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Saturday, December 12, 2009

The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms

ABSTRACT


Online feedback mechanisms harness the bidirectional communication capabilities of the Internet to engineer large-scale, word-of-mouth networks. Best known so far as a tech- nology for building trust and fostering cooperation in online marketplaces, such as eBay, these mechanisms are poised to have a much wider impact on organizations. Their growing popularity has potentially important implications for a wide range of management activities such as brand building, customer acquisition and retention, product development, and quality assurance. This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms represent. It discusses some important dimensions in which Internet-based feedback mechanisms differ from traditional word-of-mouth networks and surveys the most important issues related to their design, evaluation, and use. It pro- vides an overview of relevant work in game theory and economics on the topic of reputation. It discusses how this body of work is being extended and combined with insights from computer science, management science, sociology, and psychology to take into consideration the special properties of online environments. Finally, it identifies opportunities that this new area presents for operations research/management science (OR/MS) research.

About authors
Chrysanthos Dellarocas (2003)

Click here for more details
http://ccs.mit.edu/dell/digitization%20of%20word-of-mouth.pdf

Measuring the Customer Experience in Online Environments: A Structural Modeling Approach

ABSTRACT


Intuition and previous research suggest that creating a compelling online environment for Web consumers will have numerous positive consequences for commercial Web providers. Online executives note that creating a compelling online experience for cyber customers is critical to creating competitive advantage on the Internet. Yet, very little is known about the factors that make using the Web a compelling experience for its users, and of the key consumer behavior out- comes of this compelling experience. Recently, the flow construct has been proposed as important for understanding consumer behavior on the World Wide Web, and as a way of defining the nature of compelling online experience. Although widely studied over the past 20 years, quantitative modeling efforts of the flow construct have been neither systematic nor comprehensive. In large parts, these efforts have been hampered by considerable con- fusion regarding the exact conceptual definition of flow. Lacking precise definition, it has been difficult to measure flow empirically, let alone apply the concept in practice. Following the conceptual model of flow proposed by Hoffman and Novak (1996), we conceptualize flow on the Web as a cognitive state experienced during navigation that is determined by (1) high levels of skill and control; (2) high levels of challenge and arousal; and (3) focused attention; and (4) is enhanced by interactivity and telepresence. Consumers who achieve flow on the Web are so acutely involved in the act of online navigation that thoughts and perceptions not relevant to navigation are screened out, and the consumer focuses entirely on the interaction. Concentration on the navigation experience is so intense that there is little attention left to consider anything else, and consequently other events occurring in the consumer's surrounding physical environment lose significance. Self-consciousness disappears, the consumer's sense of time becomes distorted, and the state of mind arising as a result of achieving flow on the Web is extremely gratifying. In a quantitative modeling framework, we develop a structural model based on our previous conceptual model of flow that embodies the components of what makes for a compelling online experience. We use data collected from a large- sample, Web-based consumer survey to measure these constructs, and we fit a series of structural equation models that test related prior theory. The conceptual model is largely supported, and the improved fit offered by the revised model provides additional insights into the direct and indirect influences of flow, as well as into the relationship of flow to key consumer behavior and Web usage variables. Our formulation provides marketing scientists with operational definitions of key model constructs and establishes reliability and validity in a comprehensive measurement framework. A key insight from the paper is that the degree to which the online experience is compelling can be defined, measured, and related well to important marketing variables. Our model constructs relate in significant ways to key consumer behavior variables, including online shopping and Web use applications such as the extent to which consumers search for product information and participate in chat rooms. As such, our model may be useful both theoretically and in practice as marketers strive to decipher the secrets of commercial success in interactive online environments.

About authors
Thomas P. Novak, Donna L. Hoffman, Yiu-Fai Yung (2000)

Click below fo find more details
http://www.jstor.org/stable/193257

Factors Driving Consumer Intention to Shop Online: An Empirical Investigation

ABSTRACT


This article examines consumers' intention to shop online during the information acquisition stage. Specifically, the study incorporates 3 essential variables, which are likely to influence consumer intentions: (a) convenience characteristic of shopping channels, (b) product type characteristics, and (c) perceived price of the product. Results indicate that convenience and product type influence consumer intention to engage in online shopping. When consumers perceive offline shopping as inconvenient, their intention to shop online is greater. Also, online shopping intention is higher when consumers perceive the product to be search goods than experience goods.

