Summary for the module “Digital

Technologies and Marketing - Part 1 and 2”

for the course Business Administration 2nd
Year at The University of Amsterdam
Made by lastminutestudy.nl
This is a combination of lectures, tutorials, weekly assignments and more.

Hello. Welcome to the Digital Technologies and Marketing Part 1 Summary made by
lastminutestudy.nl 

We welcome you to the premium version of these exclusive summaries. Note, since you are a paid
member, you have received access to these summaries. Any copying, printing, screenshots or
 replication of this material is prohibited by law and if found to be distributed can and will face
consequences as per the copyright laws. 

Finally, before looking for ways to pirate this material, do note that it only costs €4.99 and by paying
for it, you are supporting the hours of effort that goes into making them. Support the creators, and let
them support you.
This summary contains week 1, 2,and 3 of Digital Technologies and Marketing. Week 4, 5, 6 and 7 are
written in the summary Digital Technologies and Marketing - Part 2.
Week 1: Lecture and Articles 9

Video 1: Digital Technologies in our Lives - Reading is optional 9

Video 2: Digital? Marketing?10

Article 1: Westerman, George (2018), "Your Company Doesn't Need a Digital Strategy," MIT Sloan Management Review
(7 pages summarized into 1) 11

Article 2: Bell, Gallino, Moreno (2018), “The store is dead - long live the store” (8 pages summarized in 1) 12

Article 3: Kannan, P. K. and Hongshuang “Alice” Li (2017), "Digital Marketing: A Framework, Review and Research
Agenda," International Journal of Research in Marketing, 34 (1), 22-45. 13

Article 4: Verhoef, Peter C., Andrew T. Stephen, P. K. Kannan, Xueming Luo, Vibhanshu Abhishek, Michelle Andrews,
Yakov Bart, Hannes Datta, Nathan Fong, Donna L. Hoffman, Mandy Mantian Hu, Tom Novak, William Rand, and Yuchi
Zhang (2017), "Consumer Connectivity in a Complex, Technology-Enabled, and Mobile-Oriented World with Smart
Products," Journal of Interactive Marketing, 40, 1-8. 16

Article 5: Texeira, Thales (2019), "Case Study: Should a Direct-to- Consumer Company Start Selling on Amazon?," Harvard
Business Review, 97, 140-43. (For seminar) (6 pages summarized in 1) 17

Week 2: Lecture and Articles 19

Video 3: Introduction Video Week 2 19

Article 4: Atasoy, Ozgun and Morewedge (2018), "Digital Goods Are Valued Less Than Physical Goods," (15 pages
summarized in 2,5) 19

Video 4: Valuation of Digital Goods 22

Article 5: Datta, Knox, Bronnenberg - 2018 - Changing Their Tune How Consumers ’ Adoption of Online Streaming Affects
Music Consumption and Discovery (18 pages summarized in 2) 22

Video 5: Digital Steaming and Consumption Patterns 25

Article 6: Barasch, Zauberman Diehl (2018). How the Intention to Share Can Undermine Enjoyment: Photo-Taking Goals
and Evaluation of Experiences (18 pages summarized in 2) 26

Video 6 Photo taking and experience enjoyment 27

Week 3: Lecture, Articles and Tutorial 28

Video 7: Introduction 28

Article 7: Packard, Grant and Jonah Berger (2017), "How Language Shapes Word of Mouth’s Impact," (17 pages
summarized in 2,5) 28

Video 8: Review value & content 30

Article 8: Stephen, Andrew (2016). The role of digital and social media marketing in consumer behaviour (5 pages
summarized in 2) 31
Article 9: Whang, Yang, Chaudhry (2018) When and How Managers’ Responses to Online Reviews Affect Subsequent
Reviews (15 pages summarized in 2,5) 32

Video 9: Manipulation, censorship, soliciting and responding 35

Video 10: Network Metrics & Social Marketing 35

Article 10: Risselada, Verhoef, Bijmolt. Indicators of opinion leadership in customer networks: self-reports and degree
centrality. (12 pages summarized in 1,5) 37

Article 11: Netzer, O., Feldman, R., Goldenberg, J., & Fresko, M. (2012). Mine your own business: Market-structure
surveillance through text mining. Marketing Science, 31(3), 521-543. 38

WEEK 4: A primer to Digital Marketing 41

Video 11: Introduction Week 4 41

Article 11: Ordenes, Grewal, Ludwig, Rutyer, Mahr, Wetzels (2019). "Cutting through content clutter: How speech and
image acts drive consumer sharing of social media brand messages." (25 pages summarized in 2,5) 41

Video 12: Brand messages 44

Article 12: Borah, Banerjee, Lin, Jain, Eisingerich (2020). "Improvised marketing interventions in social media." (23 pages
summarized in 2,5) 44

Video 13: Improvised Marketing Interventions 47

Article 13:Bleier, Colleen, Harmeling, palmatier (2019). "Creating Effective Online Customer Experiences," (22 pages
summarized in 3,5) 47

Video 14 - Part 1: Customer experience & Recommendations 50

Article 14: Gai, Klesse (2019). "Making recommendations more effective through framings: impacts of user-versus item-
based framings on recommendation click-throughs." (15 pages summarized in 2) 51

Video 14 - Part 2: Recommendations 53

Article 15: Kim, Tami, Barasz, John (2019) "Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness,"
(27 pages summarized in 2,5) 53

Video 15: Advertisements, transparency & Privacy 56

WEEK 5: The Technological Forefront 57

Video 16: Introduction Video 57

Article 16: Hildebrand, Christian (2019). The Machine Age of Marketing: How Artificial Intelligence Changes the Way
People Think, Act, and Decide (8 pages summarized in 1,5 57

Article 17: Thompson (2018, NYT): A.I. help you? (10 pages summarized in 1) 58

Video 17: The Machine Age of Marketing 59

Article 18: Longoni, Chiara, Bonezzi (2019) Resistance to Medical Artificial Intelligence (22 pages summarized in 3) 60

Video 18: Trust in AI 62

Article 19: Luo et al (2019). Frontiers Machines vs . Humans: The Impact of Artificial Intelligence Chatbot Disclosure on
Customer Purchases (12 pages summarized in) 63

Video 19: How does AI impact firm outcomes 65

Article 20: Dekimpe, Manik, Geykens, Gielens (2019. Using technology to bring online convenience to offline shopping (5
pages summarized in 1) 66

Video 20: Next Steps 67

I recommend reading the entire article summary and video summary. But, once you understand it,
mainly study the main findings for the exam. 

Week 1: Lecture and Articles 

This week consists of an introduction video, a ‘normal’ lecture video, four serious articles and one
case study article.

Video 1: Digital Technologies in our Lives - Reading is optional

This Introduction lecture highlights the importance of technologies in our daily lives.

The 4 Industrial revolutions 

1. Industry 1.0: Mechanization, stream power, weaving loom.
2. Industry 2.0: Mass production, assembly line, electrical energy.
3. Industry 3.0: Automation, computers and electronics.
4. Industry 4.0: Cyber Physical Systems, internet of things, networks (now). It is about
technology connecting everything into networks. 
Internet of Things: Everything you use in daily life (devices) form one big network. Implications are: 
1. Health: The use of sensors connected to patients, allows doctors to monitor a patient's condition
outside the hospital and in real-time. 
2. Energy: Smart meters communicate information to the consumer for greater clarity of
consumption behavior, system monitoring and customer billing.
3. Insurance: Data is collected by the driver's vehicle and analyzed by the insurer, which then uses it
to determine how much of a discount the driver is eligible to receive.

Disrupting Industries
 Streaming music: The music industry was dramatically disrupted. When the mp3 came, there was
a huge drop of sales in the entire industry. People downloaded the music for free instead of
paying for it. For 20 years it has been struggling to find new business models. Now they have
streaming devices such as spotify. 
 Uber: Total taxi industry actually increased, however the yellow taxi industry decreased, ride
hailing apps increased a lot of course. Additionally, the average permit price decreased with 82%.

Video 2: Digital? Marketing? 

This video explains what digital marketing actually means. Digital marketing is not only about selling
what you make. We will discuss four myths:
1. Marketing is about selling what you make. No, it is adding customer value. 
2. Digital requires radical disruption of the value proposition. No, it means using digital tools to
better serve the known customer needs. 
3. Digital will replace physical. No, it is a both/and. 
4. Digital is about technology. No, it is about the customer.

Myth 1: Marketing is about selling what you make

Digital marketing is not only about selling through media, it is about using technology to create more
customer value. The lecture uses the example of banks that improve customer experience and
Disney's magic wristband. 
 Marketing is the activity, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.
 Value proposition: The solution that a business provides to help customers solve a problem /
the set of benefits a business provides. 
Apple’s value proposition was technology that works properly. They updated it and added ‘your
privacy is safe with us’. Apple thus links its value proposition to a problem consumers have.

Myth 2: Digital requires radical disruption of the value proposition

Digital does not require radical disruption of the value proposition. Example, the value proposition of
Disney ‘give people a magical time’ has not changed with the magical wristband. Digital
improvement usually means using digital tools to better serve the known customer needs.

Myth 3: Digital will replace physical. 

The Retail Apocalypse: Physical stores really struggle to compete with online retailers. Looks like
complementary is not possible. 
However, Galeries Lafayette is a great example of combining online and offline by creating an
extreme luxury offline experience where people check in. Then the sales people know who they are
and adapt their sales tactics to create an ‘emotional connection’ with the customer. Other examples
are described in article 2 (example; bonobos, Amazon). → Synergy is

possible. 

