Why Amazon uses both the New York Times Best Seller List and customer reviews: An empirical study of multiplier effects on product sales from multiple earned media

Abstract

a b s t r a c t Keywords: Multiplier effects of earned media Electronic word of mouth Social media Traditional media Integrated marketing communication (IMC) Digital ecosystemIn today's dynamic media landscape, products are reviewed by consumers in social media and reported by journalists in traditional media. This paper will focus on the relationship among the two types of "earned" media and product sales. Previous studies have focused on either traditional or social earned media, but rarely both. We will aim to bridge that gap using the following points of analysis: the New York Times Best Seller List as traditional media; Amazon user reviews as social media; and book purchases through Amazon as product sales. We find that: (1) both traditional and social earned media influence sales; (2) sales have a reciprocal effect on social earned media; and (3) traditional and social earned media influence each other. Communication through multiple media is known to produce the "synergy effect" in which one media activity enhances the effect of another. Our results suggest a new benefit unique to the use of multiple earned media. We call this the "multiplier effect," which occurs when one earned media activity increases the level of another by becoming a "sounding board" that amplifies positive messages, as well as a bridge that allows messages to propagate freely in an interactive media system. Therefore, multiple earned media produce combined sales effects greater than those resulting from the sum of their parts. This analysis supports Amazon's decision to use multiple earned media to benefit from an ecosystem where product sales and earned media both influence and are influenced by one another. The paper will address the implications for marketing communication and media industry.

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