The emergence of electronic word-of-mouth as a marketing channel for the digital marketplace

Abstract

This study investigates the contribution of electronic word-of-mouth (eWOM) to the sales of music albums. We conducted an empirical investigation of twenty-two music albums for a period of eleven consecutive weeks. eWOM was identified as an uncertainty-reducing element in consumer decision-making. Generally, the research hypotheses were partially supported using a multivariate linear regression model. We also found a stronger correlation between some eWOM channels and sales compared to other channels. eWOM has traditionally been considered an un-structured and ad-hoc source of sentiment. Our results suggest that eWOM generated in social networking when analysed appropriately is a fairly reliable predictor of market success. It is effective as a tacit suggestion, recommendation, or referral element with viral network effects. The intended contribution of this work is in identifying eWOM as a significant information contributor in the digital marketplace.