Myth 4: Digital is about technology

Digital is not all about technology. Rather it is about improving customer experience. Example
Amazon’s anticipatory shipping; here they already have a good idea of what you will order, so they
already ship it to a location close to your house.
The figure shows the business model of Amazon. 
Conclusion: Digital is not a thing, but a way of doing things. Digital technologies enable doing
business differently. 
The lecture ends with an interesting podcast about WeWork, but this is not part of the exam. Key
point is the CEO is a great seller but the product adds no value.

Article 1: Westerman, George (2018), "Your Company Doesn't Need a

Digital Strategy," MIT Sloan Management Review (7 pages summarized into 1)
 Research question: How can you keep the focus on transformation, not on technology?
 Implications: Helps to prevent making mistakes such as too technology focused and keeps
you focussed on creating value. 
This article argues that when it comes to digital transformation, digital is not the answer.
Transformation is. Technology doesn’t provide value to a business, instead it makes it possible to do
business differently. By doing business in a different way, you can create value. You don’t need a
digital strategy. You need a better strategy, enabled by digital products. 

Better Strategy, Enabled by Digital: Real-World Examples

1. Paint industry: Asian Paint went from making coatings in India to multiple products in 17 countries
by a strategy of strong leadership and clear goals. This could be enabled through technologies such
as ERP software, call centers, and machine learning. 
2. Banking industry: Where most banks use chatbots to reduce costs, DBS Bank used chatbots to
create a mobile-phone-based banking model that requires no human intervention. Now they could
make money from small accounts in low-cost new markets (such as India) which other banks did
not find profitable enough. Opportunity created by strategy, enabled by technology.
3. Shipbuilding industry: Where most companies use VR to help designers visualize product designs,
Newport News Shipbuilding used VR to motivate employees (by visualizing the bigger picture they
were building), warn them when parts are too heavy to lift, and instruct them in their work.

How to Keep the Focus on Transformation, Not Technology

There are 4 things that avoid focussing on technology instead of transformation: 
1. Get away from silo thinking: Thinking in technology instead of what it enables. Silo ways of
thinking are ‘the mobile strategy’, ‘the big data strategy’, ‘the VR strategy’.
2. Don’t push the envelope too far, too fast: Act incremental. Most companies can still gain so much
from ‘older’ technologies such as mobile collaboration and ERP. Don't rush it.
3. Don’t ask your tech leaders to drive transformation alone: Work with tech leaders, not ask them
to do it alone. 
4. Build essential leadership capabilities, not just technical ones: Think of digital transformation not
as a project but as a capability. 

Article 2: Bell, Gallino, Moreno (2018), “The store is dead - long live
the store” (8 pages summarized in 1)
 Research question: What is the future of offline vs online shopping? 
 Implication: This article has implications for business models, attracting customers, and
understanding the (future) industry.

Introduction 
Legacy offline stores and next-generation online retailers are both pushed into a new kind of
shopping experience; the showroom. 
Offline is dead and dying, yet it is also alive and thriving. The bottom line of this article is that stores
are very much alive, but with a shift in focus — from fulfillment to experience-oriented.
The trend is a “zero-inventory store” with a small-footprint, where customers get a high-service,
tactile experience, purchase via tablet, and order the product shipped to a location of their choosing.
This article explains how offline-first retailers can benefit from mimicking the showroom concepts
started by online-first retailers, and why online-first retailers can benefit from opening more
traditional stores.

Supercharging Customers of Online Brands With Offline Showrooms

Supercharging: Occurs when customers are nurtured in a small-footprint location that holds no
inventory and is backed up by an operationally efficient distribution center (showroom idea). Main
benefits of supercharging; Customers who are exposed to a brand offline are more likely to:
1. Look at a wider selection of products.
2. Be more emotionally involved (immersed) in the brand experience.
3. Increase the rate and volume of following purchases.
4. Reduce returns, both offline and online.
5. Show their customer characteristics more clearly (retailer learns from customer).
Conclusion: Showroom experiences create better customers (more emotionally bonded and able to
resolve uncertainty) and create better retailers (retailers can learn from observing customers).
Example: Company Bonobos (clothing) is used as the example and possibly founder of the
supercharger idea. They also have the ‘head office showroom’ (showroom in the head office). This
helps remind the employees of who they are ultimately working for, and learns them about the non
digital attributes and footprint of their customers. 

The Quantifiable Benefits of Supercharging

This paragraph explains in certain numbers that showrooms are useful for attracting, engaging and
attaching customers. Customers who experience the brand offline (supercharged) spend more per
transaction, shop more frequently, and buy in more categories. We do not need to remember
percentages and numbers.

Offline Retailers: From Inventory to Experience

Offline-first retailers can transform stores into experience centers where customers can engage
meaningfully with the retailer, making the store not only a place to fulfill orders but also a
destination. This trend is already happening. Example: Samsung opened its flagship store where
customers can try out samsung products and have a good time. 
Offline-first retailers can learn from online-first retailers to improve customer experience by
integrating data from different channels. Example: Amazon’s book stores only display those books
that are rated four stars and above on its website.
Retailers can also generate store visits by implementing omni-channel initiatives (nudging), such as
in-store pickup of online orders. 

The Store Shrinks Into a Showroom

The average store size is decreasing over time because offline-first retailers are providing a more
intimate and experiential environment. This leads to: 
1. Reduced inventory (25% using the 20% demand uncertainty value).
2. Gross margins going up (40% using the 20% demand uncertainty value).
3. Lower fixed costs due to smaller footprint: Refers to the amount of space on a surface that
something needs.
4. Lower logistic costs (do not need to be replenished multiple times a week)
5. Redesign: Create a more welcoming and engaging environment in the showroom.
6. BUT, potential lost sales due to customers who seek instant gratification.
For a retailer wanting a 95% in-stock rate, it’s possible to lose up to 15% of sales and yet obtain the
same gross margin as that provided by using stores. This proves that showrooming is a good
strategy, even with significant loss of sales. 

Article 3: Kannan, P. K. and Hongshuang “Alice” Li (2017), "Digital

Marketing: A Framework, Review and Research Agenda,"
International Journal of Research in Marketing, 34 (1), 22-45.
 Research Question: How the developments in digital technology are re-shaping the process
and the strategy of marketing, and the implications of this transformation for research in the
broad space of “digital marketing”. 
 Implications: New categories of technologies likely to impact marketing (Personal computing
devices and technologies including mobile devices, wearable technologies (e.g., smart
watches, smart glasses), virtual reality (VR) and augmented reality (AR) technologies, mobile
apps, etc.; Computing technologies and analytical methodologies including cloud computing,
 AI, cognitive computing and deep learning, machine learning techniques, and big data
analytics; Search technologies for images, videos, voice-recognition based search, eye-
tracking technologies, and search technologies for the “dark” web; Connectivity technologies
including sensors, Internet of Things (IoT), chat technologies, new forms of platforms such as
Uber, Airbnb, etc.;), the adoption of technology and usage by customers – specifically, the
situational factors of adoption and usage (when, how, and where) and the extent of adoption
and usage.

The Framework
Digital marketing: Umbrella term describing the process of using digital technologies to acquire
customers and build customer preferences, promote brands, retain customers and increase sales.

Key Concepts:
1. The Environment
a. Consumer Behavior
 Different stages in the buying process starting with awareness, familiarity, consideration,
evaluation and purchase.
 Information search: the Internet shortens the consideration and evaluation stages of the
customer journey, and customers would have searched even longer if the Internet was
absent -> The importance of the reduced search costs and thus more efficient purchase
processes in digital environments.
 Trust is an important element that influences customers' selective information gathering and
search behavior in the digital environment.
b. Social Media & User Generated Content (UGC)
 Compared to traditional media, consumers can  share word-of-mouth information faster and
easier, not only with a few close friends but also with strangers on an extended social
network.
 eWOM = electronic Word-of-Mouth; extensively researched online reviews -> positive
relationship between eWOM and sales; less loyal customers are likely to have a greater
impact on eWOM campaigns; negative eWOM is more influential than positive eWOM,
whereas the reverse is true for observational learning; more active reviewers post lower
ratings than less active reviewers and that over time these active reviewers become the
majority of the reviewer population, which explains the declining trend of the proportion of
favorable ratings over time; negative eWOM does not always jeopardize sales, but high
variability in reviews did.
c. Platforms / Two-sided Markets
 Types:
 those that connect individual customers with other individual sellers (eBay).
 those that connect customers with a multitude of firms/sellers (Alibaba, Amazon, media
sites, and various advertising exchange networks).
 firms with firms (business-to-business platforms).
 firms with the crowd (crowdsourcing and innovation platforms like Kickstarter).
 Network effects, that is, more users/buyers will increase the number of advertisers/sellers of
the two-sided marketplace
 In a duopoly setting the media firms tend to charge more for their content than what they
would charge in a monopoly case where no competition exists. This contradicts the common
belief in the negative relationship between competition and price that the price is lower
when competition is more intense.
 Crowdsourcing platforms are another type of platform that connect firms to their customers
(the crowd) and help generate ideas for new products and services. 
d. Contextual Interactions
 3 contextual interactions:  (a) geography and location, (2) regulations on privacy and (3)
regulations against the piracy of content.
e. Search Engines
 Provide organic (natural) listings of websites as well as paid search listings in response to the
keywords that users type in.
 Customers acquired through paid searches purchase more and generate higher customer
lifetime value than customers acquired from other online or offline channels, indicating that
search engines are an effective selection mechanism to identify high-value customers. 

2. The Company
 The 4 Ps:
1. Product
2. Price
3. Promotion
4. Place
3. Outcomes
 Dimensions:
a. Value Equity
b. Brand Equity
c. Relationship Equity
d. Customer Satisfaction
e. Customer Value and its elements
f. Firm Value and its elements
4. Marketing Research
 In this section, the paper focuses on empirical research centred on understanding the digital
environment and relating the digital environment to the outcomes of marketing actions. 
 5. Marketing Strategy
 2 core elements: the Brand and its Clients
 focus on different ways in which a firm should strategically manage its brand and customers
in the ever-changing digital landscape. 

