Journal Selections from MSI
How Online Reviews Can Benefit Brands
Positive online reviews benefit weak brands, leading to greater sales and even more positive reviews, strengthening the brand in the process.
The brand impact of online customer reviewers depends largely on brand strength, according to a study reported in the Journal of Marketing. In an analysis of both the emerging Blu-ray and mature DVD player categories, Nga Ho-Dac, Stephen Carson, and William Moore find that for strong brands, online customer reviews—whether positive or negative—have no significant impact on sales.
Online customers reviews matter less for strong brands, but they can play an important role in increasing sales of, and strengthening, weak brands.
For weak brands however, positive online reviews can help increase market penetration. Higher sales lead to more positive reviews, creating a positive feedback loop that continues to boost sales and to strengthen overall brand equity in the process.
These findings suggest that while strong brands are well-served by traditional marketing communication, marketers might consider “flipping the funnel” for weaker brands by moving marketing dollars from mass media advertising toward word of mouth, via early adopter clubs, samples, and incentives to review.
Download article from American Marketing Association (free until March 23, 2014)
The Effects of Positive and Negative Online Customer Reviews: Do Brand Strength and Category Maturity Matter? by Nga N. Ho-Dac, Stephen J. Carson, and William L. Moore, Journal of Marketing (November 2013)
Does Online Chatter Really Matter? Dynamics of User-generated Content and Stock Performance
Seshadri Tirunillai and Gerard J. Tellis (2011) [Report]
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