Worldwide Mouth

AIB-SE (USA) 2005 Annual Meeting, Charleston, SC WORLDWIDE WORD-OF-MOUTH COMMUNICATION: IMPACT OF A PARADIGM SHIFT Susan H. Godar, William Paterson University In this paper, I utilize a new definition of word-of-mouth (WOM) communication that considers the changes resulting from new Web-based technologies. Next I explain three of the technologies being used to spread word of mouth communication, opinion platforms, discussion forums and blogs. I then discuss some of the ways that international businesses are both monitoring and using those technologies in marketing. Finally, I suggest some research directions that IB scholars may want to undertake in the WOM area. Introduction On September 12, 2004, a bike owner from San Francisco posted a message on bikeforum.net. In it he stated that the supposedly state-of-the-art $50 Kryptonite bike lock could be picked with the top of a $0.29 Bic pen. The story spread – with a boost in the U.S. from the NY Times and the Associated Press – around the world to bike owners. Within a week, 1.8 million people had read the posting, or downloaded or viewed the video of how to pick this lock. On September 22, the Kryptonite division of Ingersoll-Rand offered a free product exchange, at an estimated cost of $10 million. (VanDen Heuvel, 2005) While word-of-mouth communication was originally thought of as being an oral form of interpersonal noncommercial communication among acquaintances or friends (Arndt, 1967), it has evolved into worldwide commercial or non-commercial communication with strangers. This is happening through the use of three technologies that have been characterized as “written oral” communication (Ferris and Wilder, 2005): opinion platforms, discussion forums, and blogs. The discussion forum that brought down the reputation of the Kryptonite lock has thousands of participants from many countries. Forums such as this are increasingly popular with consumers as they seek information and share their experiences about products. Also increasing in popularity are Weblogs, or “blogs,” and opinion platforms as spreaders of information about products and services. These paradigm shifts in word of mouth (WOM) communicationsfrom oral to technological from acquaintances to strangers from spontaneous to supported from local to worldwide have significant impact on marketing on a global basis. They have not, however, been explored in the global marketing literature. WOM has a long research history, covering at least the last 50 years (Godes and Mayzlin, 2004). It has been thought of as a domestic-only research area within consumer behavior. These paradigm shifts, however, open up a potentially fertile area for IB researchers. In the following sections, I will first discuss a new definition of WOM communication that considers the changes resulting from new technologies. Next I will explain two of the technologies being used to spread word of mouth communication, discussion forums and blogs. I will then discuss some of the ways that international businesses are both monitoring and using those technologies in marketing. Finally, I will suggest some research directions that IB scholars may want to undertake in the WOM area as word of mouth, having expanding to include word of mouse, has an increasing effect on the global marketplace. 143 AIB-SE (USA) 2005 Annual Meeting, Charleston, SC Word of Mouth . . . or Mouse In 1967 Ardt defined WOM as oral person-to-person communication from a non-commercial sender about a good or service. During the ensuing four decades, a great deal of research has been performed, supporting the idea that this type of communication is a very important part of a consumer’s decision process. Underlying all of that research were the constraints of contiguous senders and receivers of the messages engaged in spontaneous, ephemeral oral conversations (Stern, 1994). The communication, too, was assumed to be generated by the sender herself and not as the result of some commercial intervention. In general, it involved someone who was either happy or unhappy about a recent purchase or experience and shared the joy or unhappiness with friends and coworkers as a part of daily life. Buttle (1998) contends that, in this electronic age, WOM need not be “face to face, direct, oral or ephemeral” (pg. 243). Older studies of WOM used broader definitions, not restricting the conversations to those in a face-toface situation, but also including things like telephone conversations. With the advent of email, people could communicate person-to-person about products and service experiences. Now, this has expanded to a more public forum via the Web. Consumers are continuing to offer their complaints and praises for good and services, but to a wider audience and in written form. The conversational tone of this communication further supports that is is a new form of “oral” communication (Ferris and Wilder, 2005), shifting WOM from oral to technological. This new type of WOM is popularly called eWOM. Formerly, there were limits on the spread of WOM. Now, it can be communicated across time and space to farflung strangers who may read it at some point in the future. A