Wharton Study Shines New Light on Online vs. Offline Word of Mouth

The theory and practice that underlies SMR is that monitoring organizing and analyzing what consumers are saying in social media provides a rich data set for understanding important issues themes unmet needs and so forth without the need for surveybased or other more quottraditionalquot forms of marketing researchOne of the big unanswered questions however is how representative is the data that comes from SMR This question is particularly relevant when asked in the context of research findings from the Keller Fay Group that more than 90 of brandrelated word of mouth takes place offline not onlineShedding important new light on this question is a major new academic research study that was presented last week at the Wharton School at a conference cosponsored by the Wharton Interactive Media Institute WIMI and the Marketing Sciences Institute MSI The authors Professors Renana Peres Visiting Professor of Marketing at the Wharton School and the Hebrew University of Jerusalem and Ron Shachar Fuqua School of Business at Duke and Tel Aviv University have assembled a very large set of data including online word of mouth provided by NM Incite the joint venture between Nielsen and McKinsey offline word of mouth provided by the Keller Fay Group brand equity provided by Brand Asset Valuator and custom research on brands conducted by Decipher Over 700 US brands in total were analyzed spanning 16 product categories covering the period from 2007 2010 So this is a very comprehensive and robust research undertakingThe authors39 ambition was to address the scarcity of knowledge about the onlineoffline dynamic quotThis raises a critical concern amp8211 are we searching for answers where the light is Are the insights we gain from the online data sets relevant for the offline behavior Are we doing the right thing when we generalize across channels Are marketing managers doing the right thing when they choose between the analysis of offline data and the analysis of online word of mouth data assuming that these two sources are substitutesquotThe headline finding is clear quotOnline data does not reflect well the offline behavior Word of mouth is not channel neutral One cannot automatically generalize the results from online to offlinequotThis chart provides compelling evidence of the differences between the online and offline channels which shows the distribution of the 700 most talked about brands by categoryCategory Distribution of Offline and Online Word of Mouthamp160 of offline of onlineBeauty products51Beverages133Cars1017Children39s products20Clothing products73Department stores54Financial services42Food and dining124Health products and services31Home design and decoration11Household Products20Media and entertainment932Sports and hobbies38Technology products and stores1317Telecommunications97Travel services31amp160amp160amp160The first column is the distribution of the word of mouth mentions offline across 700 brands The categories with the large percentage of conversation are technology beverages and food followed closely by telecomm and media But no one category dominatesCompare this to online WOM in the second column where the picture is totally different and in many respects much more extreme Fully 13 of all conversation is about media and entertainment brands Cars and technology together represent another 13 of all conversation If you add in sports you have covered three quarters of all WOM and there is very little conversation about the restWhat does this research mean It means that we cannot look at the online WOM and think that it represents the offline WOM and vice versa These are two different pictures For marketers and researchers who are searching for the truth about what people are saying about products services and brands so that smart decisions can be made we need to take a holistic view and listen to all the voices of consumers both those that are expressed online and those that take place offlineClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Wharton Study Shines New Light on Online vs. Offline Word of Mouth

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Edward Keller

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Wharton Study Shines New Light on Online vs. Offline Word of Mouth

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