literature review

MKTG XXX. Assignment One Xxxxxxxxxxx (xxxxxx), Xxxxxxxxx

MKTG XXX Advanced Advertising and Digital Communications

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Introduction

Word-of-Mouth (WOM) is a longstanding phenomenon within marketing communications. In the context of marketing research and literature, strategies and measures of such phenomena have been studied to gain an understanding of what WOM is, how it affects consumers and brands, and importantly why WOM occurs. WOM first introduced by Whyte (1954), it is described as interpersonal interactions which occurs in informal exchanges i.e. ‘over the clothes line talking with your neighbour’. To be brief, although throughout development in research, the scope in which WOM takes place has broadened i.e. the introduction of online spaces, telecommunications etc. The trait of it being an interpersonal interaction in informal exchanges remains mostly unchanged. It has also been established that WOM remains an important aspect of marketing research, as it is the primary source of consumer information in decision making (East et al. 2007) as well as other extensive functions such as shaping consumer expectations etc. Although research is not new, it is accepted that WOM is powerful and drives consumer influence which plays a crucial role in facilitating insight into brands in the contemporary marketplace, aside from facilitation through traditional mass-media advertising.

Advertising facilitates WOM

What remains a constant tool for marketers is advertising, as a primary method of information distribution (Nelson, 1974). However effective and prevalent in earlier years, traditional media advertising is diminishing, with a growing concern regarding trust for such advertisements by consumers towards facilitators (Huang et al 2011). With this change, market researchers have turned toward WOM as a tool in marketing, largely for its effectiveness when there is strong reach towards audiences and there is impact (Lang et al. 2013). The spread of information occurs through WOM and the marketers job is to facilitate this through enacting various tools to garner intent to engage in WOM from consumers. One such emerging strategy circles back towards advertising as a tool. Studies have shown that a significant portion of WOM is about advertisements, and that such WOM are more powerful in shaping consumer decisions (Keller, 2009). Rather than as a primary function of distributing information, the idea is to now use advertising to instigate WOM behaviour (Keller, 2012). An important first step of such strategies is to identify and understand why consumers chose to engage in WOM.

Motivations behind WOM

Consumers turn towards WOM as a primary source of information. However the complexity of the phenomena is identifying why consumers chose to engage in WOM. Although encapsulated are different distinctions of WOM; electronic word-of-mouth (eWOM), and traditional WOM, both positive and negative word-of-mouth, the basis of which consumers engage in WOM remains relatively similar across distinctions. Hennig-Thurau et al. (2004) discusses the motivations behind engaging in traditional WOM in order to explore eWOM motivations. Similarly to traditional WOM engagement, findings demonstrate that consumers engage in eWOM to satiate varying personal values: The desire for social interaction, desires for economic incentives, their concern for other consumers, and the potential to enhance their own self-worth. Coupling this research, Berger (2014) identifies similar components of motivation and discusses five different functions WOM engagement facilitates: (1) Impression-Management; managing how others and yourself see you, (2) Emotion regulation; Regulating emotions, particularly about a subject, through positive and negative WOM, (3) Information acquisition; Seeking or giving information, (4) Social Bonding; building relationships with others, and (5) Persuasion; Persuading others. Additional research has also found that these motivations remain similar across age demographics despite different methods of engagement in WOM in an online context (Strutton et al. 2011). While there is a good understanding of why WOM is important and there is opportunity to explore and understand more of the causes behind WOM in specific contexts and why some things are shared more than others. Bringing back advertising as a tool in the facilitation of WOM, existing research discusses from a more contextual perspective various causes in why consumers engage in WOM about advertising.

WOM about Advertising

Existing research has explored more specific causes and motives behind engaging in context specific WOM. These causes and motives underlie motives behind WOM in general and may moderate the effects of such motives. Smith et al. (1995) establishes a connection between advertising and negative WOM. The effects of both were explored and findings showed that there is interaction between advertising and negative WOM on consumers processing of information about the ad and the brand. It is demonstrated that negative WOM among consumers can cause ads to be less effective in delivering information or for consumers to process the information slower as it is seen as less credible. This brings up an interesting point where WOM about advertisement has a resulting consequence to brand, and that there is a interaction among consumers outside of the brand-to-consumer interactions when stipulating perceptions about brand performance. Following this, research has explored this relationship further but in a positive context. Graham et al. (2007) establishes empirically that advertising efforts can be more focused towards brand advocacy, pushing consumers towards participating in positive WOM about the advertisement and message, and therefore the brand. Research so far has demonstrated that advertising and WOM are intertwined and reciprocate between each other. With this established, marketing research has explored the different causes and motives behind advertisement reception and therefore WOM behaviour and vice versa.