record exists of the communication for an indefinite period of time and the content can be edited or modified. The sender may be unknown to the receiver or even be truly anonymous, revealing nothing about her identity to the readers of the opinion. This has shifted the paradigm from acquaintances to strangers. Corporations are paying increased attention to eWOM and are attempting to exercise some control over it in the marketing arena. The reach of an individual and the number of people that she may influence has greatly increased and the effort it takes to reach those people has drastically decreased (Subramani and Rajagopalan, 2003). Within the last several years, there have been numerous articles in the popular press about “viral marketing” campaigns in which a company has tried to spread eWOM communication about its products by hiring “regular” people to tell their friends about a product or encourage their friends to visit a corporate website, often via email communication. This has shifted WOM from spontaneous to supported. Researchers are starting to take interest in this area. Expansion into this area via the traditional lenses of WOM research, including types of information exchanged, trust-building, etc., has begun. This field, though, has more potential than that. There are opportunities for research that could not previously be undertaken with WOM, particularly in the international marketing area. While traditional WOM took place among a small group of people, usually those known to the parties involved, eWOM takes place on a global platform. This shift, then, is from local to worldwide. Technologies There are numerous technologies that can be used to spread eWOM. I will focus on three: Web-based opinion platforms, discussion forums, and blogs. Table 1. Opinion Platforms, Discussion Forums, and. Blogs Opinion Platforms Usually corporate Random participants Giving opinions Discussion Forums Corporate or Private Community members Seeking help Blogs Corporate or Private Solo w/ responders Info/Opinion dissemination Sponsorship Posters/participants Purpose 144 AIB-SE (USA) 2005 Annual Meeting, Charleston, SC In a recent article, Hennig-Thurau, Gwinner, Walsh, and Gremler (2004) explored participation in opinion platforms such as epinions.com, consumerreview.com, and rateitall.com. Of course, another opinion platform may more familiar to educators: ratemyprofessor.com. These and other Web-based opinion sites allow poster to make comments about a variety of items, ranging from vacation sites to electronic toys. While the site itself may have commercial sponsors, the posters are presumed to be independent – though there is no way to monitor that. Posters may identify themselves, use a consistent pseudonym, or be anonymous. As a result, the postings may be from random people, without any tie to the site. The topics of posting are established by the organizers of the site. Discussion forums are web-based applications that allow the posting of comments and responses, often involving members of a virtual community. They differ from e-lists in that that e-lists deliver messages automatically while discussion forums require that a person visit the forum’s website. These virtual communities are most frequently either transaction-oriented, i.e. delivering information related to the buying or selling of products, or communities of interest, i.e. established for the purpose of discussing a common interest (Rowley, 2004). Because of these objectives, people usually participate in a discussion forum to seek help. They may, for example, participate in a runners’ discussion group to get information about interesting places to run in a new city or about the latest running shoe technology. A poster can start a new discussion thread or respond to an existing item. It is estimated that the largest forum in Japan, 2ch, has over 2 million posts per day, posting on topics ranging from politics to rice preferences (Wikipedia, 2005). A Blog, or weblog, is a web-based publication of articles or notes, usually in reverse chronological order (Wikipedia, 2005). Using a number of easily obtainable software packages or Web sites such as blogspot.com, a writer can establish a blog. Most frequently, it is the work of a single author and are written diaries of experiences and ideas. The creation of blogs by both individuals and businesses is growing very rapidly, both domestically and internationally, with the globeofblogs.com reporting 31.607 on Oct. 3, 2005. [See http://www.corporateblogging.info/europe/ for a list of European companies who have company blogs.] While there has been some limited amount of research on opinion platformss and discussion forums, almost no research has been done on blogs. Corporate Responses Unlike traditional WOM, the new form of eWOM is thought by corporations to be more “controllable.” A wide variety of companies are using the technologies of opinion platforms, discussion forums, and blogs to “spin” the messages about their products. The company itself may establish discussion forums. For example, Mattel sponsors forums for collectors of Barbie and Hot Wheels so that enthusiasts worldwide can share