Online Word-of-Mouth Reviews

Introduction

During the past two decades, B2C e-commerce has been developed rapidly and more and more consumers are accustomed to online shopping. In practice, some specific Internet platforms such as consumer review sites, online discussion forums, electronic bulletin board systems, blogs, and social network sites have significant impacts on a consumer’s purchase decision. On these Internet platforms, information about a product such as its price, characteristics, and quality, spreads more quickly and widely. This online word-of-mouth (WOM) appraisal of the product eventually attracts more consumers to be concerned with this information before their purchase decisions.

To take advantage of online WOM, many firms have launched different marketing or service programs on Internet platforms mentioned above as a new marketing tool (Dellarocas, 2003). For instance, since 2009, Ford has made heavy use of online social media to build awareness and buzz for their new vehicle by conducting the “Ford Fiesta Movement” campaign. The company engaged with the online community by inviting 100 young people to live with the car for six months and to report on their experiences on a variety of social media, including Twitter, Facebook, MySpace and YouTube. Each of these “agents” completed monthly special missions based on a theme which were designed to be fun experiences. The campaign was a great success in terms of overall marketing cost, creating hype and keeping the vehicle in the eyes of the public.

Owing to its huge influence on consumers and firms, online WOM has also received increasing attention from researchers. For instance, Phelps et al. (2004) and Park and Lee (2009) explained the reasons why online WOM is more influential than traditional WOM; Cheung and Lee (2012) investigated the factors that drive consumers to spread WOM in online consumer opinion platforms; Lee and Lee (2009) analyzed the consequences of online WOM; and Lee et al. (2008) and East et al. (2008) divided the online WOM into positive and negative effects, and explored their influence on consumers’ judgment and purchase behavior.

While most previous literature focused on a single aspect of online WOM, there are few studies presenting an overview on this research issue. In this chapter, to facilitate researchers entering this area quickly, we review previous studies on online WOM. We divide previous literature into the following three streams and discuss them in detail, including

• 1.

  The effectiveness of online WOM,

• 2.

  The valence of online WOM, and

• 3.

  The antecedents and consequences of online WOM.

The contents of this chapter are organized as follows.

Firstly, we compare online WOM with traditional WOM, discussing the effects in detail. Secondly, we review papers on the effectiveness of online WOM, the valence of online WOM, and the causes and consequences of online WOM. The effects of online WOM include the awareness effect and the persuasive effect on consumers, and the advertising effect on the market. The valence of online WOM concerns positive WOM, negative WOM and neutral WOM, in which neutral online WOM is objective and thus beyond the scope of this paper. In addition, most researches have demonstrated that negative online WOM has greater effect on consumer intention than positive online WOM. The antecedents of online WOM focus on the motivation for consumers spreading online information while the researches on the consequences are mainly from market-level and individual-level aspects.