Article 4: Verhoef, Peter C., Andrew T. Stephen, P. K. Kannan, Xueming

Luo, Vibhanshu Abhishek, Michelle Andrews, Yakov Bart, Hannes
Datta, Nathan Fong, Donna L. Hoffman, Mandy Mantian Hu, Tom
Novak, William Rand, and Yuchi Zhang (2017), "Consumer
Connectivity in a Complex, Technology-Enabled, and Mobile-Oriented
World with Smart Products," Journal of Interactive Marketing, 40, 1-8.

 Research Question: the POP-framework, how People, Objects and the Physical world
interconnect with each other and how it results in an increasing amount of connected data.
 Implications: representing and understanding consumer connectivity in a world that is
increasingly global, technology-enabled, and mobile-oriented.

Introduction
Today's consumers are immersed in a vast and complex array of networks, enabled by the IoT and
technology -> the notion of “connected consumer”.
 The paper presents the POP-framework (People, Objects & the Physical world) to understand
consumer connectivity.
 The notion of omnipresent, multifaceted, and multidimensional connectivity & its
relationship with marketing value.
 Dual perspective of consumer engagements:  both the conventional perspective (a consumer
is actively engaged in the network) and an emerging perspective (a consumer is passively
engaged in the network through the IoT).

The POP Framework

Consumers connect with:

1. People (other consumers and firms' representatives)
a. Connect with others:
i. Vocally 
ii. Visually (e.g., Facetime, Skype)
 iii. Virtually (e.g., Twitter, Facebook)
b. With themselves: wearable technology (e.g., Fitbit)
2. Objects
a. In Public spaces
b. In Private spaces
Examples: people can now start their automobiles remotely, monitor their “smart” homes and give
commands to objects within the home (such as the thermostat), as well as sync information across
devices.
3. Their Physical environments. 
Examples: locating where they are in real-time in order to optimally navigate to a desired destination
(e.g., using mobile apps such as Google Maps or Waze).

Emerging technologies
Application Protocol Interface (API). 
API technologies allow for connectivity in a standardized and platform-independent way. 
Emerging Data Structures.
Traditional data sets analyzed in marketing are “flat” and have a fixed structure. Emerging Data
Structures are more complex. 
While meta-data (e.g., timestamp, transmitting and receiving device) are relatively easy to record,
the exchanged data is highly diverse; while a fitness tracker may transmit data on a user's running
speed to their favorite running app, a social network may transmit recently taken photos or video
content to a user's watch. The data structure, hence, needs to be sufficiently flexible to
accommodate these different types of data (e.g., numeric/text, photo, and video).
Example: JSON (Javascript Object Notation)

Conclusion
There are three types of connectivity:
1. People-wise
2. Object-wise
3. Physical-wise

Article 5: Texeira, Thales (2019), "Case Study: Should a Direct-to-

Consumer Company Start Selling on Amazon?," Harvard Business
Review, 97, 140-43. (For seminar) (6 pages summarized in 1)
This is not a real informative article to study. This is a case study for the tutorials. It is about Mark’s
online channel strategy. Mark is the new CMO of PedalSpark. PedalSpark is an high-end electric bike
company who is lounging a new, easy-entry, cheaper model for the price-sensitive customers. The
question is, should Mark sell the bike only at its own website, where they can control the sales
process or also through amazon, where they have a much larger reach?

Giving information to the enemy

Tamar, a college says the following to Mark “The day we put the bike on sale, Amazon will start
vacuuming up information about our customers, our margins, and the market’s potential. If it ever
decides to get into the e-bike business, we’ll have hand-delivered all the data it needs to squash us”.
She comes with an example of a friend whose tablet stand business got ‘stolen’ by Amazon. She also
says that more customers and more visibility is nice and will help us in the short term, but in the long
term, people who buy on Amazon, will they be loyal to the maker or to Amazon? 
Trying Something New
Gideon argues that delivering that many products is not an issue. You can sell products to Amazon
for it to resell, or sell the bikes and let Amazon handle the warehousing and shipping etc. He
proposes to try small, in a controlled experiment and see what happens. Furthermore he comes with
the logical arguments, increase in reach, sales, awareness etc. 

Should Pedalspark sell its new, lower-cost bike through Amazon? The Experts
Respond
Stephan Aarstol- CEO of Tower Paddle Boards and the No Middleman Project:
PedalSpark should sell on Amazon as long as it makes sense. 
1. If the margins on sales through Amazon now are good enough, they should test out the
marketplace.
2. Mark will need to keep a careful eye on how his niche evolves on Amazon and how margins
change over time.
3. When (not if) selling on Amazon isn’t profitable, he can pull the new e-bike from the platform
and offer it exclusively on PedalSpark’s site.
4. No matter what PedalSpark decides, Amazon will get enough data on e-bikes anyway and will
jump in with its own products eventually. 
5. PedalSpark could try to sell its original luxury bike on Amazon instead. May cannibalize some
sales, but the customers will associate the firm’s brand with luxury instead of cheap bikes.
6. They should use Amazon primarily to build the PedalSpark brand, with a view to driving
customers to their firm’s own site for future sales
Gil Efrati: Chief marketing officer at Nectar Sleep
Before thinking about selling on Amazon, PedalSpark has to build a brand customers recognize. If it
doesn’t do that first, its e-bikes may get lost in a sea of similar products on the site.

Tutorial
The tutorial is just a discussion and the mini challenge. The mini challenge is very easy to answer with
the summary of the article above. 

Week 2: Lecture and Articles 

This week is about consumers and digital technologies. It contains 3 articles and 4 videos. 

Video 3: Introduction Video Week 2

This video is an introduction to week 2’s topics

Effects of technology on consumers

Technology has changed basic human processing and customer behaviour. 

Example google
The fact that you can google every hard-knowledge question has fundamentally changed how we
store information in memory. When we expect a computer to store information for later retrieval,
we diminish the encoding of information and increase the memory of the location. Thus, compared
to 20 years ago, we now have less factual information, but a better developed associative network
(able to link which information belongs to what and where).

Example reviews
Device effects: The device that customers use changes its behaviour and outcome. In this example,
the device changes the actual content of the review. 
 Mobile-generated reviews are shorter, less specific and focussed on overall affect/feeling. This is
the case because mobile devices are physically constrained (typing is more intensive than on PC).
 Computer-generated reviews are longer, more specific and more rational.
 Observers perceive mobile-generated content more helpful than computer-generated content. 

Device effects: Search engine optimization - How does voice search change SEO?
If you ‘text search’ it is important for companies to be in the top ten of the google search page. But,
for ‘voice search’, it is important for companies to be in the top three of the google search page. The
development from text search towards voice search thus changes how businesses should invest in
their search engine optimization efforts. 

Article 4: Atasoy, Ozgun and Morewedge (2018), "Digital Goods Are

Valued Less Than Physical Goods," (15 pages summarized in 2,5)
 Research question: Why are similar digital goods less valued than physical goods?
 Implication: This article has implications for business models; 
o Pricing: At bol.com you clearly see that the digital version of a book is cheaper. 
o Product design: E-books are often shown on a shelf, looking like physical goods. 
o Segmentation: Experiment 4 shows the importance of customer segmentation (self-identity).
Those who strongly identify with the product, value physical products much more. Those
who do not identify with the product, do not really care if it is physical or digital.
o Piracy vs. theft: Part of the difference between the ease of piracy vs. theft comes from the
fact that people value digital goods less.

Main findings
1. All else equal, people value physical goods more than digital goods. (h1)
2. This difference in value is due to a greater capacity to garner psychological ownership. (h2)
So, psychological ownership mediates the value ascribed to physical and digital goods.
3. The view that you have a higher control over physical goods than over digital goods, underlies the
greater capacity for physical than digital goods to garner psychological ownership. (h3)
So, perceived control moderates the mediating effects of psychological ownership on the value
ascribed to physical and digital goods. 
4. Identity relevance (do I identify with the good) and expected ownership (do I expect to own it) also
moderates the greater value ascribed to physical than digital goods because it moderates the
mediating role of psychological ownership.

Introduction
This research suggests that despite the many advantages of digital goods, comparable versions of
physical goods are valued more. They show this through 5 experiments. 

Theoretical Background
Why do people prefer physical goods to digital goods?
1. Physical goods have greater social identity-signal and legacy potential than digital goods. 
2. Physical goods may be valued more due to their permanence and greater ability to serve as a
reminder of the past. Digital; unstable, quick. Physical; stable, permanent. 
3. Digital goods are less intimate and incapable of expressing personal memories.
4. Physical goods have a greater ease of establishing an emotional connection, association with
the self, or attachment.
The writers themselves claim that the physical preference is largely driven by received psychological
ownership: Feeling of ownership that comes from the ability to touch, manipulate, and move goods.
This means that physical goods should benefit more from the mere ownership effect (the value-
enhancing effects of psychological ownership) than similar digital goods. Why?
1. Manipulating and touching objects establishes perceived control. This is a key factor of
psychological ownership. 
2. The stronger the psychological ownership to the good, the stronger is the possession-self
link: Person incorporates the good into the self-concept. Because people have an unrealistic
positive perception of themselves, the good’s value (that is now linked to the self) increases.
Psychological ownership can already be established before goods are bought, so the difference in
value between physical and digital goods can already be seen at the stage of acquisition.

