A Study on the Effectiveness of the Traditional Word of Mouth Marketing Among the Youth

A Study on the Effectiveness of the Traditional Word of Mouth Marketing Among the Youth
Author(s):
Dr.P.Ramachandran, Ms.S.Chitralekha, Ms. A. Preethi Theresa
Keywords:
Word-of-Mouth, Advertisement, Traditional Marketing and Internet
Abstract
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 auto regressive (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 elasticity’s. 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.
Article Details
Unique Paper ID: 164641 Publication Volume & Issue: Volume 10, Issue 12 Page(s): 2323 - 2327
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