Consumer word-of-mouth and social media

Certainly, marketers are well aware of the value of the consumers’ word-of-mouth (WOM) endorsements of a product or service. But the ubiquitous nature of social media demands that advertisers find new ways to tap into how consumers interact and communicate to leverage the power of WOM online. Panagiotis Adamopoulos, assistant professor of information systems & operations management; Vilma Todri, assistant professor of information systems & operations management; and Anindya Ghose (NYU-Stern) take a close look at the role of hidden personality traits of online users and how they play into the effectiveness of product WOM on Twitter. The trio used big data, machine learning methods, and causal inference econometric techniques to study consumer purchases made through Twitter accounts. The research showed an increase in the likelihood of a purchase by 47.58% when there was exposure to WOM tweets from a sender who had similar personality traits to the recipient of the information. The trio found that introvert users were much more accepting of WOM versus extrovert users. They also noted agreeable, conscientious, and open social media users are more effective influencers. The combinations of personality traits of disseminators and recipients of WOM impacted the decision to buy a product, with the researchers noting that a “WOM message from an extrovert user to an introvert peer increases the likelihood of a subsequent purchase by 71.28%.”

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