Valuing customers for social network services

In the current Internet environment, many online service companies based on community factors (networks) produce and sell new types of digital products. For example, SNS (social network service) companies now sell customers digital decorative products for the adornment of online avatars. Not only do individual customers consume these digital products, but they also exchange them as gifts in their local neighborhoods. While previous studies on customer valuation (e.g. CLTV, RFM, etc.) focus on some important issues for identifying valuable customers, the literature does not resolve issues related to the effects on customer value of products purchased as gifts for another person. This study attempts to verify empirically the effects of two representative social network properties (tie strength and the number of ties) on customer monetary value.This study selects 2615 customers from a South Korean SNS website who enrolled on the site on the same day. Data include diverse purchase-related information, social network properties in terms of gift-giving for six months, and demographic information. The primary results of this study are as follows. First, the proposed model, which includes social network properties, has a great deal more explanatory power than the baseline model — the RFM-based customer value model. Second, tie strength and the number of ties in a gift-giving network increase customer value. Third, tie strength has a more profound impact on customer value than does the number of ties. The results of this study theoretically expand the domain of customer valuation studies due to the inclusion of social network properties, and suggest important practical implications for some online SNS companies in their efforts to find valuable customers and improve customer value.     

Sales Response to Advertising

Advertising research still has to make a major contribution, both theoretically and practically, providing a satisfactory answer to the question: how does advertising influence sales? This article tackles the problem by providing a thorough analysis of the causal relationship between advertising and sales, the strength of the effects and the occurrence of time lags. Time series data for advertising and sales are related to each other in a quantitative model to provide an answer to the question of how advertising contributes to sales. The method presented is applicable to other related studies and information can thus be accumulated about the usefulness of the model.     

Public Attitudes to Advertising

In this paper research carried out between 1961 and 1981 is discussed.     

Repetitive Advertising to Deter Entry

This paper develops a model in which advertising not only informs consumers of brands, but also can influence consumer brand choices through its repetition. By examining a multi‐stage game in which two firms sequentially advertise before simultaneously setting a price, we show that repetitive advertising can be a legitimate entry‐deterrence weapon available to an incumbent in subgame perfect equilibrium. This demonstrates that firms’ conduct of advertising repetition has anticompetitive implications.     

The Global Challenge to Advertising

Abstract

Written by several executives of the International Advertising Association, “The Global Challenge to Advertising” was first made public at the 23rd IAA World Congress in Dublin in early June of 1973. The study, with detailed examples from many areas, brings into focus the two main currents of world-wide opposition to advertising: mounting consumer dissatisfaction with product quality and claims, and increasing government regulation and control of advertising. It is reprinted here by permission of the International Advertising Association, 475 Fifth Avenue, New York, N.Y. 10017.     

Consumer Response to Coupon Advertising

Because coupon advertising has both the characteristics of advertising and sales promotion, it may have distinctive effects on consumers that cannot be explained solely by coupons or advertising. Past studies present contradicting results as to the consumers' response to coupon advertising. Our experiment shows that while the coupon may be an incentive for loyal consumers of competing brands, it may be a distractor for brand-loyal consumers in processing the coupon advertising. For multi-brand users, coupons do not appear to have any distinctive effects on processing the coupon advertising. An empirical investigation of an integrated consumer response model to coupon advertising indeed shows that there are various interactive effects between the coupon and the main advertisement. These results may provide guidelines for making targeting and promotion decisions, especially for an internationally well-known brand that is entering a new market where local or other international brands are already serving the customers.     

Entrepreneurship ecosystems and women entrepreneurs: a social capital and network approach

This study investigates the effects of venture typology, race, ethnicity, and past venture experience on the social capital distribution of women entrepreneurs in entrepreneurial ecosystems. Social network data from two municipal ecosystems in Florida, USA (Gainesville and Jacksonville), suggest that network connectivity and the distribution of social capital are significantly different for men and women entrepreneurs. This difference is contingent on the venture type. Male entrepreneurs show higher comparative scores of bridging social capital in aggressive- and managed-growth venture networks, while women entrepreneurs surpass their male counterparts’ bridging capital scores in lifestyle and survival venture networks. Lastly, experienced women entrepreneurs that self-identified as white showed a higher degree of network connectivity and bridging social capital in the entrepreneurial ecosystem than less experienced non-white female entrepreneurs. Implications for entrepreneurship practice and new research paths are discussed.

     

Retailer use of a professional social media network: Insights from franchising

The adoption and use of a professional social media network by franchise chains is the focus of this paper. We draw on resource-based theory, institutional economic theories of incentives and externalities and multidisciplinary literatures on franchising, innovation adoption and interorganizational communication to link (i) franchisor characteristics and partnering strategies to the adoption and use of a professional social media network and (ii) the extent of use of this network by a franchisor to the number of followers of its network page. Hypotheses are empirically assessed using data on 500 US franchise chains from Entrepreneur’s Annual Franchise 500 for 2011, content analysis of LinkedIn pages for 317 franchise chains in 2011 and number of followers in 2015. One key finding is that franchisor adoption of LinkedIn is positively influenced by franchise chain size, franchising fees and franchisor marketing communications and negatively affected by franchise concept complexity. A second important finding is that, among franchisors who adopt LinkedIn, the extent of use of LinkedIn is positively impacted by franchise chain size, franchising fees and negatively affected by franchise chain age. A third notable finding is that the number of followers of a franchisor’s LinkedIn page in the short term is positively impacted by the extent of information about franchise chain and recruitment. A fourth key finding is that the number of followers in the longer term (2015) is positively impacted by whether the franchisor had a presence on LinkedIn in 2011 and, for these franchisors, by the number of followers in 2011.     

