Reports

Does Offline TV Advertising Affect Online Chatter? Analysis of Quasi-Experimental Data Using Synthetic Control

Gerard Tellis and Seshadri Tirunillai, 2016, 16-130

As advertising expenditures move rapidly from traditional to new media, an under-researched issue is whether offline TV advertising can affect online chatter. In this report, Gerard Tellis and Seshadri Tirunillai address the following questions:

  • Does offline TV advertising campaign affect online chatter? If so, how strongly?
  • Which metrics of online chatter, based on metrics of consumer reviews and blogs, are most influenced by TV advertising?
  • What are the dynamics of advertising effects (“wear-in” (buildup), “wear-out” (decay), and duration) on the various metrics of chatter?

Their study context is the introduction of a TV advertising campaign of a focal brand, Hewlett Packard (HP). They monitor the advertising and chatter of HP together with that of control brands that are close rivals of HP (constructed via the synthetic control method). They link advertising to multiple metrics of chatter (popularity, negativity, visibility, and virality) that are based on a large-scale analysis of the content of the text and hyperlink structure of online chatter.

Among their findings:

  • Offline TV advertising causes a short but significant positive effect on online chatter.
  • This effect is stronger on information-spread dimensions (visibility and virality) than on content-based dimensions (popularity and negativity).
  • In terms of elasticity, advertising has a strong effect on popularity in the short term while it has the most impact on virality in the long term.
  • Among the information-spread dimensions, the wear-in is quickest for popularity and the wear-out is longest for visibility and virality. The accumulated effect persists for the longest time for virality. 
  • Importantly, advertising also has a small short-term effect in decreasing negativity in online chatter.

Managerial implications

First, managers should consider the effect of advertising on online chatter as well as sales. Testing that effect may enable advertisers to assess the effectiveness of advertising more quickly than they could by using sales as the dependent variable. Thus, social media intelligence could be an effective tool in forecasting success of marketing activities.

Second, when carrying out such analyses, analysts need to capture the variety of effects that TV advertising may have on online chatter. Based on the importance of the virality and visibility metrics, advertising seems to have a magnifying effect, suggesting that advertising accelerates the propagation of information of the brands and at the same time increases the visibility of the brands.

Third, observational data in the form of chatter metrics are readily available through social media intelligence agencies. Analysts need to fully exploit the richness of these new chatter data. Most metrics are available at an aggregate (brand or firm) level and at a high temporal frequency (e.g., daily, hourly, and in some cases by the minute).

Fourth, synthetic control can be applied for assessing the impact of other marketing interventions, such as changes in price, sales promotions, or press releases.  As in the case of this study, the purpose of doing so is to use chatter metrics as an instantaneous or live diagnostic of the performance of changes in the marketing mix. As such, analysts and managers do not have to wait for monthly or quarterly sales reports.

Gerard Tellis is Director of the Center for Global Innovation, Neely Chair of American Enterprise, and Professor of Marketing, Management & Organization at the Marshall School of Business,  University of Southern California. Seshadri Tirunillai is Assistant Professor, C.T. Bauer College of Business, University of Houston.

Related links

Social TV, Advertising, and Sales: Are Social Shows Good for Advertisers?
Beth L. Fossen and David A. Schweidel (2016) [Report]

Does Online Chatter Really Matter? Dynamics of User-generated Content and Stock Performance
Seshadri Tirunillai and Gerard J. Tellis (2011) [Report]

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