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«WORD-OF-MOUTH MARKETING ON SOCIAL NETWORK WEBSITES Wesley Shu Department of Information Management School of Management National Central University ...»

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Service Science, Vol. 2, No. 2, October 2011 | 1

WORD-OF-MOUTH MARKETING ON SOCIAL NETWORK WEBSITES

Wesley Shu

Department of Information Management

School of Management

National Central University

Republic of China

shu@mgt.ncu.edu.tw

Kamal Haddad

Department of Finance

College of Business Administration

San Diego State University

U.S.A.

khaddad@mail.sdsu.edu

1. Introduction

Social network websites (SNS, or social network services) have attracted a lot of users. According to Nielsen Online [Nielsen 2009], the usage of SNS and blogs has outgrown emails in December 2008. Recent news showed that Facebook, the largest SNS, has become the largest website by number of visits [Pepitone 2011].

With huge user base, word-of-month (WOM) marketing may have potential advantage. Electronic WOM marketing is using the Internet as the platform for a satisfied customer to promote in one-to-one and one-to-many formats. With the development of the Internet, electronic WOM marketing has become a new way for consumers to know and search new products [Gelb and Sundaram 2002]. Due to anonymity, credibility of WOM marketing can hinder its acceptance, but SNS may solve this problem. Different from traditional friend-making websites, SNS build social networks from a person’s existing one. Thus, all friends on one’s SNS can be said her friends or friends’ friends. SNS incorporate multimedia and can have large influence. [Christiansen and Tax 2000] Our study is based on “WOM process model” within a service purchase decision context by adding perceived usefulness, perceived ease of use from Technology Acceptance Model and system quality and information quality as research dimensions [Davis 1989; Bansal and Voyer 2000; Mckinney and Yoon 2002]. We try to explore WOM

impact in these areas:

• The impact of communicators’ professionalism

• The impact of communicators’ reliability

• The impact of receivers’ professionalism

• The impact of the interaction between communicators and receivers

• The impact of the similarity between communicators and receivers

• The perceived usefulness by users when using SNS for WOM

• The perceived ease of use by users when using SNS for WOM

• The information quality including information understandability, information reliability, and information usefulness for WOM messages on SNS

• The system quality including system access, system usability, and system navigation for SNS for WOM

2. Social Network Services and Word-of-Mouth Marketing Researchers believe that WOM, which come from personal sources, can have greater influence on purchasing behavior than seller-initiated network marketing or consumers’ self-search [Freiden and Goldsmit 1989; Gilly et al.

1998]. SNS make such effect even larger.

SNS can be defined as a web-based service which allows a user to create an open or semi-open profile, delineate the interconnection with other people, and search and view other users’ profiles [Boyd and Ellison 2007]. The power of SNS is not making friends on the entire Internet. Instead, it’s re-establishing friendships, knowing hidden sides of existing friends, gathering people with similar interests, and bringing in friends’ friends into one’s own social network. In this sense, SNS is different from online community. The nexus of online communities is the topics but 2 Wesley Shu and Kamal Haddad   SNS are webs of people and everyone is the center of his own web. Some call SNS 6SNS for their difference from tradition friends-making websites such as MySpace, LinkedIn, or Friendster because they lack one or all of the above features. The SNS discussed here are based on Six Degree of Separation [Milgram 1967]. Simply speaking, it means that any two people know each other indirectly by 6 hops according to Milgram.

Word-of-mouth is information interaction between communicators and receivers [Arndt 1967]. It was proved that WOM can impact consumers’ purchasing behavior. Some even believed that commercials improve visibility but WOM affects decisions. It is because commercials can reinforce consumers’ attitudes but WOM can convince them change their attitudes; WOM is empowered by consumers themselves, not by sellers which have conflict of interest;

WOM messages are straightforward and have less information loading [Arndt 1967; Richins 1983; Herr et al. 1991;

Bone 1995; Duhan et al. 1997].

