness, purchase intent, and customer satisfaction and link these consumer mindset metrics to shareholder value (abnormal returns and idiosyncratic risk). Analyzing daily data for 45 brands in 21 sectors using vector autoregression models, they find that brand fan following improves all three mindset metrics. ESM engagement volume affects brand awareness and purchase intent but not customer satisfaction, while ESM positive and negative valence have the largest effects on customer satisfaction. OSM increases brand awareness and customer satisfaction but not purchase intent, highlighting a nonlinear effect of OSM. Interestingly, OSM is more likely to increase purchase intent for high involvement utilitarian brands and for brands with higher reputation, implying that running a socially responsible business lends more credibility to OSM. Finally, purchase intent and customer satisfaction positively affect shareholder value.

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with Robert Rooderkerk, Journal of Interactive Marketing, 35 , 2016, 1-15.

Full Article

Abstract:
Social media has moved beyond personal friendships to professional interactions in high-knowledge industries. In particular, online discussion forums are sponsored by firms aiming to position themselves as thought leaders, to gain more insight in their customer base and to generate sales leads. However, while firms can seed discussion by posts, they depend on the forum members to continue the discussion in the form of reactions to these posts. The goal of the current study is to investigate what features and characteristics drive the number of comments that a post receives on an online discussion forum. The empirical setting involves a global manufacturer connecting with health care professionals through a LinkedIn discussion forum. We project that (i) content characteristics, (ii) post characteristics, (iii) author characteristics, and (iv) timing characteristics jointly determine the number of comments a post receives. We show that the readability of the post, the controversiality of the content and the status of the post author have the highest elasticity on the number of comments. These results provide valuable insights for firms on how to build and maintain an attractive online forum through ongoing discussions.

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GfK-Marketing Intelligence Review, Vol. 2 No. 1 / 2010.

Short Article

Abstract:
How large and lasting are the effects of word-of-mouth (WOM) referrals versus paid marketing? What is the $ / € worth of a WOM-referral to an Internet social networking site? This study finds that word-of-mouth referrals have substantially longer carryover effects than traditional marketing actions. The long-run elasticity of WOM on site signups is 0.53; about 20 times higher than that of marketing events, and 30 times that of media appearances. Based on revenue from advertising impressions served to a new member of the site, the monetary value of a WOM referral is about $0.75 per year. By sending out 10 referrals, each network member thus brings in $7.50 to the firm; which represents the maximum reward the firm could consider to incentivize word-of-mouth referrals. Managers can use this approach and findings to benchmark metrics for both WOM and traditional marketing, to test changes in online WOM referral content, and to decide on the appropriate size of financial incentives to stimulate WOM.

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with M. Trusov and R. Bucklin, Journal of Marketing, 73(5), September, 90-102, 2009, Emerald Mgmt Reviews Citation of Excellence 2009, and runner-up for the MSI/H. Paul Root Award for best JM article.

Full Article

Abstract:
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 sent out by existing members, outbound WOM may be precisely tracked. WOM, along with traditional marketing, can then be linked to the number of new members subsequently joining the site (signups). Due to the endogeneity among WOM, new signups, and traditional marketing activity, the authors employ a Vector Autoregression (VAR) modeling approach. Estimates from the VAR model show that word-of-mouth referrals have substantially longer carryover effects than traditional marketing actions. The long-run elasticity of signups with respect to WOM is estimated to be 0.53 (substantially larger than the average advertising elasticities reported in the literature) and the WOM elasticity is about 20 times higher than the elasticity for marketing events, and 30 times that of media appearances. 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 word-of-mouth.

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