Word of mouth can be defined as informal communication among consumers about products and services. It includes interpersonal conversation and consumer brand advocacy. More recently, an increase can be seen in online word of mouth, otherwise known as word of mouse. Examples of word of mouse are discussion forums, boycott Websites and news groups.

Marketing research indicates that word of mouse can play an important role in influencing consumers’ purchase behavior. Therefore, some researchers believe that word of mouth should become an integral part of every company’s communications mix. The assumption in literature appears to be that word of mouth and advertising can serve as complements of each other. The paper by Feng and Papatla focuses on the relationship between online word of mouth and advertising. Their goal is to study whether increased advertising is negatively correlated with online word of mouth. They propose several reasons for the negative correlation between the two variables:

• Consumer involvement relates to the argument by Dichter (1966) which argues that consumers’ desire to speak to other consumers about products can be understood in terms of different types of involvement. In particular, four types of involvement are product, self, other and message.
• Selective consumer response relates to the suggestion that consumers can be quite heterogenous in their preference for different sources in their search for information before making purchases. Research by Klein and Ford (2003) has found that people who prefer traditional sources of information (e.g., advertising or visiting dealers) are less likely to be experienced with using the Internet and online sources. Therefore, following the implications of this research, increased advertising is more likely to attract buyers who are less likely to visit or provide online word of mouth.
• The saturation effect refers to the decreasing response of sales to increased advertising. If the saturations effects do occur and sales do not increase as advertising spending increases, consumer word of mouth is also unlikely to increase as advertising spending crosses the saturation levels.

Product involvement refers to the consumers’ feelings regarding, and relationship with, the product. Self involvement refers to the consumer’s use of product-related conversations to satisfy emotional needs (e.g., demonstrating superiority). Other involvement refers to the consumer’s desire to give something to others (e.g., recommending or warning for products). Message involvement refers to word of mouth stimulated due to the consumer’s engagement by advertisements or public relations activities of the product’s manufacturer. Dichter (1966) suggests that factors that affect any of the four types of consumer involvement are likely to affect their desire to speak about products to others. Dichter implicitly assumed that marketing actions that increase any of the four types of involvement eventually increase consumer word of mouth. If so, marketing actions that reduce consumer involvement should decrease word of mouth.

Consumer involvement, selective consumer response and saturation effect are demand-side reasons for the negative correlation between advertising and online word of mouth. However, there are at least two supply-side reasons for the negative correlation between the two variables.

• Differences in spending on advertising by manufacturers. If manufacturers of brands that do not have strong sales spend more on advertising than others, the relationship between advertising and word of mouth is likely to be negative for lower-selling brands since consumers are more likely to discuss brands that they own and use.
• Dynamic adjustments of advertising budgets by manufacturers based on word of mouth response to advertising. If manufacturers decrease advertising spending as word of mouth increases, the relationship between advertising and word of mouth is negative.

The primary finding of the paper is that increased advertising expenditure can be associated with lower online word of mouth. Therefore, the assumption in literature that increased advertising can stimulate online word of mouth are disproved by this article. However, I am personally still in doubt as I do not believe that the relationship between advertising and word of mouth is so clear cut (e.g., what is the direction of the relationship? Causality?) For instance, word of mouth can also increase the effect of advertising as shortly explained in the following video:

The practical implication of the result of this paper is that advertising and word of mouth may not be complementary. Companies that want to increase word of mouth may have to reduce advertising expenditure to increase online word of mouth. Reduced spending on advertising has the advantage that it makes finances available which can be used in the effort to increase online word of mouth.

Sources:

Dichter, E. (1966), “How Word of Mouth Advertising Works,” Harvard Business Review, 44, 147–66.

Feng, J. and Papatla, P. (2011). Advertising: Stimulant or Suppressant of Online Word of Mouth? Journal of Interactive Marketing 25, 75-84.

Klein, Lisa R. and Gary T. Ford (2003), “Consumer Search for Information in the Digital Age: An Empirical Study of Prepurchase Search for Automobiles,” Journal of Interactive Marketing, 17, 3, 29–49.