Testimonial Advertising on Social Networks to Existing Customers and New Customers
28 Pages Posted: 7 Aug 2017
Date Written: August 4, 2017
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
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