The Economic Value of Online User Reviews with Ad Spending on Movie Box-Office Sales

Young-Jin Lee (), Kellie B. Keeling () and Andrew Urbaczewski ()
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Young-Jin Lee: University of Denver
Kellie B. Keeling: University of Denver
Andrew Urbaczewski: University of Denver

Information Systems Frontiers, 2019, vol. 21, issue 4, No 7, 829-844

Abstract: Abstract Our objective in this paper is to assess the values of online user reviews for movies compared with the sales impact of post-release ad spending for movies. We use weekly box-office sales and ad spending data for 304 movies released in the U.S. along with online ratings and user characteristics from a social network site for movies. By exploiting the fixed-effects two-stage instrumental variable approach to account for movie heterogeneity and simultaneous relationships among user reviews, ad spending and sales, we found that improving the volume and valence of ratings can have the equivalent effect that ad spending can provide.

Keywords: Online user reviews; Online social media; Advertising; Fixed-effects two-stage regression; Instrumental variables; Internet marketing (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10796-017-9778-7

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