We can summarize the Internet and SNS features which can foster WOM as follows:

1. The Internet is ubiquitous so WOM messages can travel all over the world and fast.

2. The Internet contains different platforms so WOM can exist with different forms and serve different audiences. SNS go further by forming different groups and thus creating different market segments. This can allow WOM circulate in the appropriate segments.

So communicators know the WOM are seen by interested people, which encourage them to dissimilate WOM.

3. The communicators and receivers on the Internet do not have to meet face-to-face simultaneously, and the interactivities are non-linear (can be one to many or many to many) so the travel of WOM is exponential.





4. The communicators and receivers can easily find the other parties by searching the Internet.

5. True opinions can be solicited since commenting on the Internet can be anonymous.

6. The key of WOM is the familiarity between the communicators and the receivers, and SNS extend this effect due to ‘weak tie.’ Traditionally WOM occur among people who know one another well (strong ties). SNS brings weak ties into a person’s personal network by adding friends’ friends, or by connecting friends which are not seen often.

7. Consumers usually take human interaction as an important source of information [Katona and Mueller 1954;

Katz and Lazarsfeld 1955; Robertson 1971; Thorelli 1971; Price and Feick 1984]. SNS provide human interaction on the Internet and thus can foster WOM.

3. Research Model The importance of SNS in WOM marketing is to integrate the reliability from strong ties and the generalizability from weak ties. People tend to trust their friends in the strong ties but strong ties are narrow and difficult to expand. On the other hand, weak ties may extend information circulation but due to the fact that people in weak ties are remotely connected, trust may be a concern. Thus, how to make people trust WOM in extended space is a crucial question and SNS provide the answer. SNS connected friends in strong ties, and then extend the ties to weak ties. In addition, all comments and activities on SNS are named. Thus, people on SNS can get acquainted with those who are in weak ties through their friends in strong ties and then the trust expansion problems are not dilemma anymore. The ‘tying mechanism’ can also solve authentication problem. Ellison found that people with more friends on SNS tend to offer more reliable personal profiles [Ellison et al. 2007].

Thus, we believe SNS can facilitate WOM marketing. The effect of SNS on WOM marketing can be divided into two generic categories: impact and broadcast.

3.1. Impact of SNS on WOM Marketing Impact can come from three sources: senders’ attributes, receivers’ attributes, and the relationship between senders and receivers. We assume that if SNS can improve these dimensions, they can improve WOM marketing.

1. Senders’ expertise. It is the perceived professionalism by the receivers [Bristor 1989]. Studies have discovered that higher WOM impact comes with higher professionalism [Arndt 1967; Bansal and Voyer 2000; Gilly et al. 1998; Kiel and Layton 1981; Reingen and Kernan 1986; Silk 1966]

2. Senders’ credibility. The higher is the credibility, the higher WOM impact is [Hass 1981].

3. Receivers’ expertise. It is the knowledge, experience, and technology the receivers hold in an area. It can affect receivers’ attitude toward searching product information [Bansal and Voyer 2000]. However, there is no consensus if the impact is positive or negative [Brucks 1985; Furse et al. 1984; Johnson and Russo 1984;

Punj and Staelin 1983].

4. The strength of the social network between the receiver and the sender. A social network can be defined as

special connections among social actors [Fischer 1977]. It contains three major elements:

a. Actors: individuals in the social network. They may belong to multiple networks.

Word-of-Mouth Marketing on Social Network Websites | 3 b. Relationships: the association among actors based on the ‘content’ they have in common, whether going to a ‘direction’ or not, and can be measured by its ‘strength.’ c. Ties: the portfolio of relationships among actors [Carton and Wellman 1999].

5. Similarity between senders and receivers. Communications can occur and persuasion can be strengthened when the senders and receivers share similarity including age, gender, education, social status and so on [Bickart and Schindler 2001; Bither and Wright 1977; Feldman and Spencer 1965; Hass 1981; Moschis 1976;

Rogers 1983].