Hypotheses and Experiments

The figure on the right shows the general theoretical model. This graphically shows exactly what was
explained in the paragraph above. 
Digital goods are not always valued less than physical goods. There are 3 boundary conditions:
Conditions that create a boundary to the assumption that digital goods are less valued than physical
goods. So, digital goods are not valued less than physical goods when;
1. People do not expect to own or keep a good (experiment 3). Logically, because both physical
and digital psychological ownership is low when there is no ownership at all. 
2. The good is of low identity relevance to the consumer (experiment 4).
3. Individuals have a low need for external control (experiment 5). Difference in value between
digital and physical is greater for people who have a high need for control (NFC), and smaller
for people who do not have a low NFC. Logically, because less value to control leads to less
psychological ownership.

Experiment 1: PWYW for Digital and Physical souvenirs

Tourists in this field experiment paid more on average for a physical than digital souvenir
photograph. They were also asked to estimate the production cost of the photo. Cost estimates did
not differ and were not a significant predictor of the donation.
Conclusion: People value the physical good more than the digital good.

Experiment 2: Psychological Ownership as Underlying Mechanism

Here they measured psychological ownership to test whether it mediates the relationship between
product format and value. Results showed that a physical format (of harry potter book and dark night
dvd) led to stronger establishment of psychological ownership, which in turn contributed to higher

willingness to pay (WTP). 

As a rule-out explanation, they also tested if permanence and anticipated consumption enjoyment
mediated the relationship between product format and WTP, but no (not significant). 
Conclusion: Psychological ownership is the mediator between product format and WTP (see figure).

Experiment 3 and 4: Boundaries predicted by Psychological Ownership

In these experiments, they tested the boundary conditions explained above. So, whether the
psychological ownership effect is moderated by expected ownership (experiment 3) and identity
relevance (experiment 4).
Experiment 3: Moderation by Expected Ownership
Participants were willing to pay more to own a physical copy of a textbook than a digital copy of that
textbook (even though it has no resale value). However, participants were not willing to pay more to
rent a physical copy of a textbook, than a digital copy of that textbook. Ownership only increases

value and WTP for goods one expects to possess in the future. 
Conclusion: Expected ownership moderates the greater value ascribed to physical than digital goods. 
Experiment 4: Moderation by Identity Relevance
Participants who identified with Star Wars movies more than with other popular movie series
showed a higher purchase intention for a physical than digital copy of the movie. However, when the
participant did not identify with Star Wars movies, there was no significant difference in purchase
intention. Figure shows the higher the identity-relevance, the higher the difference between physical

vs digital purchase intention.

Conclusion: Identity relevance moderates the greater value ascribed to physical than digital goods
because it is an important precursor (forerunner) for the object-self association. 

Experiment 5: Need for Control as a Process Moderator

Participants with a high need for control (NFC) had a higher willingness to pay for a physical new
book than for a digital new book than participants with a low NFC. Thus, the mediating role of
psychological ownership was present for participants with a higher NFC and absent for participants
with a lower NFC.
Conclusion: Need for control moderates the greater value ascribed to physical than digital goods
because it moderates the mediating role of psychological ownership. 

Video 4: Valuation of Digital Goods

This video further explains the article summarized above.

Phases of digital transformation

There are three phases of digital transformation. Digitalization and digital transformation is
interesting from a business perspective.
1. Digitization: Encoding of analog information into a digital format, such that computers can store
processes, and transmit such information.
2. Digitalization: How IT or digital technologies can be used to alter existing business processes.
3. Digital transformation: Company-wide change that leads to the development and introduction of
new business models and logic to create and capture value.

Psychological ownership
Psychological ownership: Feeling that something is mine.
One of the first experiments on psychological ownership and valuation was the mug experiment by
kahneman in 1990. They split people in two groups. The sellers group and the buyers group. Sellers
group already received a mug and got asked to sell, buyers group did not receive, and got asked to

buy. 
As expected, once a person receives the mug (sellers group), it has a feeling of ownership, and its
price to lose the product is much higher than what they would originally buy it for (see figure). 
Endowment effect: Once you have something, you don’t want to lose it. 
Rest of the lecture video is explaining the article. I have already intertwined the little new information
of the video into the article summary.
Article 5: Datta, Knox, Bronnenberg - 2018 - Changing Their Tune How
Consumers ’ Adoption of Online Streaming Affects Music
Consumption and Discovery (18 pages summarized in 2)
 Research question: How does the adoption of music streaming affect listening / consumer
behavior?
 Implication: Streaming platforms make it easier to get into consumers’ consumption sets. But it
makes it harder to stay there. Therefore it makes it easier for small producers to get known. 

Main findings
1. Amount: Adoption of streaming leads to very large increases in quantity of consumption (+49%).
Streaming turns some DWL to surplus. 
2. Variety: Adoption of streaming leads to increases in diversity of consumption, especially in the
first months after adoption. Adoption of streaming increases new music discovery. 
3. New favorites: Repeat listening to new music decreases, but users’ best discoveries have higher
play rates. Streaming facilitates the discovery of more highly valued music. 

1. Introduction
There is a shift from ownership-based to streaming-based business models in the music industry and
other copy-right related industries. Missing from existing literature is how streaming affects
consumption at the individual level. 

2. Variety in the Music Entertainment Industry

 Ownership model: Charges a fee per variety (i.e., per song). 
 Streaming model: Charges a subscription fee for the entire catalogue.
Thus, streaming libraries dramatically lowers the acquisition cost of variety. More variety in music
can serve two purposes:
1. It can serve more consumers. More variety meets the tastes of more consumers → enhances
welfare along the extensive consumer margin. 
2. A broad selection can satisfy the demand for variety at the individual level → enhances
welfare along the intensive consumer margin.
While an ownership model has high costs of marginal variety, meaning that the demand for variety
decreases, variety actually increases with the introduction of streaming services. 

3. Data - Study design

They tested this through a collection of main user data from a large service provider (such as last.fm)
via API (Application Programming Interface) and web scraping. Through this they could check what
people listen to on all different devices and streaming services that people

used. 
They tracked 123 million plays of 4033 active users over 2,5 years. 
Treatment effects: They looked at how the adoption of streaming industries impacted what and how
much music they were listening to in the short-run (0-1 week), medium run (2-24 weeks), and long
run (>25 weeks).
Spotify is the only streaming platform mentioned since the others have neglectable market shares.
Additionally, the usage of Spotify grew while that of iTunes and other platforms declined. Thus, the
data confirms that Spotify is taking the market shares of ownership-based platforms.

5. Results
Number 4 was method, not interesting for exam.
The results can be divided into three parts; consumption growth, breadth of variety and
concentration of variety. 

5.1 Consumption Growth and Displacement

 Spotify adoption leads to strong consumption growth that persists beyond 24 weeks after
the moment of adoption. Mostly in the shortun (130%, but also in the long run (50%).
 Spotify increasingly displaces consumption from iTunes and other ownership-based
platforms
Thus, this digital technology has changed customer behaviour in that they listen to more music. 

5.2 Variety Consumption

5.2.1 Breadth of Variety
Since adopting Spotify lowers the monetary cost of the marginal variety to zero, we expect users to
consume more variety after adoption. Data (from Table 4. Adoption of Streaming Increases Breadth
of Variety) shows significant increase in all measures. These results conclude a permanent increase in
the breadth of music consumption. In the first two weeks (short-term) the number of;
 Unique artists heard increases by 62%
 Unique songs increases by 49%, 
 Unique genres increase by 43%.
5.2.2. Concentration of Variety
Superstar consumption: Mass consumption of superstars’ music.
One of the reasons that superstar consumption happens is because consumers are uncertain about
quality and ‘economize’ on learning and search costs. Spotify lowers search and learning cost, thus as
expected, the data shows that superstar consumption declines with 16% after adoption. 
Thus, the results show a reduction in variety concentration following Spotify adoption. This shift in
consumer behavior holds in the long run. Adoption of streaming reduces;
1. The consumption of common favorites (Top 100 and Top 500 artists / superstars).
2. The consumption of personal favorites (users own weekly favorite top artists and songs). 

5.3 Discovery
5.3.1 & 5.3.2 Consumption of New Content & Repeat Consumption and the Value of Discovery
Spotify adoption accelerates the rate of new variety consumption. It leads to; 
 Consuming more new artists & songs. 
 New artists & songs are (on average) not heavily played.
 But, best newly discovered songs (and artists) are consumer more than discoveries before
adoption.
Thus, streaming facilitates the discovery of more highly valued music. 

5.4 Heterogeneous Treatment Effects

We already looked at the effects of adopting spotify on general consumption, variety and discovery.
Now we look at how the effects of adopting Spotify differs across adopters.
1. Many users with low initial variety of consumption are constrained by the cost of new
discoveries, instead of low taste for new discoveries.
2. Older users discover more new content than younger users. 
3. The adoption effect on new music discovery is largely similar for free users (ad-based) and
premium users.

Video 5: Digital Steaming and Consumption Patterns 

The music industry is an industry where a true digital transformation is taking place. Digital
development has thus altered the way business is done. The figure shows the decline of the music
revenues since 2000. Only recently, the music industry is growing again due to the streaming

services. 

Sharing vs. Access economy

Sharing economy: Economic model defined as a peer-to-peer based activity of acquiring, providing,
or sharing goods and services that is often facilitated by a community-based online platform. Such as
Napster. 
Access economy: A business model that gives customers access to goods and services rather than
outright ownership. Such as Spotify. 
The sharing economy has slowly been replaced by the access economy. 

About the article

This is no additional information to the info above. However, it is graphically shown, which many
people find easier to remember, therefore it is added to the summary.

Results: total consumption & displacement

The figure below shows that overall consumption heavily increased in the short run, but even in the
long run it is still around 50% higher. Additionally it shows that consumption of iTunes and other
ownership based channels decreased. 

