Advertising and Word-of-Mouth Effects on Pre-launch Consumer Interest and Initial Sales of Experience Products

This study examines how consumers' interest in a new experience product develops as a result of advertising and word-of-mouth activities during the pre-launch period. The empirical settings are the U.S. motion picture and video game industries. The focal variables include weekly ad spend, blog volume, online search volume during pre-launch periods, opening-week sales, and product characteristics. We treat pre-launch search volume of keywords as a measure of pre-launch consumer interest in the related product. To identify probable persistent effects among the pre-launch time-series variables, we apply a vector autoregressive modeling approach. We find that blog postings have permanent, trend-setting effects on pre-launch consumer interest in a new product, while advertising has only temporary effects. In the U.S. motion picture industry, the four-week cumulative elasticity of pre-launch consumer interest is 0.187 to advertising and 0.635 to blog postings. In the U.S. video game industry, the elasticities are 0.093 and 1.306, respectively. We also find long-run co-evolution between blog and search volume, which suggests that consumers' interest in the upcoming product cannot grow without bounds for a given level of blog volume

To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office

Film distributors occasionally withhold movies from critics before their release. Cold openings provide a natural field setting to test models of limited strategic thinking. In a set of 856 widely released movies, cold opening produces a significant 15% increase in domestic box office revenue (though not in foreign markets and DVD sales), consistent with the hypothesis that some moviegoers do not infer low quality from cold opening. Structural parameter estimates indicate 1–2 steps of strategic thinking by moviegoers (comparable to experimental estimates). However, movie studios appear to think moviegoers are sophisticated since only 7% of movies are opened cold

Do I Follow My Friends or the Crowd? Information Cascades in Online Movie Ratings

Online product ratings are widely available on the Internet and are known to influence prospective buyers. An emerging literature has started to look at how ratings are generated and, in particular, how they are influenced by prior ratings. We study the social influence of prior ratings and, in particular, investigate any differential impact of prior ratings by strangers (“crowd”) versus friends. We find evidence of both herding and differentiation behavior in crowd ratings wherein users’ ratings are influenced positively or negatively by prior ratings depending on movie popularity. In contrast, friends’ ratings always induce herding. Further, the presence of social networking reduces the likelihood of herding on prior ratings by the crowd. Finally, we find that an increase in the number of friends who can potentially observe a user’s rating (“audience size”) has a positive impact on ratings. These findings raise questions about the reliability of ratings as unbiased indicators of quality and advocate the need for techniques to debias rating systems

Does Twitter matter? The impact of microblogging word of mouth on consumers’ adoption of new movies

This research provides an empirical test of the “Twitter effect,” which postulates that microblogging word of mouth (MWOM) shared through Twitter and similar services affects early product adoption behaviors by immediately disseminating consumers’ post-purchase quality evaluations. This is a potentially crucial factor for the success of experiential media products and other products whose distribution strategy relies on a hyped release. Studying the four million MWOM messages sent via Twitter concerning 105 movies on their respective opening weekends, the authors find support for the Twitter effect and report evidence of a negativity bias. In a follow-up incident study of 600 Twitter users who decided not to see a movie based on negative MWOM, the authors shed additional light on the Twitter effect by investigating how consumers use MWOM information in their decision-making processes and describing MWOM’s defining characteristics. They use these insights to position MWOM in the word-of-mouth landscape, to identify future word-of-mouth research opportunities based on this conceptual positioning, and to develop managerial implications

Essays on the demand for information goods

siirretty Doriast

Essays on the interaction between users and information systems

The role of information systems has evolved from providing decision support into enabling the majority of our daily operations, and the way users interact with information systems has changed dramatically as a result. The goal of this dissertation is to study phenomena that stem from the close interaction between users and information systems using empirical methodologies. The first essay of this dissertation focuses on the issue of sentiment manipulation. We show that strategic players might be incentivized to manufacture content on social media platforms and opinion forums, in the context of the movie industry. We then identify unusual patterns on Twitter that are consistent with sentiment manipulation. We study the effectiveness of social media advertising in the second essay. Advertisers on popular social media platforms such as Facebook are able to publish ads with popularity and social information. We design and conduct a randomized field experiment to study the extent to which these types of information have an effect on ad performance. In the third essay we study how individuals might be biased toward contents that appear to be written more politely. We use data from an online question answering platform, StackExchange, to show that an individual who posts a question on the platform tends to prefer polite answers to clear answers.Information, Risk, and Operations Management (IROM

Uneasy Lies the Head that Wears the Crown: Why Content\u27s Kingdom is Slipping Away

This Article examines the ongoing power struggle between the content industries (with a particular focus on Hollywood) and the technology industry. These two sectors are intertwined like never before, yet their fates seem wildly divergent, with content stumbling while distribution technology thrives. The Article begins by illustrating that, even before the recession took hold, traditional paid content was in trouble, and that this was and is true across a range of distribution platforms and content types, including theatrical motion pictures, home video, network television, music, newspapers, books, and magazines. The Article next posits six reasons for content\u27s discontent: supply and demand, the decline of tangible media, reduced transaction costs for intangible media, the rise of free content, market forces in the technology industry, and the culture of piracy. The result of these factors has been a migration of audiences from paid professional content to free content, whether user-generated, ad-supported, or pirated. The Article then briefly contrasts the technology industry\u27s economic success (albeit tempered by the recession) and history of innovation. It next examines Hollywood\u27s responses to technological challenge--responses that have included litigation, legislation, and various business responses. The Article notes that none of these responses have been successful so far, and concludes by examining the dilemma that paid content creators and companies now face

Reviewing the Critics: Examining Popular Video Game Reviews Through a Comparative Content Analysis

The purpose of this study is to evaluate the current critical climate in popular online video game reviews (i.e., video game criticism written for a general audience). So far, most of the research published in this area focuses on how the reviews reflect the games themselves, rather than strictly examining the content of the reviews in this growing body of literature. This study uses computer-aided text analysis (CATA) supplemented with human coding to identify typological differences between film and video game reviews, as well as differences in theory usage and critical thought and style. Video game reviews are more concerned with the price of the work being reviewed, supporting the notion for a utility theory of video games. Game reviewers also tend to find redeeming qualities even in very flawed games, suggesting they are either overly passionate and/or concerned about keeping advertisers happy. Although not at the exceedingly high levels as previous studies, the author finds support for using usability heuristics (e.g., responsiveness of controls, use of in-game tutorials) to review games. Neither body of popular criticism examined delves deeply into theoretical frameworks for auteur or feminist theories, but discussion is provided as to how the reviewers could address these issues should they choose to do s

Reviewing the Critics: Examining Popular Video Game Reviews Through a Comparative Content Analysis

The purpose of this study is to evaluate the current critical climate in popular online video game reviews (i.e., video game criticism written for a general audience). So far, most of the research published in this area focuses on how the reviews reflect the games themselves, rather than strictly examining the content of the reviews in this growing body of literature. This study uses computer-aided text analysis (CATA) supplemented with human coding to identify typological differences between film and video game reviews, as well as differences in theory usage and critical thought and style. Video game reviews are more concerned with the price of the work being reviewed, supporting the notion for a utility theory of video games. Game reviewers also tend to find redeeming qualities even in very flawed games, suggesting they are either overly passionate and/or concerned about keeping advertisers happy. Although not at the exceedingly high levels as previous studies, the author finds support for using usability heuristics (e.g., responsiveness of controls, use of in-game tutorials) to review games. Neither body of popular criticism examined delves deeply into theoretical frameworks for auteur or feminist theories, but discussion is provided as to how the reviewers could address these issues should they choose to do s