3.2. Broadcast Effect of SNS on WOM Marketing

Broadcast effect is determined by the usage and quality of the SNS platform where WOM is conducted:

1. Perceived usefulness and perceived ease of use. These dimensions are from Technology Acceptance Model (TAM) [Davis 1989]. They are considered as factors influencing intention to use which in turn influencing the behavior.

2. Information quality and system quality. Quality can improve end user satisfaction [Doll 1988]. It contains two distinct concepts – information quality and system quality [Delone and Mclean 1992]. Information quality is the quality of the content circulating in the network. It can be measured as information understandability, information reliability, and information usefulness [Mckinney and Yoon 2002]. System quality is the quality of the facility users employ. It also impacts on user satisfaction [Rai, Lang, and Welker 2002][Roldán and Millán 2000]. System quality can be measured as system access, system usability, and system navigation.

Based on the above discussion, the measures of SNS features which may affect WOM marketing are listed in Table 1. The measurements will be used in a survey for the experiment participants.

–  –  –

4. Research Design & Construct To test if the above 13 dimensions are the features of SNS which can impact WOM marketing, we conducted two experiments. In these experiments, participants are divided into experimental and control groups. The experimental groups were asked to use SNS (Facebook and MySpace) searching product/service information, and the control groups used non-SNS. The two non-SNS sites are Mobile01 and PTT, the largest online communities in Taiwan. Since we have three categories and each category requires SNS and non-SNS groups, we totally have 6 groups. All participants are students who had no prior experience in using SNS, totally 116 persons. We started the experiment in March 2009.

–  –  –

Figure 1 shows the experiment construct. The groups were asked to conduct the tasks for two weeks. Then, they were given the survey with the questions as in Table 1 in addition to questions for demographic data. Then, tests will be done for hypotheses H1A to H1M as shown in Table 2 for Experiment 1.

Table 2. Hypotheses Item Hypothesis H1A Information providers are regarded with higher expertise on SNS than on non-SNS.

H1B Information providers are regarded with higher reliability on SNS than on non-SNS.

H1C Information receivers feel to have higher expertise on SNS than on non-SNS.

H1D Information providers and receivers perceive to have stronger ties on SNS than on non-SNS.

H1E Information providers and receivers perceive to have higher similarity on SNS than on non-SNS.

H1F Perceived usefulness is higher on SNS than on non-SNS.

H1G Perceived ease of use is higher on SNS than on non-SNS.

H1H Information understandability is perceived higher on SNS than on non-SNS.

H1I Information reliability is perceived higher on SNS than on non-SNS.

H1J Information usefulness is perceived higher on SNS than on non-SNS.

H1K System access is perceived higher on SNS than on non-SNS.

H1L System usability is perceived higher on SNS than on non-SNS.

H1M System navigation is perceived higher on SNS than on non-SNS.

H2A Information providers are regarded with higher expertise after using SNS.

H2B Information providers are regarded with higher reliability after using SNS.

H2C Information receivers feel to have higher expertise after using SNS.

H2D Information providers and receivers perceive to have stronger ties after using SNS.

H2E Information providers and receivers perceive to have higher similarity after using SNS.

H2F Perceived usefulness is higher after using SNS.

H2G Perceived ease of use is higher after using SNS.

H2H Information understandability is perceived higher after using SNS.

H2I Information reliability is perceived higher after using SNS.

H2J Information usefulness is perceived higher after using SNS.

H2K System access is perceived higher after using SNS.

H2L System usability is perceived higher after using SNS.

H2M System navigation is perceived higher after using SNS.

Experiment 2 was conducted after Experiment 1 was finished. The control groups then were asked to use SNS.

After two weeks, they were surveyed by the same questionnaire. Then, H2A to H2M were tested.

Experiment 1 is a randomized control-group posttest design without pretest/posttest comparison, which is Experiment 2. Thus, the two experiments meet Campbell and Stanley’s definition of true experimental design [Campbell and Stanley 1963].

5. Reliability and Validity Tests To improve content validity, we first designed our questionnaire following literature as show in previous sections. Then, we invited MIS experts to evaluate the questionnaire. They are two MIS professors, two MIS Ph.D.



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