Marketing communication in the digital age: online ads, online WOM and mobile game adoptions

This study aims to explore the interdependent impacts of online word-of-mouth (WOM) and online ads on digital product adoptions, as well as their dynamic changes throughout the product life cycle.

This study adopted an empirical approach by using a unique data set of five mobile games launched between 2012 and 2014 provided by Renren Games Ltd. in China.

The results indicated that advertising generally has a positive impact on WOM. During the product life cycle, the influence on volume and variance gradually decreases, whereas the impact on valence increases over time. WOM (including WOM volume and WOM valence) and advertising both have positive impacts on game adoptions. They complement each other to shape adoptions throughout the product life cycle: advertising is more effective in encouraging adoptions in the early and later stages of the demand evolution process, whereas WOM has a greater impact on adoptions in the mid-stage.

This study provided detailed managerial recommendations on how to effectively integrate different types of marketing communication and optimize the investment strategy of online ads and online WOM in different stages of the product life cycle.

First, the study enriched the theory of digital marketing communication by studying the relationship between mass media (online ads), interpersonal media (online WOM) and product adoptions in the network context. Second, it provided an empirical basis for the inference of the dynamic development of media effect in the new product diffusion theory. Third, the results will be helpful to end the debate in current theoretical literature on whether there is a complementary or alternative relationship between the two effects. Last but not least, it enriched research on the antecedents and dynamic effects of online WOM.