A University of Sussex PhD thesis Available online via Sussex Research Online: http://sro.sussex.ac.uk/ This thesis is protected by copyright which belongs to the author. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the Author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the Author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Please visit Sussex Research Online for more information and further details THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING Ying WU PhD Thesis 2017 1 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING Acknowledgements I would like to extend my sincere thanks to my supervisor, Dr Malcolm Stewart for his help throughout the duration of this thesis. His genuine and expert help with regard to enabling me to complete this thesis will forever be appreciated. In addition, I would like to give thanks to the Academics and Practitioners for their time and help with regard to my research. On a personal note, I would like to give my deep appreciation to my family and friends who have provided emotional support throughout this thesis. Thank you! ‘I hereby declare that this thesis has not been and will not be, submitted in whole or in part to another University for the award of any other degree.’ Signature………………………………….. 2 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING Abstract Viral marketing is a form of online word-of-mouth (WOM) communication in which individuals are encouraged to pass on promotional messages through social websites. With the growing popularity of online social websites, viral marketing has increasingly garnered attention of marketers and marketing researchers alike. The two most important WOM attributes highlighted in the extant literature are volume and valence. This thesis looked into the cause, development and outcome of WOM marketing and provided computational models for forecasting the development of WOM volume and valence of viral marketing in social websites. With the data extracted from large-scale web-crawling activities, through a series of computer simulation experiments comparable to social websites, the author developed models to predict WOM volume and valence in viral marketing. The model for predicting WOM volume in viral marketing used theories of network topologies. The model for predicting WOM valence in viral marketing used an artificial neural network model. The author discussed the insights from the findings and suggested viral marketing strategies to optimize the performance of WOM volume and valence in social websites. A key contribution of this thesis is the new approaches of modeling and data collection for WOM volume and valance forecasting in viral marketing. 3 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING Table of Contents TITLE PAGE 1 ACKNOWLEDGEMENTS 2 ABSTRACT 3 TABLE OF CONTENTS 4 LIST OF TABLES 12 LIST OF FIGURES 15 BIBLIOGRAPHY 332 4 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING CHAPTER ONE INTRODUCTION AND BACKGROUND 1.1 INTRODUCTION 20 1.1.1 WOM VOLUME 24 1.1.2 WOM VALENCE 26 1.1.3 BACKGROUND – THE SIGNIFICANCE OF VIRAL 28 MARKETING AND ITS DEFINITION 1.2 RATIONALE FOR THIS STUDY 34 1.3 DISTINGUISHING WOM AND EWOM 39 1.4 AIMS AND SCOPE OF THE STUDY 40 1.5 OVERVIEW OF THE THESIS 44 CHAPTER TWO LITERATURE REVIEW 2.1 WOM AND VIRAL MARKETING: AN 46 INTRODUCTORY OVERVIEW 5 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING 2.1.1 INTRODUCING WOM AND VIRAL MARKETING 46 2.1.2 THE EFFECTIVENESS OF WOM AND VIRAL 53 MARKETING 2.1.3 THE RIPPLE EFFECT OF WOM 58 2.1.4 THE DIFFERENCES BETWEEN ONLINE WOM 61 AND OFFLINE WOM 2.1.5 PREVIOUS RESEARCH ON THEORETICAL 74 FRAMEWORKS AND MATHEMATICAL MODELING OF WOM AND EWOM 2.1.5.1 THE ORGANIC INTERCONSUMER INFLUENCE 75 MODEL 2.1.5.2 THE LINEAR MARKETER INFLUENCE MODEL 77 AND TREE TOPOLOGY MODEL 2.1.5.3 THE NETWORK COPRODUCTION MODEL AND 83 COMPLEX NETWORK TOPOLOGY MODEL 2.2 THE CAUSE, DEVELOPMENT AND OUTCOME OF 86 WOM MARKETING: WITH PARTICULAR REFERENCE TO THE MODELING OF WOM VOLUME 6 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING 2.2.1. THE CAUSE OF WOM VOLUME 86 2.2.2 