About authors
Kuan-Pin Chiang and Ruby Roy Dholakia (2003)

Click here for further details
http://www.jstor.org/stable/1480436

Friday, December 11, 2009

The Future on online advertising is a VIDEO

This is a very useful video to give you the idea about the importance of online advertising industry.

http://www.youtube.com/watch?v=5rtiHiGmoxk

Online advertising: Pay-per-view versus pay-per-click — A comment

Abstract


We analyze the choice of pay-per-view (PPV) and pay-per-click (PPC) when a web publisher is a price taker in the market for advertising banners, and the number of visits is decreasing in advertising. Several pricing recommendations are developed. First, the web publisher should always choose either PPV or PPC. Specifically, if the click-through rate is less than the ratio of PPV to PPC prices, then PPV should be chosen, and vice versa. Furthermore, if the click-through rate is exogenous, then the optimal amount of advertising is the same for both pricing methods. Finally, if the click-through rate is endogenous, the amount of advertising will be different under PPV and PPC

Find out about authors
Kenneth Fjell- Journal of Revenue and Pricing Management (2009) 8, 200–206. doi:10.1057/rpm.2008.39; published online 21 November 2008

Click here more details
http://www.ingentaconnect.com/content/pal/rpm/2009/00000008/F0020002/art00009

The Online Advertising Industry: Economics, Evolution, and Privacy

Abstract:
Online advertising accounts for almost 9 percent of all advertising in the United States. This share is expected to increase as more media is consumed over the Internet and as more advertisers shift spending to online technologies. The expansion of Internet-based advertising is transforming the advertising business by providing more efficient methods of matching advertisers and consumers and transforming the media business by providing a source of revenue for online media firms that competes with traditional media firms. The precipitous decline of the newspaper industry is one manifestation of the symbiotic relationship between online content and advertising. Online-advertising is provided by a series of interlocking multisided platforms that facilitate the matching of advertisers and consumers. These intermediaries increasingly make use of detailed individual data, predictive methods, and matching algorithms to create more efficient matches between consumers and advertisers. Some of their methods raise public policy issues that require balancing benefits from providing consumers more valuable advertising against the possible loss of valuable privacy.

Find out about authors
Evans, David S. 2009. "The Online Advertising Industry: Economics, Evolution, and Privacy." Journal of Economic Perspectives, 23(3): 37–60.


DOI:10.1257/jep.23.3.37

Click here for further information
http://www.aeaweb.org/articles.php?doi=10.1257/jep.23.3.37

Survey of internet users’ attitudes toward internet advertising

A B S T R A C T


Many have speculated about the current state of Internet advertising (IA), how it compares to advertising in general (GA), and its implications for traditional marketing models and practices.

Although many estimates exist regarding who uses the Internet as well as guidelines about how best to design IA, little is known about Internet users’ attitudes toward IA, much less what characterizes these attitudes. To test this, a national sample of over 400 participants with at least some exposure to the Internet was surveyed. The results revealed no majority opinion of IA approximately a third of respondents liked, disliked, and felt neutrally toward IA, respectively. A regression analysis indicated that enjoyment of looking at Internet advertisements, its informativeness, and its utility for making behavioral (purchasing) decisions.

Find out about authors

Authors: Ann E. Schlosser Sharon Shavitt Alaina Kanfer


© 1999 John Wiley & Sons, Inc. and Direct Marketing Educational Foundation, Inc.

CCC 1094-9968/99/030034-21

JOURNAL OF INTERACTIVE MARKETING

VOLUME 13 / NUMBER 3 / SUMMER 1999

Click on the following link for more details
http://www.business.uiuc.edu/Shavitt/pdf%20files/surveyinternet_copy%281%29.pdf