Results: variety; breadth

The figure shows that after the adoption of a streaming service, people start listening to more unique
artists, unique songs and unique genres. 

Article 6: Barasch, Zauberman Diehl (2018). How the Intention to

Share Can Undermine Enjoyment: Photo-Taking Goals and Evaluation
of Experiences (18 pages summarized in 2)
 Research question: Within the context of photo taking, how does the intention to share an
experience in the future, influence the enjoyment of the experience itself in the present?
 Implications: Experience oriented businesses can learn from this article to assure that the focus
stays on the experience and not on sharing photos of the experience (e.g., efteling).

Main Findings
 Relative to taking pictures for oneself (e.g., for memories), taking pictures with the intention to share
them with others (e.g., for social media) reduces enjoyment of experiences. This is the case because
the intention to share increases self-presentational concern during the experience, which can reduce
enjoyment directly and indirectly.
This effect (reduced enjoyment due to photo-sharing) is moderated by the extent to which
individuals care about how others perceive them, and the closeness of the intended audience. 

Introduction
Until now research looked at the effects of sharing after the experience has ended. This research
looks at the effects of sharing on the experience itself. 

Current Research
You can take photos for personal memory or for sharing. The study compares these two goals by
three hypotheses. Five studies test these predictions. The hypotheses are;
 Relative to taking photos for the self, taking photos with the intention to share with others will
o H1: Reduce enjoyment of an experience. 
o H2: Increase self presentational concern. 
 H3: Self-presentational concern will diminish enjoyment both directly and indirectly through
reduced engagement in the experience. 

Study 1: Photo taking at a tourist attraction

Here they surveyed tourists that were in line to take a photo with the Rocky statue.
Results: Taking photos to share is associated with lower enjoyment relative to photos for the self. 

Study 2: Experimentally examining the effect of photo goals in the field

They recruited participants for a study involving photo taking, randomly assigned them to take
photos for a self-goal or a share-goal, and examined how those goals influenced their evaluation of
their holiday photo-taking experience. Results:
 Those with a share-goal took more photos than those with a self-goal.
 Those with a share-goal were less likely to recommend the experience to a friend than those
with a self-goal.
 Memory perspective: Those with a share-goal remembered their experience more from a third-
person perspective; taking photos to share makes people consider how the event will be
evaluated by an observer. 
 Photo content: People include different types of photos in a shared album compared to a
personal album. Albums for sharing include; 
o More photos of themselves. 
o More posed and smiling photos. 
o More typical holiday items on the photos (showing details about context).

Study 3: Differential goal salience when both goals are active

Here they test whether it is the mere presence of the photo-taking goal or the salience (importance)
of the photo-taking goal during the experience that affects enjoyment. Results:
 Having primarily a sharing goal reduces enjoyment compared to having primarily a self goal. 
 Taking photos to share can also influence future behavior. Desire to repeat experience.
 Taking photos to share does not lead to greater distraction than taking photos for the self.

Study 4: Moderation by trait self-consciousness

Individual differences in self-consciousness moderates people’s enjoyment depending on their photo-
taking goal. Within those with a share-goal, high self-consciousness is related to lower enjoyment.
Study 5: The effects of sharing with different audiences
Closeness of the sharing audience moderates people’s enjoyment when sharing. Taking photos to
share with close friends makes the experience significantly more enjoyable than taking photos to
share with acquaintances, and just as enjoyable as taking photos for one’s own personal album.

This is because when the goal is to share the photos with acquaintances, people feel stronger self-
presentational concern, which leads to less engagement in the experience, leading to less enjoyment
(see model).

Video 6 Photo taking and experience enjoyment

The video starts with an example of personal quantification: Use a fitbit or smartwatch to measure
things about yourself. Research shows that wearing a step counter (mandatory or optional) increases
how many people walk. However, it reduces how much people enjoy walking. Intrinsic motivation is
reduced because wearing the step counter makes it feel like work.

Taking photos and enjoyment

 If photos increase engagement with the experience, it enhances enjoyment of the
experience. Photo taking → engagement → Joy. Taking photos of food can make you enjoy
the experience more.
 Phototaking can also make negative experiences more intensely negative. Photo taking of
negative experience → intensify experience → more negative.

Conclusion
Taking photos can increase our enjoyment of experiences - it adds to the experience. But, when the
intention is to share the photos, and in particular with people we are not really close with, self-
presentational concern increases, which reduces engagement and therefore reduces enjoyment.

Week 3: Lecture, Articles and Tutorial

This week is about social media and user-generated content. It consists of 4 articles and 4 videos. 

Video 7: Introduction 
This week is about the interplay between customers and companies on social media. 
C2C interactions: Consumer-to-consumer interactions are increasingly occurring. They happen
through discussion platforms, social media platforms, review sites etc. Why is this important? →
Social proof is powerful and omnipresent. Companies try to use them to create approval for their
products.

Article 7: Packard, Grant and Jonah Berger (2017), "How Language

Shapes Word of Mouth’s Impact," (17 pages summarized in 2,5)
 Research Question: How does the language used in word of mouth shape the impact on
consumer behaviour?
 o Might certain types of consumers be more likely to use certain types of language, affecting
whose words have more influence?
 Implications: Article learns how to persuade customers through reviews and how to interpret the
type of endorsement being made. Can be useful both as customer and as marketer. 

Main findings
Language variations influence an endorsement’s persuasive impact. Three key findings:
1. Explicit endorsements (“I recommend it”) are more persuasive and increase more purchase
intent than implicit endorsements (“I liked it,” “I enjoyed it”). This occurs because explicit
endorsement signals:
a. That the endorser likes the product more. 
b. That the endorser has more domain expertise.
2. Consumer knowledge does affect endorsement style in the opposite direction: Meaning that
novices (less knowledgeable consumers) use explicit endorsements, while experts (more
knowledgeable consumers) use implicit endorsement. Novices assume everyone will share their
taste due to loss of awareness in preference heterogeneity.
a. Thus, the novices have greater persuasion in their endorsement styles than experts. 
3. This can lead to worse decision making by recipients than without access to word of mouth
information.

Word of Mouth
Word of Mouth: Consumer-to-consumer transmission of product information.
Word-of-mouth recommendations are decision “surrogates” that helps remove less attractive
alternatives from consideration.

The Current research

Endorsement style: The language consumers use when endorsing something or declaring their
personal approval or support. There are different endorsement styles:
 Implicit endorsement: Assertion of your own personal positive opinion. How you feel toward
an attitude object (declaration of approval for yourself). I liked that hotel.
 Explicit endorsement: A speaker’s declaration that the object is appropriate for others
(declaration of approval for others). I recommend that hotel. 
Adding an implicit endorsement to positive word of mouth may have little to no effect on persuasion.
Explicit endorsement influences word-of-mouth persuasion much more for two reasons: 
1. The endorser seems to like the product more. 
2. The endorser seems to be more knowledgeable. 

Consumer Knowledge and Endorsement Styles

Paradoxically, novices (less knowledgeable consumers) especially use explicit endorsements. Experts
(more knowledgeable consumers) use less explicit endorsement and more implicit endorsement.
Why?
1. Greater consumer knowledge leads to greater awareness of product heterogeneity. Learn about
different wines → be aware of the difference between merlot, malbec, cabernet etc. 
2. Greater awareness of product heterogeneity leads to greater awareness of preference
heterogeneity. Understand that someone else likes a merlot, while you like a malbec. 
3. Therefore, awareness of preference heterogeneity should decrease consumers’ tendency to
explicitly endorse. Decrease tendency to say I recommend Malbec to everyone, it is the best wine,
because you understand that everyone has different tastes.
 Preference Heterogeneity: The diversity of consumer needs and wants.

Empirical investigation
Five studies test these predictions.

Study 1: Do less knowledgeable people tend to recommend?

This study analyzed >1000 book reviews and shows support that less experienced buyers are more
likely to use explicit endorsements (recommendations). See figure.

Study 2: Why less knowledgeable people tend to recommend

In study 2 participants were asked to imagine browsing through a travel website and coming across a
hotel where they had recently stayed and had a positive experience. It had four goals;

1. It tests the relationship between category knowledge and endorsement style in a more controlled
experimental setting. → Result: Relationship stays the same as in study 1 (novices use more
recommendations).
2. Examines the hypothesized underlying process. → Result: Reminding participants that people’s
category preferences differ, had no effect on experts, but led novices to avoid explicit
recommendations. See figure. 
3. It tests whether the results still hold when consumer knowledge is based on expertise rather than
experience. → Result: Yes still holds.
4. It tests whether any of 5 alternative explanations can mediate the effect. → Result: No support for
the following other explanations:
 a. Self-enhancement: Novices make recommendations to look smart/good to others.
b. Signaling cost of bad recommendations: Experts don't make recommendations for
the risk of ruining their reputation.
c. Confidence: Experts know that they don’t know stuff, therefore have lower
confidence, thus avoid recommendations. 
d. Attitudes toward the hotel: Novices were more likely to use explicit endorsements
because they imagined the hotel was better, leading to more recommendations. 
e. Altruism: Experts avoid recommendations because they believe that sharing their
personal attitudes toward products (i.e., an implicit endorsement) is more helpful. 

Study 3: How explicit endorsement influence persuasion

Here all participants imagined a friend who went to a restaurant and responded with one of three
endorsement styles: none, implicit, explicit. Results: 
 Participants who received explicit endorsement thought they would like the product more, and
were more willing to choose it, compared to no endorsement or implicit endorsement.
 This was mediated by perceptions of the endorser’s expertise and attitude toward the product. 
 Experts and novices are equally convinced by explicit endorsements. 
Conclusion: Although less knowledgeable consumers are more likely to recommend products
(Studies 1 and 2), word-of-mouth recipients believe such explicit endorsements are linked to greater
expertise (which increases the persuasive impact of recommendations).