How to Monitor Competitive Advertising

Marketing managers are becoming increasingly aware of the benefits from structured and continuous monitoring of competitor advertising activity. To know quickly and accurately how much competitors are spending on their media advertising and how they are utilizing their budgets can be of profound help to marketing management, advertising agency planners and creative teams. Systematic monitoring can signal moves made by competitors—introducing new products or product modifications, special offers, new strategies and approaches to markets not previously covered. Of interest to the analyst are innovations in competitor strategies.     

Towards a Praxiology of Advertising

This article argues for the need to abandon traditional models of advertising effect, if a theory is to be developed which is capable of fitting the observable reality that people use advertisements deliberately rather than being used by them. Using information processing theory as the best available organizing principle, it proposes a number of candidate elements of a future, fully grounded theory of advertising effect.     

Advertising as a Positive Force

Abstract

This paper presents the results of two empirical studies designed to assess the effectiveness of sexual embedding in advertising. In Study 1, a sample of 424 viewed and evaluated two ads with embeds or two matched ads without embeds. The results indicated that embedding was effective in raising attitudinal evaluations of a liquor ad but not a cigarette ad. In Study 2, GSR measurements were taken on a sample of 36 subjects while they viewed both versions (with and without embeds) of two ads. The results of Study 2 indicated that embedding was effective in increasing GSR measurements for the versions of the ads with embeds.     

A social network analysis of customer-level revenue distribution

Social network analysis has been a topic of regular interest in the marketing discipline. Previous studies have largely focused on similarities in product/brand choice decisions within the same social network, often in the context of product innovation adoption. Not much is known, however, about the importance of social network effects once customers have been acquired. Using the customer base of a telecommunications company, our study analyzes network autocorrelation in the distribution of customer-level revenue within a social network. Our results indicate a significant and substantial degree of positive network autocorrelation in customer-level revenue. High (low) revenue customers therefore tend to be primarily related to other high (low) revenue clients. Furthermore, we show that approximating communicative proximity by spatial proximity leads to a substantial underestimation of these effects.     

Beyond the Return on Advertising: Elasticity of the Return on Advertising as a Diagnostic Metric to Maximize Profit

With increased marketing expenditures, managers need to be equipped with valid and reliable measures capable of showing links between marketing investments and a firm's profitable performance. In this paper we demonstrate that traditional return on advertising (ROA) can be a misleading metric if a firm's goal is profit maximization. Then, we introduce a new diagnostic tool: the elasticity of ROA and show how this metric can help marketing managers to choose more profitable levels of advertising. This new measure has the same virtues as other traditional measures of elasticity and provides real advantages over the conventional metrics.     

Advertising Facts and Advertising Illusions

The concept of low involvement has attracted considerable interest, particularly over the last ten years, but its implications f or advertising (strategy, execution and research) are still not clear. This paper reviews the low-involvement literature and attempts to define what is meant by the concept, predict when low involvement is likely to occur and identify its key determinants. The paper then reviews and assesses what the literature has to say about the specific implications for advertising strategy in high- and low-involvement situations and concludes that the potential and power of advertising in low-involvement situations have been misunderstood and underestimated.     

Attitude Toward the Viral Ad: Expanding Traditional Advertising Models to Interactive Advertising

As a form of advertising, viral video (VV) advertising is distinct in that its communication medium is the social connections between individuals instead of formal media. After viewing VV advertising, people are engaged in two independent but interrelated processes, i.e., video sharing and embedded brand information processing. Previous research has not examined the interaction between the two processes. This study expands on the mediation of attitude toward the advertisement model proposed by MacKenzie, Lutz, and Belch (1986). Experimental results from three viral video advertisements show that attitude toward the VV advertisement is the major factor affecting video sharing, but attitude toward the brand also has a significant impact on sharing activity. Affect transfer hypothesis (ATH) and its extended models are optimal in explaining viral video advertising, which is different from prior research on non-viral advertising that suggests dual mediation hypothesis as the optimal explanatory theory.     

Advertising in Relation to Economic Growth

This paper is the modified version of a text first delivered at the 13th Asian Advertising Conference held in New Delhi in September 1982.     

广告压岁钱

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The Piecemeal Approach to Comparative Advertising

When attempting to portray the attractiveness of a brand vis-à-vis its competitors, an ad may make global claims about superiority or specific claims about one or more attributes. A special case of latter is the piecemeal ad in which the advertised brand is compared to a competitor on one attribute, a different competitor on a second attribute, another competitor on a third attribute, and so on. The present research demonstrates the effectiveness of this technique and explores the parameters of its influence. We find that piecemeal messages are persuasive because they make seemingly strong claims in a believable manner. Consumer skepticism appears to arise only when conditions for scrutiny are very favorable.     

Women's Responses to Sex in Advertising

Abstract

Advertising researchers have neglected to analyze women's reactions to sexual appeals, and researchers are just beginning to recognize the utility of personality variables as predictors of responses to sex in advertising. This study addresses both areas by testing women's reactions to a sexual commercial, and examining the relationship between women's sexual schemas with their responses. Sexual schemas are people's cognitive views of themselves that predict approach/avoidance to sexual behavior and sexual information. Overall, women who have more positive sexual self-schemas (sex positive) were found to have more positive attitudes-toward-the-ad and brand interest for the sexual ad. Purchase intention, however, was not affected. The findings and their implications are discussed.