Advertising and Word-of-Mouth Effects on Pre-launch Consumer Interest and Initial Sales of Experience Products. Issue 1 (February 2017)

• Record Type: Journal Article
• Authors: Kim, Ho; Hanssens, Dominique M.
• Is Part Of: Journal of interactive marketing. Volume 37:Issue 1(2017)
• Page Start: 57
• Page End: 74
• Publication Date: 2017-02
• Subjects: Pre-launch marketing -- Pre-launch consumer interest -- Advertising -- Blogging -- Online search -- New experience products -- Persistence modeling -- Long-term effects; Direct marketing -- Periodicals; Internet marketing -- Periodicals; 658.87
• DOI: 10.1016/j.intmar.2016.08.001
• Languages: English
• ISSNs: 1094-9968

Abstract

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.