RT Journal Article
SR Electronic
T1 Quantifying the Ripple: Word-of-Mouth and Advertising Effectiveness
JF Journal of Advertising Research
JO J Advert Res
FD WARC
SP 271
OP 280
DO 10.1017/S0021849904040243
VO 44
IS 3
A1 John E. Hogan
A1 Katherine N. Lemon
A1 Barak Libai
YR 2004
UL http://www.journalofadvertisingresearch.com/content/44/3/271.abstract
AB In this article the authors demonstrate how a customer lifetime value approach can provide a better assessment of advertising effectiveness that takes into account postpurchase behaviors such as word-of-mouth. Although for many advertisers word-of-mouth is viewed as an alternative to advertising, the authors show that it is possible to quantify the way in which word-of-mouth often complements and extends the effects of advertising. The authors provide a simple approach to the measurement of postpurchase word-of-mouth sales effects and demonstrate how firms may be underestimating advertising effectiveness by ignoring such effects. Their approach illustrates how customer lifetime value models can provide an important tool to assess the long-term effects of advertising campaigns.