NETWORK TOPOLOGY AND THE DEVELOPMENT 92 OF WOM VOLUME 2.2.2.1 NETWORK TOPOLOGY THEORY AS 93 CONCEPTUAL BASE FOR WOM VOLUME 2.2.2.2 NETWORK TOPOLOGIES AND WOM VOLUME 106 DEVELOPMENT 2.2.2.2.1 NETWORK TOPOLOGIES SELECTION 106 2.2.2.2.2 DEFINING VARIABLES 127 2.2.3 THE OUTCOME OF WOM VOLUME 132 2.3 THE CAUSE, DEVELOPMENT AND OUTCOME OF 134 WOM MARKETING: WITH PARTICULAR REFERENCE TO THE MODELING OF WOM VALENCE 2.3.1 OVERVIEW OF PREVIOUS LITERATURE 134 REGARDING THE CAUSE OF WORD-OF-MOUTH VALENCE 2.3.2 ARTIFICIAL NEURAL NETWORKS AND THE 152 DEVELOPMENT OF WOM VALENCE 7 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING 2.3.2.1 A REVIEW OF ARTIFICIAL NEURAL 152 NETWORKS 2.3.2.2 ANN SELECTION 159 2.3.2.3 DEFINING VARIABLES 167 2.3.3 THE OUTCOME OF WOM VALENCE 168 2.4 VARIABLES FOR THE MODELING OF WOM 178 VOLUME AND WOM VALENCE 2.4.1 VARIABLES IN THE MATHEMATICAL 178 EXPRESSIONS OF WOM VOLUME 2.4.2 VARIABLES FOR THE MODELING OF WOM 180 VALENCE 2.4.3 SUCCESSFUL VIRAL MARKETING CAMPAIGNS: 180 HIGH WOM VOLUME AND POSITIVE WOM VALENCE 2.5 CHAPTER SUMMARY 187 8 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING CHAPTER THREE RESEARCH OBJECTIVES AND METHODOLOGY 3.1 INTRODUCTION 189 3.2 PHILOSOPHICAL POSITIONING 191 3.3 RESEARCH METHODOLOGY 192 3.3.1 ESTIMATION OF DYNAMIC WOM VOLUME 192 DEVELOPMENT USING NETWORK TOPOLOGY MODELS 3.3.1.1 INTRODUCTION OF COMPLEX NETWORKS 192 3.3.1.2 SMALL WORLD NETWORKS 199 3.3.1.3 RANDOM NETWORKS 204 3.3.1.4 SCALE-FREE NETWORKS 205 3.3.2 ESTIMATION OF DYNAMIC WOM VALENCE 208 DEVELOPMENT USING ARTIFICIAL NEURAL NETWORK MODELS 3.3.3 SAMPLING METHODS AND DATA SOURCING 225 9 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING 3.3.4 EXPERIMENTAL DESIGN 243 3.3.5 COMPUTER SIMULATION EXPERIMENTS 251 3.4 CHAPTER SUMMARY 281 CHAPTER FOUR DATA ANALYSIS AND DISCUSSION 4.1 DATA ANALYSIS AND DISCUSSION OF WOM 282 VOLUME 4.2 DATA ANALYSIS AND DISCUSSION OF WOM 305 VALENCE 4.3 CHAPTER SUMMARY 316 CHAPTER FIVE CONCLUSION 5.1 MAIN CONTRIBUTIONS OF THE STUDY 317 5.1.1 KEY FINDINGS FROM THE STUDY 317 10 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING 5.1.2 KEY THEORETICAL CONTRIBUTIONS 325 5.1.3 KEY PRACTICAL CONTRIBUTIONS 327 5.1.4 KEY EMPIRICAL CONTRIBUTIONS 327 5.2 MANAGERIAL IMPLICATIONS 329 5.3 LIMITATIONS AND SUGGESTIONS FOR FUTURE 330 RESEARCH 11 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING LIST OF TABLES TABLE 1 PREVIOUS LITERATURE ON WOM TABLE 2 DIMENSIONAL DIFFERENCES BETWEEN WOM AND EWOM TABLE 3 THE COMPARISON OF EMPIRICAL STUDIES ON THE EFFECTIVENESS OF WOM TABLE 4 ONLINE WOM AND OFFLINE WOM TABLE 5 SUMMARY OF PREVIOUS RESEARCH ON EWOM TABLE 6 MOTIVATIONS OF WOM TABLE 7 A COMPARISON OF SIMPLE NETWORK TOPOLOGIES TABLE 8 VARIABLES OF THE WOM VOLUME MODEL TABLE 9 INPUT VARIABLES DEFINED FOR THE MODELING OF WOM VALENCE TABLE 10 EFFECTS OF WOM TABLE 11 VARIABLES FOR THE MODELING OF WOM VOLUME TABLE 12 VARIABLES FOR THE MODELING OF WOM VALENCE TABLE 13 MAIN OBJECTIVES AND METHODOLOGIES TABLE 14 COMPLEX SYSTEMS THAT HAVE BEEN STUDIED TABLE 15 COMPLEX NETWORKS TABLE 16 INPUT STIMULI FOR ANN 12 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM VOLUME, VALENCE AND THE MODELING OF VIRAL MARKETING TABLE 17 DATA SOURCING: TWITTER AND WEIBO (CHINA’S VERSION OF TWITTER) TABLE 18 EXAMPLES OF TWITTER API TABLE 19 AN EXAMPLE OF REALIZATION OF THE COMPLEX NETWORK TOPOLOGY MODEL WITH ONE SEEDING SOURCE TABLE 20 A NETWORK TOPOLOGY OVERVIEW OF KATY PERRY’S TWEET TABLE 21 A NETWORK TOPOLOGY OVERVIEW OF XIAOMI WEIBO VOLUME DEVELOPMENT TABLE 22 VARIABLES FOR THE MODELING OF ONLINE WOM VOLUME TABLE 23 DATA FITTING PERFORMANCE OF TREE TOPOLOGY MODELS TABLE 24 PARAMETER ESTIMATES FOR TREE TOPOLOGY MODEL TABLE 25 DATA FITTING PERFORMANCE OF SCALE FREE MODELS TABLE 26 PARAMETER ESTIMATES FOR SCALE FREE MODEL TABLE 27 DATA FITTING PERFORMANCE OF RANDOM NETWORK TOPOLOGY WOM VOLUME MODEL TABLE 28 PARAMETER ESTIMATES FOR RANDOM NETWORK TOPOLOGY MODEL TABLE 29 DATA FITTING PERFORMANCE OF SMALL WORLD NETWORK TOPOLOGY WOM VOLUME MODEL 13 THE CAUSE, DEVELOPMENT AND OUTCOME OF WORD-OF-MOUTH MARKETING: WITH PARTICULAR REFERENCE TO WOM