A multi-stage model of word-of-mouth influence through viral marketing

With the growth and evolution of the Internet, electronic peer-to-peer referrals have become an important phenomenon, and marketers have tried to exploit their potential through viral marketing campaigns. At the same time, spam and e-mail-based viruses have cluttered electronic communications, making viral marketing campaigns problematic and challenging to deploy. The key driver in viral marketing is the effectiveness of unsolicited, electronic referrals to create awareness, trigger interest, and generate sales or product adoption. Yet, despite a large literature concerning interpersonal influence, little is known about how this electronic, or, indeed, any word-of-mouth process influences consumers' actual behaviors, particularly in a cluttered online environment. In this paper, we develop a model to help identify the role word-of-mouth plays during each stage of a viral marketing recipients' decision-making process, including the conditions that moderate such influence. We then present an innovative methodology for collecting data unobtrusively and in real time. We empirically test the model and methodology via a field study, where we observed the reactions of 1100 individuals after they received an unsolicited e-mail from one of their acquaintances, inviting them to take a survey and in turn spread the word about it. We found that characteristics of the social tie influenced recipients' behaviors, but had different effects at different stages: tie strength facilitated awareness, perceptual affinity triggered recipients' interest, and demographic similarity had a negative influence on each stage of the decision-making process. We conclude with a discussion of the theoretical and methodological contributions of our work and of managerial implications of these findings for online marketers interested in strategies for leveraging peer-to-peer referral networks. (c) 2008 Elsevier B.V. All rights reserved.