ideas or seek help for a problem. A company may also pay people to posts favorable items on non-sponsored forums. While the WOM Marketing Association’s code of ethics mandates that this paid sponsorship must be disclosed in the postings, it often is not (Abelson, 2005). A company must monitor both favorable and unfavorable postings in opinion sites, forums, and blogs. At the extremes are two types of posters: evangelists and vigilantes (Subramani and Rajagopalan, 2003). Evangelists are those who are strong advocates for a company’s product or services. As they have had a very good experience with the item purchased, they say predominately favorable things to encourage others to buy or to support an idea. Vigilantes, on the other hand, have had such an unhappy purchase experience that they want to go beyond saying unfavorable things about the company to hurting the company. A number of companies offer programs that will allow a company to track postings and monitor their content, e.g. Intelliseek’s BlogPulse. Companies must be ever alert to postings as they can often grow into corporate crisis situations, as did the one in the story that opened this paper. Thus, companies have two choices: attempting to control the message or responding to it after publication. The Future for IB Researchers This paper is a call to action and, as such, highlights some of the areas in which research can be done internationally. One of the great advantages to these technologies is that the information is publicly available and not ephemeral. Analysis of the written records left by discussants and by bloggers may open a wide range of interesting topics. A sample of this, using the technology of newsgroups, is found in the research of Godes and 145 AIB-SE (USA) 2005 Annual Meeting, Charleston, SC Mayzlin (2004) where they measure the impact of online conversations on new television shows. The same type of research, I contend, may be done on these other technological tools and with an international focus. Based on research to date, we may be able to tap into younger markets that previous researchers could. Spero and Stone (2004) aver that the youth market in Europe are the “digerati,” participating in computer-mediated communication about products and that this 12-16 year old demographic has increasing purchasing power. By investigating how they engage in eWOM and whether that engagement is different from that of older consumers, marketers may be better able to target those consumers. We may also be able to determine the scope of their sphere of influence on others, i.e. will they trust other teenagers in different countries and respond to their comments about common products. By tracking information flows within countries and around the world, we can have a new lens through which to view the spread of ideas internationally and see if there are differences in the efficacies of marketing campaigns. With sites such as globeofblogs.com offering links to blogs originating in countries from Andorra to Zimbabwe, we can access multinational consumer insight into many of the typical areas of WOM research. These include impact of positive or negative comments on purchase intent, antecedents of making comments, creation of trust in conversations, switching behavior, and loyalty. From a corporate strategy point of view, there will be opportunities to explore differences across borders on such issues as the impact of viral marketing to drive people to these sites or on the willingness of people from various cultures to be either vigilantes or evangelists. Research could also explore the impact of obvious corporate sponsorship to various populations. From the experiences of companies like Kryponite can also come research on the best ways to handle fast-spreading global product crises. The shift to eWOM – a shift technological, stranger-initiated, supported, and worldwide word of mouth communication paradigm – offers great new opportunities for researchers in the field of International Business. For the first time, we have very low cost access transcriptions of real conversations about products and services, expanding the ways we can look at the world. 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VanDen Heuvel, Dana, 2005. “What is blogging and why does it matter in marketing and advertising?”, [www document] http://www.blogsavant.com/aafrv/ADFED_Blog_Presentation.ppt (accessed July 13, 2005). Wikipedia, 2005. [online encyclopedia]. Entries accessed on July 13, 2005. Web Sites for More Information or Mentioned in Paper http://www.blogpulse.com http://blogspot.com http://www.consumerreview.com http://customerevangelists.com/ http://globeofblogs.com http://www.epinion.com http://www.rateitall.com http://www.ratemyprofessor.com http://www.womma.org http://www.wom-study.blogspot.com/ Author Bio Sue Godar (Ph.D., Temple University, International Business) is a professor and department chairperson in the Dept of Marketing and Management. Her current research focuses on the areas of business ethics, and the use of technology in business and in teaching. (see http://www.virtualteams.us for information about her books in the last area.) 147