Preaching to the Choir: The Chasm Between Top-Ranked Reviewers, Mainstream Customers, and Product Sales

Elham Yazdani (), Shyam Gopinath () and Steve Carson ()
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Elham Yazdani: David Eccles School of Business, University of Utah, Salt Lake City, Utah 84112
Shyam Gopinath: Kelley School of Business, Indiana University, Bloomington, Indiana 47405
Steve Carson: David Eccles School of Business, University of Utah, Salt Lake City, Utah 84112

Marketing Science, 2018, vol. 37, issue 5, 838-851

Abstract: The main objective in this paper is to study the effect of reviews by top- and bottom-ranked reviewers on product sales. We use designated market area sales data for 182 new music albums released over an approximately three-month period along with user review data from Amazon.com. Our estimation accounts for confounding factors in the effects of online word-of-mouth measures via the use of instrumental variables. There are several key insights. Overall, we find that bottom-ranked reviewers have a greater effect on sales than top-ranked reviewers. Top-ranked reviewers can be opinion leaders, but their influence is largely limited to special cases like very new products or products with high variance in existing reviews. Additional analysis reveals that the differences in the influence of top- and bottom-ranked reviewers is driven by both what they write (content) and who they are (identity). The results are robust across multiple product categories (music and cameras) and multiple dependent variables (sales and sales rank).

Keywords: social media; online word-of-mouth; reviews; music; cameras; endogeneity; instrumental variables (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:37:y:2018:i:5:p:838-851

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