Online word-of-mouth communications are having a significant effect on product sales, yet research to date has failed to understand why that effect fluctuates, according to a new study in the Journal of Marketing.
"Previous investigation into online communications had focused on product reviews, but it was clear that far more information was needed," write authors Ya You (College of Charleston), Gautham G. Vadakkepatt (George Mason University), and Amit M. Joshi (University of Central Florida). "The current study hypothesized that additional platforms such as blogs, forums, and social networking sites would give a richer picture of the many factors determining how electronic word-of-mouth affects sales."
The authors conducted a comprehensive search through marketing journals, working papers, and dissertations to glean information on how electronic word-of-mouth was performing across products and communication platforms. The results revealed that the impact of online word-of-mouth varied according to specific factors such as the type of product, type of industry, and type of online forum in which the product was being discussed. Online discussion improved the sale of durable products more so than nondurable products, for example. For new products where the technology was rapidly evolving, consumers were highly likely to rely on externally retrieved information, and because word-of-mouth was considered more credible than advertising, electronic word-of-mouth had a considerable impact on sales in fast-growth industries.
Consumers favored specialized review sites, and communications there were more influential than communication on general sites. In addition, word-of-mouth information from independent review sites was more powerful than that from retailer sites. Finally, forums that encouraged participants to use their real name and develop relationships impressed customers more so than anonymous forums.
"The findings have clear implications for durable or high-growth product sales, which may benefit greatly from electronic word-of-mouth communications. Importantly, the medium is indeed the message. The type of platform carrying the information has a large impact on its effectiveness," the authors conclude.
Ya You, Gautham G. Vadakkepatt, and Amit M. Joshi. "A Meta-Analysis of Electronic Word-of-Mouth Elasticity." Forthcoming in the Journal of Marketing. For more information, contact Ya You or Mary-Ann Twist.