The paper applies Kalman Filtering to investigate dynamic relationship between electronic word-ofmouth (e-WOM), online advertising and offline product sales. We explore three dimensions of e-WOM: volume, valence and variation. We construct online advertising in terms of page view of online display advertisement. Using a merged, multi-sourced, time series dataset, we reveal that all aspects of e- WOM are significantly related to sales. In initial stage, e-WOM volume takes the dominant effect in driving the sales, while e-WOM valence becomes more effective later on. And more dispersed opinions lead to higher sales. However, counter-intuitively, online advertising is not significantly related to offline sales. The paper enriches our understanding of the link between online marketing and offline sales.
Yang, Cenying and Zhang, Cheng, "DYNAMIC EFFECTIVENESS OF ELECTRONIC WORD-OFMOUTH AND ONLINE DISPLAY ADVERTISING ON OFFLINE SALES" (2016). PACIS 2016 Proceedings. 367.