Study 4: How Consumer Knowledge Influences Choice and Endorsement Style

Here participants chose between superior and inferior wine (according to a pretest) and decided
what to say to others about the wine they chose.
Results: Category knowledge was negatively related to choice meaning that novices that lacked
domain knowledge, more often chose inferior options and explicitly endorsed their choice to others. 

Study 5: Consequences for word-of-mouth recipients

Here they examined how the relationship between the sender’s category knowledge, product choice,
and endorsement style influences the choices of word-of-mouth recipients. Participants were given
the wine information from Study 4 and asked which wine they preferred. In addition, half the
participants were given access to word-of-mouth information before making their choice. 
Results: The combination of novices’ inferior choice and their explicit endorsement meant that
access to word-of-mouth information led recipients to make worse choices than they would have
made otherwise. 

Video 8: Review value & content

This video is about the value of reviews and their content. In general there is a positive and
significant effect of worth of mouth information and sales. However, the size of the effect differs per
platform. Online reviews can also be used to get a better insight in the market and competitors. 

How much should marketers focus on consumer reviews?

The power of other people’s views varies from one product category to another. From O-
independent to O-dependent (O stands for others’ opinions); 
1. Low-involvement habitual purchases (such as milk)
2. Luxury goods: Appeal to buyers’ emotions rather than their sense of utility.
3. Chain restaurant: Users know what to expect, so not really turn to reviews
4. Non Luxury car: Consumers conduct extensive research, but also rely on brands’ reputation.
5. Independent restaurants: Consumers often rely on food critics or on sites such as yelp.
6. Electronics: Buyers listen to previous adopters before taking a chance on a less-known brand.
 Rest of the video is an explanation of the article with no new information.

Article 8: Stephen, Andrew (2016). The role of digital and social media
marketing in consumer behaviour (5 pages summarized in 2)
This article reviews 39 other recently published research. I have mentioned the author of each
research, but i don't expect that you need to know these by heart. However, sometimes it helps to
recognize the author in an exam question to its content. 
 Research question: What is the role of digital and social media marketing in consumer behaviour?
 Implications: Article helps marketers to steer their digital and social media marketing. 

Main findings
There is no main finding, the article summarizes the findings of 39 articles (a lot of info). 

Research themes and findings

Five distinct research themes are covered by the recent consumer research on digital marketing and
social media: 1) Consumer digital culture, 2) Advertising, 3) Impacts of digital environments, 4)
Mobile, 5) Online WOM and reviews (most popular theme). 

1. Consumer digital culture

Consumer digital culture research: Considers the digital environments in which consumers are
situated.
 Consumers can have multiple selves (personas) because multiple platforms online allow multiple
persona’s (Belk).
 The megaphone effect: The ability for regular consumers to access large audiences through
digital/social media (McQuarrie et al.).

2. Advertising
Ad retargeting: When personalized recommendations based on prior web-browsing history are made
when a consumer returns to a website.
 Negative reactions to personalization can be overcome with normative reciprocity appeals instead
of utility appeals (Schumann et al.).
 The negative responses to retargeting are mitigated when consumers’ preferences have become
more refined and when consumers have more perceived control over the ad (Lambrecht &
Tucker). 
 Social influence drives popularity (luo et al.).
 When consumers search for less-popular keywords their searches are more effortful (Jerath et
al.).
 Consumers with deactivating emotions don't like energetic ads (Puccinelli et al).
 Digital ads are more effective than offline ads in driving online behavior (Dinner et al.). 
 Annoying (obtrusive, low quality) website ads create economic costs for advertising and cognitive
costs for consumers (Goldstein et al). 

3. Impacts of digital environments

Digital/social media environments impact consumer behaviour in two ways:
1. Environment-integral: Digital environments influence behaviour in those environments. 
a. Learning from others in digital environments can affect individuals’ decisions in those
environments (Lamberton & Norton et al.).
2. Environment-incidental: Digital environments influence behaviour in other, unrelated
environments.
 a. How facebook influences self-control: When exposed to closer friends on Facebook,
consumers show lower self-control in choices such as healthy behaviors (Wilcox & Stephen).

4. Mobile
 In an offline in-store setting, mobile coupons can change paths consumers take (Hui et al.).
 In an online shopping setting, touching products (with tablet or phone instead of clicking with a
mouse) can increase feelings of psychological ownership and endowment (Brasel & Gips).
 In many product categories mobile display ads have no effect (due to their small size and lack of
information), but they do lift attitudes and intentions for high-involvement, utilitarian products
(Bart et al.). 

5. Online WOM and reviews

1. How influential reviews hcan depend on subtle language-based properties.
a. Figurative language in online reviews positively affected consumer attitudes and choice for
hedonic goods (Kronrod & Danziger).
b. Explaining the actions and reactions affected perceived review helpfulness (Moore).
c. Using softening language when conveying negative opinions increases perceived reviewer
credibility and likability (Hamilton et al.). 
d. Neutral WOM strengthens the direct effects of positive and negative WOM on purchasing if it
is mixed (Both positive and negative) (Tang et al.)
e. If a review’s linguistic style is consistent with the typical linguistic style used for that product
group, then positive affect increases conversions and negative affect decreases conversions
(Ludwig et al.).
f. Temporary contiguity cues in language reduce consumer bias toward positive reviews (e.g.,
the discounting of positive opinions) and increase review value.(Chen and Lurie.).
2. The differences between online and offline WOM.
a. Online WOM is driven by social and functional brand characteristics whereas offline
WOM is driven by emotional brand characteristics (Lovett et al.).
b. Consumers are less inclined to transmit WOM in social media then in real life
because of a higher perceived social risk (Eisingerich et al.).
3. Other online WOM-related issues
a. Whether online reviews provide a good or bad forecast of consumer brand enjoyment
depends on how similar reviewer’s and consumer’s preferences are. (He & Bond).
b. Susceptibility to social influence is related to brain regions involved with shifting personal
preferences and considering others (Cascio et al.).
c. Fake reviews are not limited to competitors but also include existing customers with no
financial incentive to bias online ratings (Anderson & Simester).
d. People share ‘other focussed’ information when narrowcasting (close friends), but share ‘self
focussed’ information when broadcasting (massive audience) (Barasch and Berger).

Recommendations for future research

Future research should expand more towards other consumers’ behaviours than WOM/reviews. 

Article 9: Whang, Yang, Chaudhry (2018) When and How Managers’

Responses to Online Reviews Affect Subsequent Reviews (15 pages summarized
in 2,5)
 Research Question: What is the effect of publicly responding to reviews on subsequent reviewer
ratings? 
 Implications: Article helps managers in how and when to respond to customer reviews to
influence future eWOM. This could improve reputation management strategies, especially in
markets that are reliant on eWOM (such as the hotel industry). 
Main Findings
1. The fact that you can view Managers Responses (MR) while customers write reviews, creates on
average higher reviews than when customers cannot view MR while writing reviews.
2. However, the timing that causes classification into observable or unobservable groups does not
explain the MR-N or MR-P findings. 
3. MR-N has a positive externality on subsequent ratings: Manager responses to negative reviews
(MR-N) can positively influence subsequent opinion. It is viewed as complaint management. 
4. MR-P has a negative externality on subsequent ratings: Manager responses to positive reviews
(MR-P) can negatively influence subsequent opinion. It is viewed as bragging/promoting.

Introduction
Although an MR is directed at an individual reviewer, its public nature leads to the possibility of
creating an externality on the opinions of subsequent reviewers. Thus, the practice of MR can change
the trajectory of a firm’s online reputation. They demonstrate that MR tailoring is a moderator that
magnifies the divergent effects of MR-N and MR-P.

Literature Review
Managing Customer Satisfaction
Complaint management has a positive impact on satisfaction, repurchase intent and economic
outcomes when showing warmth and gratitude in service. However, when firms’ affactive delivery is
perceived to be disingenuous (shallow acting), customers’ affect towards the firm can be negatively
influenced.

eWOM Intervention
A previous study found that firms’ responses to complaints on Twitter encourage future complaints
However, this study differs from the current one in two important ways: 
1. Because Twitter complaints are directed at the firm, there is an expectation of response. This
diminishes concerns regarding the motivations behind the MR (because there is a need to
respond, there is less chance of self promoting).
2. Ma & Sun only tested MR-N, not MR-P.
In another previous research, they found that hotels’ responses to negative reviews increase
subsequent ratings by the same customer. However, other negative customers who see their peers
receiving an MR, but don’t receive one themselves, rate the hotel worse in subsequent reviews.
The current researchers argue that MR-N is viewed as adding value, which is consistent with the
social exchange theory. But that MR-P is viewed as promotional activity, which is consistent with the
reactance theory. This can explain the conflicting treatment effects found in previous research.

Causal Inference in Observational Studies

The endogeneity issue: Any changes in ratings can be due to investments in product or service
quality instead of MRs.
You can resolve this by using a difference-in-differences strategy: Compare reviews of an
organization on sites that have MRs (treatment) with sites that don’t have MRs (control). 
This research uses a difference-in-differences analysis with treatment on TripAdvisor (here posted
MRs are observable), and control on booking sites (here posted MRs are unobservable). 

