Author
Trusov, M., Bucklin, R. E., Pauwels, Koen Hendrik
Publication Date
2009-09
Publication Place
-
American Marketing Association
Subject
Word-of-mouth marketing, Internet, Social networks, Vector autoregression
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
0022-2429
Record ID
89e2ce82-5d17-4d97-8e0e-142ff80d1ada
Library Location
Business Administration
Date
2009-09
Sample Text
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 autoregression (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 elasticises. 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.
DOI
10.1509/jmkg.73.5.90
Cilt
73