Motives towards WOM about Advertisements

Lovett et al. (2019) delves further and explores the extent in which types of media advertising content can instigate stronger or weaker WOM. Surprisingly, for the majority of advertisements looked at, there was marginal difference in media type attributes across general platforms and methods of advertisement placement. However, the study also indicates that engagement in WOM behaviour is stronger, when placement is event specific. Interestingly advertisement placement during the Superbowl demonstrates a stronger WOM outcome but for a shorter period of time against regular advertisements. Gopinath et al (2014), investigates the effect of emotional (feeling) versus attribute (information) based advertisements on WOM intention. Consumers with congruent values in information with the advertisements demonstrated synergy towards engaging in more WOM. Further, emotional advertisements demonstrated better outcomes in terms of generating substantial WOM as consumers are more favourable towards emotive discussions. Lastly, Gopinath et al. (2014) also indicated that while WOM is powerful it was not due to how much is being said (volume), but rather what is being said (credibility). Lastly, research has also explored more relational type advertising and its ability to facilitate strong WOM engagement. Hwang et al. (2018) explores the idea of a parasocial relationship; an imagined authentic relationship, between digital celebrities and their followers, and brings forward the idea that such relationships with personalities can be used in advertisements to facilitate better WOM outcomes. Consumers find credibility in personalities they are familiar with and are incentivised through social bonding. Kang et al. (2020) establishes storytelling as an important element within advertisements in order to generate more WOM intention. Against traditional advertising, advertisements which incorporates storytelling elements brought better positive WOM engagement. Information processing is better through emotive language than through attributes as demonstrated in Gopinath et al. (2014). Personalised advertising brings forward better reception from consumers due to relatability and familiarity. Advertising which are more personalised towards an individual or groups with shared values encourages better WOM opportunities as explored by De Keyzer et al. (2021).

Criteria for Advertisement Effectiveness in WOM engagement Comment by Ray Liang: Conceptualisation section (Not required for literature review).

Following previous research, three criteria have been developed to better understand and determine how likely consumers may engage in WOM about advertisements.

Context-heavy

In order for an advertisement to be effective, there should be heavy context associated with the advertisement. The advertisement should have meaning which requires an established understanding of where it originates from, and requires the idea of belonging within a group. This also brings forward the idea of event based advertisement placements, having advertisements within the context of an event is a practical application of this criteria. Social belonging as discussed by Berger (2014). Those with a lack of context, or outside of the ‘social circle’ are likely to have less receptiveness versus those a part of the ‘social circle’. This establishes a basis of community in which engaging in WOM is plausible and familiar. Credibility of WOM is also demonstrated through the knowledge consumers are expected to have when participating. It is not a strong barrier towards those who would like to engage however, as the knowledge can be acquired and is not selective to a few individuals.

Meaningfulness

For an advertisement to establish WOM behaviour, it must be meaningful. This criteria is quite broad as it is subjective to each individual consumer. However, certain meaningful aspects should be recognised within this criteria. These include firstly, congruency; there must be aspects that demonstrate congruent values with the audience. Advertisements featuring brands or products with emotional value should be framed emotively through feeling as consumers will likely have the same emotional perception, those who value informational products and brands will likely be more receptive toward informational advertisements (Gopinath et al. 2014). Secondly, for an advertisement to be meaningful, there needs to be aspects of delight; audiences should feel rewarded for viewing the advertisement. To this extent, the feeling of delight should be something unexpected, but rewarding. This can be done through humour (give the audience a good laugh) or something abstract (give them something to think about) etc. Audiences should not view the advertisement for the sake of viewing it, they should get something out of it. This ties in with the information seeking aspect of those who engage in WOM (Berger, 2014). Although, these two aspects both demonstrate meaningfulness, only one needs to be met to achieve the required meaningfulness that can be shared across the audience.

Relatability

For an advertisement to successfully engage in WOM, it needs to be relatable and understood from the individuals own perspective. Advertisements which can demonstrate relatability typically utilise empathy from audiences. They need to be able to see themselves in the advertisement. This criteria stems from relational advertising. Parasocial relationships in advertisements (Hwang et al. 2018) give a familiar personality in which audiences can embody themselves within, or relate to as they have already established familiarity and shared perspectives with the personality. Storytelling elements (Kang et al. 2020) in advertisement incorporate aspects of life experiences some of which are shared by the audience and bring forward relatability. Storytelling is also engages the audience to think more emotively as they process information which is different from processing attribute information i.e. the functions or specifications of a car for example.

Two Selected Advertisements Comment by Ray Liang: Discussion section (also not necessary for literature review)

https://www.youtube.com/watch?v=gQdLD6kk960

https://www.youtube.com/watch?v=r_VSll0WLZE

Advertisement One (High WOM potential)

The first advertisement is one by Amazon. Within the advertisement, is a story of a young dancer and is framed in the events of 2020. Following the established criteria, Context-heavy is rated 95%, Meaningfulness is rated 90%, and finally relatability is rated 95%. The overall rating is 93%. This advertisement demonstrates high WOM potential as it meets all three criteria. Context-heavy: This advertisement demonstrates the context criteria as it is framed under the events of the 2020 pandemic and the lockdown experience. Although the context is specific to the event i.e. in a few years-time it will not have the same context the potential for WOM is high in the short run. As most audiences will be within the lockdown, and within a shared ‘social circle’. Those who lack context (maybe those in the future) may do some background research in order to educate themselves of the context, before it becomes a receptable advertisement and ‘talking point’. Meaningfulness: The advertisement meets both aspects of meaningfulness. Firstly, it demonstrates congruency with the intended audience. The advertisement was emotionally driven as opposed to attribute driven as the intended audience are likely looking for a sense place to engage in emotional management (Berger, 2014). This brings us to the third criteria, relatability, due to the context and meaningfulness in terms of congruency. It is because of the shared experiences of the global event that is taking place in which the storytelling aspect encapsulates empathetic perceptions of the advertisement. This ties in with the delight aspect of meaningfulness as the story brings the audience on a small journey and experience, rather than just a traditional demonstration of a product.