Results
Effects of Responding: Difference-in-Difference across Sites
Initiating MR increases hotel ratings on Trip-advisor. But, no increased ratings were found on other
booking sites. Thus, the fact that you can view MR while writing your review, creates higher reviews. 
 Effects of Responding: Observability Within Tripadvisor
We now know that whether or not you can view MR is important for the score of the review. We will
now look within a Tripadvisor setting (so where you can normally view reviews) if this effect is the
explanation for the MR-P and MR-N findings or not. 
Model-Free Evidence of Divergent Effects of MR-N and MR-P
We do this by looking at the timing of MR. Observable MRs are posted before the writing of the focal
review, whereas unobservable MRs are posted after the focal review.
Result: The timing that causes classification into observable or unobservable groups does not explain
the MR-N or MR-P findings.
Identifying Main Effects of MR-N and MR-P Using Observability
Next they looked at data from reviews that were posted right after an MR (meaning that consumers
had to see the MR), and looked at a control group of reviews right before an MR (meaning that
consumers couldn't see the MR). This led to the following results:  
 MR-N has a positive externality on subsequent ratings. 
o MR-Ns with more tailoring (good fit with individual customers) led to higher quality complaint
management. → Increased the externality on subsequent ratings. 
 MR-P has a negative externality on subsequent ratings. 
o MR-Ps with more tailoring led to greater likelihood of reactance. → Increased magnitude of
the MR-P externality on subsequent ratings (only make things worse).

Effects of Response Tailoring Within Tripadvisor

Response tailoring: The practice of customizing MR to the contents of its corresponding review.
Response tailoring to MR-Ns
1. Managers should engage in MR primarily for the purpose of complaint management.
2. MR-Ns should be timely so that they are visible to subsequent reviewers. 
3. Managers should customize MR-Ns to each review.
Response tailoring to MR-Ps
Managers can mitigate the negative effects on subsequent ratings if;
1. They wait for positive reviews to be buried behind newer reviews before responding. By doing
this, managers can obtain direct positive effects for thanking a reviewer without negatively
influencing subsequent reviews.
2. They limit the customization of MR-Ps to minimize the negative externality on subsequent ratings.

Discussion
Implications for practice
Are chains or independent operators more sensitive to opinion externalities generated by MR-Ns and
MR-Ps?
Independent businesses have been shown to rely more on eWOM than chain businesses. Therefore,
independent hotels’ active intervention in online review platforms is more likely to be perceived as
normative behavior. Thus, independent hotels should be less affected by MR activity because
customers would not find it unexpected that an independent operator cares more about its online
reputation. 
Chain hotels can better affect their reputation by following the recommendations above about when
and how to respond. 

Conclusion
 Responding to an online review as a manager, pays off when you’re responding to a negative review.
Responding to positive reviews, can appear very self promoting and does not really add to the
conversation. Yet, it still works for small-businesses, especially hotels, since people already expect
this to happen. 

Video 9: Manipulation, censorship, soliciting and responding

How can companies influence reviews? 

Fake reviews and censorship

 How large is this issue? →  16% of the reviews on Yelp are filtered/fake. 5% of the reviews are
without actual purchase. 
 Who does it? → Weak brands and independent (vs. chain) hotels are more likely to engage in
review fraud.
 Is it only an issue in certain countries? → No, for example, nu.nl censors the comment section to
an extreme. Questionable if this is censorship or moderation. 
 How helpful is incentivizing customer reviews? Research shows that this is not really useful, you
will get alot of reviews, however these are not viewed as very helpful. 
o Soliciting reviews might be a double-edged sword as solicited reviews are more positive,
but less helpful and of lower quality. 

More about Article 10: When and How Managers’ Responses to Online Reviews
Affect Subsequent Reviews
This is mostly the same information, but mentioned in a very concise, clear way.
1. Should you respond to customer reviews? How does this influence future ratings? → In general, there
is a positive effect between MR and future ratings. This effect is a little higher if you respond sooner,
than later. 
2. If yes, how? Which types of reviews (positive vs. negative) should you respond to? →
a. Effect of MR is positive for responses to negative reviews → bolsters the companies’ complaint
management strategy in the perception of the customer.
b. Effect of MR is negative for responses to positive reviews → taking advantage of the positive
feedback to promote their brand? 
3. Should you customize/tailor your reply? → Tailor to the positive review feels like self-promotion.
Tailor to the negative review feels like addressing the problem specifically. 
4. For which types of firms does this strategy work best? → For chains it is more valuable to adopt these
results/tips. 

Video 10: Network Metrics & Social Marketing

This video is about network, network metrics and social media marketing. It serves as an introduction
to the following paper (article 10).
Firms want to leverage certain social media because some users can be really popular and influence
other consumers. So, firms want to target certain popular people, these people then influence many

others.

Social contagion
Connections among consumers can affect how information and behaviour spreads.
The Bass model explains adoption through innovators and imitators (see figure). The imitators are

the social contagion part.  

Networks
 Identify influential customers for targeted/viral marketing. 
 Which individual to target?
 Which type of network is better for spreading information?

Degree centrality
 Degree centrality: The number of others with whom a customer has a relationship. In the figure,

person B has the highest degree centrality. 

 Degree mean: Average degree centrality. In the figure it is 2 because (1+3+2+2+2)/5 = 2.
 Density: How many links are there compared to all possible links. In the figure there are 10 links
and there are (5*4) 20 links possible. Thus a 50% density. 
 A higher degree mean or higher density means a more integrated network with better
relationships among each other. 
 Degree variance: Measurements of how similar the consumers are. When comparing both
figures, we see that both networks have a mean degree of 2. However, the top figure has low
degree variance (0.4), while the bottom has a high degree variance

(0.8). 
 Distance: The shortest path from one individual to the next. Think about the small-world
experiment of Milgram (6 degrees of separation). 
 Distance on Facebook: In the digital era, you can connect to most people in five links or less.

World is becoming smaller. 

Homophily
Homophily: Degree to which customers in a network have similar characteristics (age, gender,
income, race). Individuals tend to be friends with similar individuals. 

Which networks are better? 

1. A higher average degree (density) means more diffusion or contagion →  Networks have more
connections through which information can spread. 
2. A higher degree variance means more diffusion or contagion → Highly connected individuals can
serve as hubs that can facilitate spreading of information. 
3. Homophily can be a double-edged sword: 
a. Can easily spread within a group. 

b. More difficult to spread between groups.

Tie strength
Tie strength: Measurement of the strength of a relationship. Some opinions matter more than others
(e.g., best friend vs. acquaintance).  Here asymmetry is possible: A has a strong influence on B, but
not vice versa. I feel strongly connected to influencer A, but he/she is not influenced by me. 

Article 10: Risselada, Verhoef, Bijmolt. Indicators of opinion

leadership in customer networks: self-reports and degree centrality.
(12 pages summarized in 1,5)
 Research question: Can you use degree centrality or self-report metrics to improve adoption of
your product? 
o What characterizes opinion leadership or disproportionate social influence?
 Implications: Marketers that aim to exploit opinion leadership for social marketing purposes can
use this article because it shows indicators of opinion leadership. 

Main Findings
1. There is a significant positive simple effect of degree centrality on actual opinion leadership.
2.  There is no significant simple effect of self-reported opinion leadership on actual opinion
leadership when tie strength is low to moderate. 
 3. There is a significant effect of self-reported opinion leadership on actual opinion leadership
when tie strength is high. This is due to over self-confidence instead of actual opinion
leadership.

Introduction
In this research the dependent variable is ‘adoptance of a smartphone’ and the independent variable
is ‘degree centrality & self-reported opinion leadership’. They investigate opinion leadership in the
mobile telecom industry. They used three sources of data: call detail records (CDR), a customer
database, and an online survey.
This way they know which people are connected, and how strong their ties are (by measuring the
number and size of phone calls and text messages). The survey is used to measure self-reported
opinion leadership. 
There are two types of indicators of opinion leadership suitable for large customer networks:
1. Objective measures based on network characteristics (e.g., degree centrality).
2. Subjective measures based on self-reports. Useful when no data on degree centrality, but
unsure if it is reliable enough?
It is unclear to what extent self-reported opinion leadership is an indicator of opinion leadership over
and above the network characteristics. Furthermore it is unclear how these indicators and the
consumer’s position in the network jointly indicate opinion leadership. This study researches this.

Theoretical background
Indicators of opinion leadership
 Opinion leaders: Consumers that exert a disproportionate influence on those around them
(influencers).
 Degree centrality: The number of others with whom a customer has a relationship.
 Tie: Strength of the relationship based on reciprocal contact between two individuals. 

The social network environment

They also account for the effects of social network variables including; 1) awareness and belief
updating, and 2) homophily:  People tend to associate with others like them.

Data
The figure (above) shows that for low values of self-reported opinion leadership, degree centrality is
also low, but that for larger values of self reported opinion leadership it becomes less diagnostic for
degree centrality. 

Results
 Effects of self-reported opinion leadership and degree centrality.

 Clear positive effect of degree centrality. So, if a person has more connections (larger ego network),
it has a lot of influence on the single consumer adopting the smartphone. 
o Thus, degree centrality is a good metric to use, and you might want to target people with a
high degree centrality. 
 Not a clear effect of self-reported opinion leadership for tie strength. There is only an effect of self-
reported opinion leadership when the tie is very strong (see black line in figure). 
o So, not an ideal metric, but when nothing is available, it can be useful. 

Interactions with tie strength

1. There is a Significant and positive effect of tie strength. This implies that social influence is greater
over stronger relationships.
2. Tie strength does moderate the effect of self-reported opinion leadership on actual opinion
leadership. But does not moderate the effect of degree centrality on actual leadership. 

Article 11: Netzer, O., Feldman, R., Goldenberg, J., & Fresko, M.
(2012). Mine your own business: Market-structure surveillance
through text mining. Marketing Science, 31(3), 521-543.
 Research Question: Proposes an approach for firms to explore online user-generated
content and “listen” to what customers write about their and their competitors’ products.
 Implications: In using a text-mining apparatus such as the one described here, firms can
monitor their market position over time at a higher resolution and often lower cost relative
to traditional data sources.

