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Our objective in this paper is to assess the values of online user reviews for movies compared with the sales impact of post-release ad spending for movies. We use weekly… Click to show full abstract
Our objective in this paper is to assess the values of online user reviews for movies compared with the sales impact of post-release ad spending for movies. We use weekly box-office sales and ad spending data for 304 movies released in the U.S. along with online ratings and user characteristics from a social network site for movies. By exploiting the fixed-effects two-stage instrumental variable approach to account for movie heterogeneity and simultaneous relationships among user reviews, ad spending and sales, we found that improving the volume and valence of ratings can have the equivalent effect that ad spending can provide.
Journal Title: Information Systems Frontiers
Year Published: 2019
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