A new study out of the University of Utah’s David Eccles School of Business found that when it comes to driving sales, what consumers say online is more important than the number of comments. The study also found that traditional advertising is a stronger driver of sales earlier in a product’s life cycle, but online commentary becomes a more critical driver as the product matures in the market.
This study — the first of its kind — analyzed five major cell phone brands and the role that traditional advertising and online word of mouth (OWOM) had on sales and the overall affinity toward each brand. The study also examined two years’ worth of data, giving a much more in-depth analysis of consumer attitudes than any previous study.
“Prior to this study, there has been very little research around how content of online word of mouth affects product sales,” said Shyam Gopinath, the lead author of the study and a marketing professor at the David Eccles School of Business. “These findings give businesses the guidance they need to know where and how to allocate funds for advertising in both traditional and new media.”
Using a dynamic modeling framework, Gopinath and his colleagues analyzed both traditional advertising and OWOM content by category. For OWOM, the study examined whether or not the content focused on the attributes of, emotions toward and recommendations for the phone. For traditional advertising, the content broke down into attribute-focused and emotion-related content.
The researchers then investigated the relative importance of advertising and OWOM toward sales, specifically how paid ads influenced buyer behavior at different stages of a product life cycle, and the role traditional advertising played in generating OWOM content.