Brand Buzz in the Echoverse

Kelly Hewett, William Rand, Roland T. Rust, & Harald J. van Heerde
Article Snapshot
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Key Takeaways
 

The world of brand communications has changed dramatically since 2010, social media plays an increasingly important role, and the effect of traditional advertising and public relations on steering the course of brand conversations has diminished.

Companies benefit from using social media (e.g., Twitter) for personalized customer responses, although there is still a role for traditional brand communications.

The evolving echoverse requires rethinking brand communication strategies, with online communications becoming increasingly central​.

Article Snapshots: Executive Summaries from the Journal of Marketing

This study empirically documents the existence of a reverberating echoverse for brand communication, in which there are complex feedback loops (“echoes”) between the “universe” of corporate communications, news media, and user-generated social media.



Research
The explosive growth of social media has dramatically altered the brand communications environment, and firms are trying to figure out the nature of this environment, what drives business outcomes, and what strategies work best. This study is the first to assess how a rather comprehensive set of components can influence each other and demonstrates complex feedback loops among all of them. We theorize the existence of the "echoverse" as the entire communications environment in which a brand/firm operates, with actors contributing and being influenced by one another’s actions.

Method
We test our framework in the financial services industry over the 2007-2013 period and assemble a comprehensive data set including corporate communications, news stories, social media, and business outcomes for the top four U.S. banks.


The figure illustrates the strength of the echoverse, with arrow widths reflecting the % of significant effects. For 22 of 25 arrows (or for 17 of 20 between-source arrows), there is at least one significant effect, providing clear statistical evidence for the echoverse.​

Findings
We document the echoverse and show that it has changed as online WOM has become prevalent. Over time, online WOM has fallen into a negativity spiral, with negative messages leading to greater volume, and firms adjusting their communications strategies in response. Corporate communications have moved increasingly from one-to-many to one-to-one while consumer WOM moves from one-to-one to one-to-many. Companies benefit from using social media for personalized customer responses, although there is still a role for traditional brand communications (e.g., advertising).

Implications
Managers must manage the echoverse to get desired business outcomes, which increasingly implies effectively managing online WOM (public and firm). Traditional consumer sentiment measures may be declining in relevance as online WOM becomes more important. As consumer brand communications increasingly move from one-to-one (e.g., conversations) to one-to-many (e.g., social media), communications should shift emphasis from one-to-many (e.g., advertising) to one-to-one (e.g., personalized tweets), making online marketing increasingly a brand communications centerpiece.


​Questions for the Classroom

  • How has the echoverse changed over time? That is, as social media use has grown, have relationships between the echoverse sources changed over time, with some becoming more significant and some less?
  • What is the role of traditional marketing communications tools such as advertising as opposed to social media tools in terms of influencing business outcomes?
  • What are some possible implications for managers of the asymmetries in the echoverse?


Full Article
Kelly Hewett, William Rand, Roland T. Rust, and Harald J. van Heerde (2016) Brand Buzz in the Echoverse. Journal of Marketing: May 2016, Vol. 80, No. 3, pp. 1-24.
doi: http://dx.doi.org/10.1509/jm.15.0033​


Kelly Hewett is Assistant Professor of Marketing, University of Tennessee (e-mail: khewett@utk.edu).


William Rand is Assistant Professor of Marketing and Director of the Center for Complexity in Business, Robert H. Smith School of Business, University of Maryland (e-mail: wrand@rhsmith.umd.edu).


Roland T. Rust is Distinguished University Professor and David Bruce Smith Chair in Marketing, and Executive Director of the Center for Excellence in Service and the Center for Complexity in Business, Robert H. Smith School of Business, University of Maryland (e-mail: rrust@rhsmith.umd.edu).


Harald J. van Heerde is Research Professor of Marketing and MSA Charitable Trust Chair in Marketing, Massey University, and CentER Extramural Fellow, Tilburg University (e-mail: heerde@massey.ac.nz).​​


Author Bio:

 
Kelly Hewett, William Rand, Roland T. Rust, & Harald J. van Heerde
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