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Television Advertising and Online Word-Of-Mouth: an Empirical Investigation of Social TV Activity

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Marketing Science Institute Working Paper Series 2015 Report No. 15-106 Television Advertising and Online Word-of-Mouth: An Empirical Investigation of Social TV Activity Beth L. Fossen and David A. Schweidel Report Summary As multi-screen media consumption rises, marketers need to understand the relationship between television advertising and online WOM in order to assess the extent to which they can leverage social TV activity. In this report, Beth Fossen and David Schweidel explore how primetime television advertising contributes to online WOM about the brand featured in the advertisement and the television program in which the advertisement airs. They also examine how specific brand, advertisement, and program characteristics impact online brand and program chatter and assess the potential value of social TV activity. Their data set includes television advertising instances on network broadcasts, minute-by-minute social media data of Twitter conversations mentioning brands and programs, and data on brand, advertisement, and program characteristics. Their data include over 9,000 ad instances for 264 brands across 15 categories that aired on 84 primetime network programs during the fall 2013 television season. They employ a hierarchical Bayesian model to conduct their investigation. Overall, they find evidence that television advertising has the potential to increase online WOM about the advertised brand and the program in which the ad airs. This result reveals the potential benefit of social TV for advertisers and also challenges the industry perspective that television viewers are less likely to engage in online program chatter during commercials. Among their findings: The program in which the advertisement airs affects the extent of online WOM for both the brand and program following television advertising. Online WOM increases more for both brands and programs when there is high brand-program synergy. Brands that advertise in programs that experience higher than expected online program chatter following television advertisements don’t necessarily experience increases in online WOM for the brand. This suggests that the programs that receive the most online WOM aren’t necessarily the best programs for advertisers seeking to generate online chatter. Specifically, online program WOM increases substantially following the first advertisement in a commercial break. However, advertisers can increase online WOM for their brands following advertisements airing in the first ad slot by incorporating digital calls-to-action, specifically a hashtag or web address, into the creative. These results suggest the need for social TV activity to be viewed in terms of viewer engagement with both programs and advertisements. The findings shed light on how marketers, television networks, and program creators can increase online WOM for their respective brands and programs through media planning and advertisement design strategies and incorporate online WOM into the media planning and buying process. Beth L. Fossen is a doctoral candidate in marketing and David A. Schweidel is Associate Professor of Marketing, both at the Goizueta Business School, Emory University. Marketing Science Institute Working Paper Series 1 Acknowledgments The authors thank Kantar Media and the Goizueta Business School research support for providing the funds to acquire and build the dataset in this research. Marketing Science Institute Working Paper Series 2 Introduction Does television advertising drive online word-of-mouth (WOM)? Is an advertisement’s ability to generate online WOM determined by the brand advertised, or does the context in which the advertisement airs – the television program – also play a role? Furthermore, does television advertising have the ability to affect the volume of online conversations about the brand advertised and the program in which the advertisement airs? Research in the marketing literature has established that online WOM matters and can increase new customer acquisition (e.g., Trusov, Bucklin, and Pauwels 2009), television ratings (e.g., Godes and Mayzlin 2004), and sales (e.g., Chevalier and Mayzlin 2006; Kumar et al. 2013; Moe and Trusov 2011; Rishika et al. 2013). While the positive consequences of online WOM have been identified, research into the drivers of online WOM is still in its infancy, and the extant literature has yet to explore these questions. As the rise of multi-screen media consumption has outpaced the field’s understanding of the activity (e.g., Copeland 2013; Hare 2012; Poggi 2012), the relationship between television advertising and online WOM is an increasingly important topic to investigate in order to assess the extent to which marketers can leverage such multi-screen behavior. In this research, we address these questions and investigate how television advertising contributes to online conversations, bridging the gap in extant literature on online WOM and television viewing. Specifically, we explore how primetime television advertising contributes to online WOM about (1) the brand featured in the advertisement and (2) the television program in which the advertisement airs. We further examine how specific brand, advertisement, and program characteristics impact online brand and program chatter and assess the potential value of social TV activity, defined as social media interaction with television programming (Hill, Nalavade, and Benton 2012), to marketers. Nielsen (2014) estimates 84% of tablet and smartphone users engage in multi-screen behavior while watching television. Joint work from Twitter, FOX, and the Advertising Research Foundation finds that 85% of Twitter users active during primetime programming contribute to online conversations about television and 90% of users exposed to this chatter have taken TV- related action such as switching channels to watch a program or searching online for additional program information (Midha 2014). Overall, the global media industry’s interest in social TV is substantial as social-media related television businesses comprised a $151 billion industry in 2012; this number is estimated to grow to $256 billion in 2017 (Lomas 2012). Despite this rapid Marketing Science Institute Working Paper Series 3 growth in social TV activity, advertisers and networks are facing challenges trying to grasp the value of this behavior (e.g., Copeland 2013; Hare 2012; Poggi 2012). With this study, we contribute to research on online WOM and television advertising by advancing understanding of social TV behavior and exploring the value of this activity for both advertisers and networks. We construct a data set that includes television advertising instances on network broadcasts, minute-by-minute social media data of Twitter conversations mentioning brands and programs, and data on brand, advertisement, and program characteristics. We supplement this data by coding the use of calls-to-action in each advertisement (e.g., does an ad feature a hashtag?) to assess their impact on online WOM. Our data include over 9,000 ad instances for 264 brands across 15 categories that aired on 84 primetime network programs during the fall 2013 television season1. We jointly model the immediate change in online mentions for both the brand and the program following an advertisement’s airing. To assess if the context in which a television ad airs influences its impact on online WOM, we incorporate a measure of brand-program fit based on advertisers’ choices of which programs to air their ads during (Schweidel, Foutz, and Tanner 2014), which we refer to as brand-program synergy. We use this model framework to evaluate the impact of brand and advertisement characteristics (e.g., calls-to-action) and program characteristics (e.g., genre, network) on online WOM. In doing so, our analysis sheds light on how advertisers and television networks can encourage online WOM for their respective brands and programs. We find evidence of increases in online mentions for both brands and programs following advertisements, illustrating that television advertising has the potential to increase online WOM about the advertised brand and the program in which the ad airs. This result reveals the potential benefit of social TV for advertisers and also challenges the industry perspective that television viewers are less likely to engage in online program chatter during commercials (Nielsen 2013). We also find that the increase in online WOM from television advertising depends on brand- program synergy, with online WOM increasing more for both brands and programs when there is high synergy. This suggests that the context in which an advertisement airs influences online 1 Additional details of our data are presented in Tables A1 and A2 in the Appendix (Tables follow References throughout). Marketing Science Institute Working Paper Series 4 WOM and could have implications for advertiser-network negotiations as it provides an incentive for both parties to consider brand-program synergies in the media buying process. Interestingly, we also find that brands that advertise in programs that experience higher than expected online program chatter following television advertisements don’t necessarily experience increases in online WOM for the brand. This suggests that the programs that receive the most online WOM aren’t necessarily the best programs for advertisers seeking to generate online chatter. Our results also shed light on the factors that influence social TV activity as we discover that numerous brand, advertisement, and program
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