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Busting Myths of Electronic Word of Mouth: The Relationship between Customer Ratings and the Sales of Mobile Applications

Sami Hyrynsalmi, Marko Seppänen, Leena Aarikka-Stenroos, Arho Suominen, Jonna Järveläinen, Ville Harkke, Busting Myths of Electronic Word of Mouth: The Relationship between Customer Ratings and the Sales of Mobile Applications. Journal of Theoretical and Applied Electronic Commerce Research 10(2), 1–18, 2015.

http://dx.doi.org/10.4067/S0718-18762015000200002

Abstract:

Business and academic research frequently highlights the power of electronic word of mouth, relying on the knowledge that online customer ratings and reviews influence consumer decision making. Numerous studies in different disciplines have been conducted to examine the effectiveness of electronic word of mouth communication. Previously, typically small sample studies suggest that positive electronic word of mouth increases sales and that the effects depend on the volume and valence of reviews and ratings. This study’s contribution lies in testing the relationship between electronic word of mouth and the sales of applications in a mobile application ecosystem (Google Play) with an extensive dataset (over 260 million customer ratings; 18 months). The results show that higher values of valence of customer ratings correlate statistically significantly with higher sales. The volume of ratings correlates positively with sales in the long term but negatively in the short term. Furthermore, the relationship between electronic word of mouth and sales seems to be more important when the price of the application increases. The findings also underline the importance of the choice of a measurement period in studies.

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BibTeX entry:

@ARTICLE{jHySeAaSuJxHa15a,
  title = {Busting Myths of Electronic Word of Mouth: The Relationship between Customer Ratings and the Sales of Mobile Applications},
  author = {Hyrynsalmi, Sami and Seppänen, Marko and Aarikka-Stenroos, Leena and Suominen, Arho and Järveläinen, Jonna and Harkke, Ville},
  journal = {Journal of Theoretical and Applied Electronic Commerce Research},
  volume = {10},
  number = {2},
  pages = {1–18},
  year = {2015},
  keywords = {Products ratings, Consumer reviews, Consumer ratings, Sales, Electronic word of mouth, App stores, Micro-pricing, Big data},
  ISSN = {0718-1876},
}

Belongs to TUCS Research Unit(s): Software Development Laboratory (SwDev), UTU Information Systems Science (ISS)

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