A Viral Branching Model for Predicting the Spread of Electronic Word-of-Mouth

68 Pages Posted: 8 Jun 2009  

Ralf van der Lans

Hong Kong University of Science & Technology (HKUST) - Department of Marketing

G.H. van Bruggen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

J. Eliashberg

University of Pennsylvania - Marketing Department

Berend Wierenga

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: 15 2009 5,

Abstract

In a viral marketing campaign an organization develops a marketing message, and stimulates customers to forward this message to their contacts. Despite its increasing popularity, there are no models yet that help marketers to predict how many customers a viral marketing campaign will reach, and how marketers can influence this process through marketing activities. This paper develops such a model using the theory of branching processes. The proposed Viral Branching Model allows customers to participate in a viral marketing campaign by 1) opening a seeding email from the organization, 2) opening a viral email from a friend, and 3) responding to other marketing activities such as banners and offline advertising. The model parameters are estimated using individual-level data that become available in large quantities already in the early stages of viral marketing campaigns. The Viral Branching Model is applied to an actual viral marketing campaign in which over 200,000 customers participated during a six-week period. The results show that the model quickly predicts the actual reach of the campaign. In addition, the model proves to be a valuable tool to evaluate alternative what-if scenarios.

Keywords: branching processes, Markov processes, forecasting, online marketing, viral marketing, word of mouth

JEL Classification: C44, M31, M, M31, M30

Suggested Citation

van der Lans, Ralf and Bruggen, G.H. van and Eliashberg, J. and Wierenga, Berend, A Viral Branching Model for Predicting the Spread of Electronic Word-of-Mouth (15 2009 5,). ERIM Report Series Reference No. ERS-2009-029-MKT. Available at SSRN: https://ssrn.com/abstract=1414683

Ralf Van der Lans (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Marketing ( email )

Department of Marketing
Clear Water Bay, Kowloon
Hong Kong

Gerrit H. Van Bruggen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 10 408 2258 (Phone)
+31 10 408 9011 (Fax)

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Jehoshua (Josh) Eliashberg

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States

Berend Wierenga

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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