Testimonial Advertising on Social Networks to Existing Customers and New Customers

28 Pages Posted: 7 Aug 2017

See all articles by Catherine E. Tucker

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS)

Shuyi Yu

Massachusetts Institute of Technology, Sloan School of Management

Date Written: August 4, 2017

Abstract

The use of testimonials from existing customers has always been an important technique in traditional marketing communications. However, it is not clear whether attempts by firms to promote customer testimonials in social media will be equally effective. First, often the reach of a firm on social media depends on customers explicitly opting into receiving communications from the firm. Such customers are presumably familiar with the firm, so it is not clear that further testimonials will be effective. Second, given the already social nature of communications in social media, it is not clear that adding an explicit testimonial will increase social media advertising effectiveness. This paper uses data from field experiments conducted by two gourmet food vendors. It finds evidence that while testimonial marketing can work to an existing customer base, it backfires when such communications make too-broad claims regarding representativeness.

Keywords: Online Advertising, Targeting, Facebook, Internet

JEL Classification: L86, M37

Suggested Citation

Tucker, Catherine E. and Yu, Shuyi, Testimonial Advertising on Social Networks to Existing Customers and New Customers (August 4, 2017). Available at SSRN: https://ssrn.com/abstract=3013894 or http://dx.doi.org/10.2139/ssrn.3013894

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS) ( email )

100 Main St
E62-536
Cambridge, MA 02142
United States

HOME PAGE: http://cetucker.scripts.mit.edu

Shuyi Yu (Contact Author)

Massachusetts Institute of Technology, Sloan School of Management ( email )

Cambridge, MA 02139
United States

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