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

Ho Kim and Dominique M. Hanssens

Journal of Interactive Marketing, 2017, vol. 37, issue C, 57-74

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.

Keywords: Pre-launch marketing; Pre-launch consumer interest; Advertising; Blogging; Online search; New experience products; Persistence modeling; Long-term effects (search for similar items in EconPapers)
Date: 2017
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