Advertisement Two (Low WOM potential)

The second advertisement is by Apple. This advertisement is a demonstrates situational and contextual uses of the iPad Air as well as its functions. Following the established criteria, context-heavy is rated 5%, Meaningfulness is rated 20%, finally relatability is rated 30%. The overall rating is 18%. This advertisement demonstrates low WOM potential as it doesn’t meet the three criteria to a satisfactory level. Although the advertisement is traditionally appealing, compared to the first advertisement it lacks the ability to engage in strong WOM behaviour. Context-heavy: the advertisement itself lacks any specific context. It is industry standard in that it demonstrates the product, its functions and how it works and what it can do for you. However it does not tie in with any strong external ‘social circles’. The 5% is to account for the context among Apple brand users which may be a fan of the product and brand. However, joining this ‘circle’ lacks effort and meaning. Someone outside of the ‘circle’ can understand the context of the advertisement easily. Meaningfulness: Meaningfulness is somewhat there, however is not established. Although attributive advertising is used, it is on the weaker side and it does not lay out the functions and specifications of the product which may be important for those who value more attributed WOM engagement. The delight is also arguably unmet as the advertisement appears to be one to watch for the sake of it, and not to take away anything meaningful from it. Lastly, Relatability: this is rated the highest among the criteria only because there are some elements of personalisation placed within the advertisement in acknowledging the functions of everyday life and how the iPad can simplify those aspects.

Theoretical and Practical implications

From existing research and the demonstrated application of existing knowledge, theoretical contributions and practical implications for New Zealand marketers are proposed. Firstly, there is opportunity to explore the relationship between WOM engagement motivation alongside advertisement to develop applicable marketing frameworks. Secondly, marketers can gain a better understanding of how to develop effective advertisements through exploring WOM motivations. Lastly, as New Zealand is a smaller community compared to other countries, the developed criteria focusing around the community aspect of WOM motivation and engagement may be useful in assessing future advertisements WOM potential as well as establish better criteria in advertisement design.

Conclusion

WOM demonstrates the capability of information sharing and consumer influence, whereas advertisements are traditionally a marketers tool to bring forward information. This paper discusses the two concepts and how they are interrelated. From existing literature, knowledge of how consumers engage in WOM is combined with the knowledge regarding advertising receptiveness amongst consumers.

References

Berger, J. (2014). Word of mouth and interpersonal communication: A review and directions for future research. Journal of consumer psychology, 24(4), 586-607. https://doi.org/10.1016/j.jcps.2014.05.002

De Keyzer, F., Dens, N., & De Pelsmacker, P. (2021). How and When Personalized Advertising Leads to Brand Attitude, Click, and WOM Intention. Journal of Advertising, 1-18. https://doi.org/10.1080/00913367.2021.1888339

East, R., K. Hammond, and M. Wright. (2007). The Relative Incidence of Positive and Negative Word of Mouth: A Multi-Category Study. International Journal of Research in Marketing, 24 (2), 175–184. https://doi.org/10.1016/j.ijresmar.2006.12.004

Gopinath, S., Thomas, J. S., & Krishnamurthi, L. (2014). Investigating the relationship between the content of online word of mouth, advertising, and brand performance. Marketing Science, 33(2), 241-258. https://doi.org/10.1287/mksc.2013.0820

Graham, J., & Havlena, W. (2007). Finding the “missing link”: Advertising's impact on word of mouth, web searches, and site visits. Journal of Advertising Research, 47(4), 427-435. https://doi.org/10.2501/S0021849907070444

Hennig-Thurau, T., Gwinner, K. P., Walsh, G., & Gremler, D. (2004). Electronic Word-of-Mouth via consumer-opinion platforms: What motivates consumers to articulate themselves on the Internet? Journal of Interactive Marketing, 18(1), 38-52. https://doi.org/10.1002/dir.10073

Huang, M., Cai, F., Tsang, A. S., & Zhou, N. (2011). Making your online voice loud: the critical role of WOM information. European Journal of Marketing. https://doi.org/10.1108/03090561111137714

Hwang, K., & Zhang, Q. (2018). Influence of parasocial relationship between digital celebrities and their followers on followers’ purchase and electronic word-of-mouth intentions, and persuasion knowledge. Computers in Human Behavior, 87, 155-173. https://doi.org/10.1016/j.chb.2018.05.029

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Lovett, M. J., Peres, R., & Xu, L. (2019). Can your advertising really buy earned impressions? The effect of brand advertising on word of mouth. Quantitative Marketing and Economics, 17(3), 215-255. https://doi.org/10.1007/s11129-019-09211-9

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