Introduction
By observing what consumers write about products in a category, firms could, in principle, gain a
better understanding of the online discussion and the marketing opportunities, the market structure,
the competitive landscape, and the features of their own and their competitors’ products that
consumers discuss.
The study uses a text-mining apparatus and a network analysis framework to utilize the large-scale,
consumer generated data posted on the Web to allow firms to understand consumers’ top-of-mind
associative network of products and the implied market structure insights.

Market Structure and Mining Customer-Generated Content

  Increased level of activity in online communication channels (forums, blogs, product reviews,
etc.)
 Text mining (sometimes called “knowledge discovery” in text) refers to the process of
extracting useful, meaningful, and nontrivial information from unstructured text
 The paper focuses on utilizing text mining to assess market structure ( extracting, analyzing,
and visualizing information about a large number of entities, then use that information to
establish relationships between the entities and make comparisons between them to derive
brand-associative networks and the market structure) 

The Text-Mining Apparatus

How does it work?
1. Step 1. Downloading: The Web pages are downloaded from a given forum site in HTML
format. 
2. Step 2. Cleaning: HTML tags and nontextual information such as images and commercials are
cleaned from the downloaded files. 
3. Step 3. Information extraction: Terms for products and product attributes are extracted from
the messages. 
4. Step 4. Chunking: The text is divided into informative units such as threads, messages, and
sentences. 
5. Step 5. Identification of semantic relationships: Two forms of product comparisons are
computed: a semantic network of co-occurrences of product mentions in the forum and the
relationship between products and terms and the nature and sentiment of the relationship. 

Methodology & Results

Study 1: Sedan Automobile Forum
Data: 868,174 consumer messages consisting of nearly 6 million sentences posted by 76,587 unique
consumers between the years 2001 and 2007.
Results:
3 large clusters:
1. economy-class compact cars (e.g., Toyota’s Corolla, Echo, Matrix, and Yaris).
2. family cars (e.g., Toyota Camry and Toyota Avalon).
3.  cars that belong predominantly to the luxury market (e.g., the Lexus models).
Study 2: Diabetes Drug Forums
Data:  the entire forum discussions from five of the largest diabetes drug forums;  more than 670,000
messages (more than 5 million sentences).
Results:
 The severity of an ADR seems to influence the mention of that ADR in the forum more than
does its frequency. An ADR is an“adverse drug reaction” (ADR), which is medical damage
caused by taking a given medication at a normal dose. An ADR is more commonly referred to
as a “side effect”; however, side effects can be both negative and positive, whereas ADRs
refer only to negative effects.
 Tool to prioritise ADRs that patients seem to be most concerned with.
 Seven ADRs that were frequently mentioned in the forums but not reported in WebMD:
weight gain (Amaryl), cold symptoms (Byetta), kidney problems (Humalog), mood problems
(Lantus), anxiety problems (Levemir), sleeping problems (Levemir), and bloated feeling
(Symlin). Patients’ mentions of these ADRs in the forums should, at the very least, raise a flag
for health officials to track these possible drug reactions. 
  Several of the ADRs not reported in WebMD are “softer” ADRs, such as mood problems,
anxiety problems, sleeping problems, and cold symptoms, that may not be considered
medically serious but are reactions to which patients are sensitive. Although a patient may
be mistaken in associating her psychological condition with a particular drug, pharmaceutical
firms should be aware of such common misattributions in marketing their drugs.

Limitations:
 Text mining is a more descriptive tool (rather than predictive).
 Views posted on forums may be biased because respondents aim for their views to be
publicly available on the Web and because of online herding behavior.

WEEK 4: A primer to Digital Marketing

This week consists of five articles and five videos. It is a lot of information.

Video 11: Introduction Week 4

This week we will look at a primer to digital marketing. More specifically we will look at different
media a firm can use to influence sales, affection, awareness etc. 

Paid, Owned, Earned Media (POEM)

The POEM framework binds the material of these articles and lectures together. Every type of these
3 cost money (not only paid media).

Article 11: Ordenes, Grewal, Ludwig, Rutyer, Mahr, Wetzels (2019). "Cutting
through content clutter: How speech and image acts drive consumer sharing of
social media brand messages." (25 pages summarized in 2,5)
 Research Question: What, how, and when do brand messages stand out and prompt sharing by
consumers?
 Implications: This article explains brand message sharing by consumers and offers guidance to
managers for developing more effective conversational strategies in social media marketing.

Main Findings
1. Consumers share significantly more expressive and assertive messages than directive ones.
2. Complementary sequences have a stronger positive effect on consumer sharing than consistent
ones.
3. The use of rhetorical styles (alliteration and repetitions) and complementary cross-message
compositions enhance consumer message sharing. 
4. The presence of visuals (image acts) increase message sharing. 
a. Consumers share messages less when the messages contain images that are more
action- than information-oriented for directive messages (don’t do a double call to
action).
b. Presence of readable text in images increases sharing. 

Introduction
Social media platforms replace traditional marketing channels. However, the impact of brands on
consumers stays distressingly low. Call-to-action messages even lead to decreasing engagement.
Therefore, it is critical to determine how to use available verbal and image elements effectively to
compose dynamic messages that encourage consumer sharing on social media.
This research first looks at the impact of assertive, expressive and directive acts on C2C sharing.
Secondly it looks at the link between rhetoric and the three speech acts. Third, it looks at how cross-
message dynamics influence sharing. Fourth, it looks at how image acts extend the SAT.

Conceptual Background
Speech Act Theory (SAT): The premise that any utterance represents an action intended to evoke
some behavior in the recipient.
Speech acts: Offer means to convey people’s intentions. Through their performative function, they
can also invoke behavioral changes in message recipients. There are five forms of speech acts.
In social media context, content marketers try to provide;
1. Assertive acts: Objective information (true/false). “We have launched a new product” 
2. Expressive acts: Arouse consumer’s emotions through appreciation, opinion, or evoking desires
for something. “Thanks for your commitment, We love fridays, What an amazing product” 
3. Directive acts: Call them to action or demand information. “Come to our sale, What do you think
of our product?”
In social media context, content marketers don’t really use;
4. Commissive acts: Create a future obligation, so providers might issue them in response to a
request. “I promise to deliver”.
5. Declarational acts: Involve unilateral decisions, with direct consequences for the recipient. “You
are fired”.
There is an evolutionary development from classifying phrases and sentences (assertive, expressive,
directive) to integrating rhetoric, intertextual media acts and image acts. 
 Rhetoric acts: The persuasive effect of message intentions.
More specifically, rhetoric means stylistic forms of message constructions that intend to influence
receivers’ perceptions through persuasive viewpoints. Two of these forms are alliterations and
word repetitions. These can enhance message fluency, memorability, and overall persuasiveness. 
o Alliteration: The repetition of initial sounds in subsequent words. Common in brand names,
slogans, and advertisements. E.g., American Airlines, “big beefy bliss” - McDonalds
o Word repetition: The repetition of words in a brand message. Enhances the emphasis and
memorability of the content of the message. “Have a Break, Have a Kit-Kat”
 Cross message dynamics: Can be designed to enhance individual persuasive effects when viewed
as continuous interactive streams. Two types;
o Complementary: Communicate varied intentions.
o Consistent: Repeat the same type of intention.
 Image acts: Can persuade customers to act or buy. Two types; 
 o Information image: Provides information about a product.
o Action: Shows a person in action, some action is happening in the picture.

Study
To examine the differential effects of brand message intentions, style, and sequences on message
sharing, they collected data sets from two leading social media platforms, Facebook and Twitter.
Twitter allows for only 140 characters per message, Facebook does not restrict this.

Results, Reasons and Implications for Managers

1. Consumers share significantly more expressive and assertive messages than directive ones. (H1)
a. Because directive messages signal dominance, are more conclusive (no room for ambiguity and
discussion), do not facilitate conversations. Assertive ad expressive messages are not dominant,
not conclusive, require less processing and do facilitate conversations.
b. However, on Facebook there was not a more positive effect of assertive compared to direct
messages (maybe because Facebook is perceived as an emotional social network). 
c. Implication: Managers who want their brand content to be shared by consumers need to use
messages that facilitate, rather than dictate, consumers’ social interactions online.
RQ1: Does the joint impact of speech acts and rhetoric on message sharing differ across speech
acts (assertive, expressive, directive), figures of speech (alliteration, repetition), or social media
platforms (Twitter, Facebook)?
Word Repetition;
 On Facebook, word repetition leads to a more negative interaction effect with assertive and
expressive than with directive messages.
 On Twitter, word repetition leads to a more positive interaction effect with assertive and
expressive than with directive messages.
Alliteration;
 On Twitter, alliteration has a positive interaction with assertive and expressive messages.
 On Facebook, alliterations have a more positive effect when combined with expressive than
with directive messages, but not with assertive messages.
These results highlight the differences between the more fluent effects of repetition and the more
subtle effects of alliteration.

2. Complementary sequences have a stronger positive effect on consumer sharing than consistent
ones. (H2)
Because people get bored by the same type of message over and over again.
3. Consumers share messages less when the messages contain images that are more action- than
information-oriented. (H3)
Because direct images signal dominance, conclusiveness and do not facilitate conversation (same as
with written messages).
4. There is an interaction effect between message intentions at the text and image levels.
Images portraying a greater degree of action are more shared in combination with an assertive or
expressive speech act, rather than in combination with a directive speech act. Because
complementary messages lead to more sharing than consistency messages (same logic as h2).
Additionally, the presence of readable text in social media images increases message sharing. 
5. Control Variables
Among the control variables, message positivity has a positive significant relationship with consumer
message sharing on Facebook but not significant on Twitter.

Video 12: Brand messages

This video is about article 12 concerning brand messages and brand content. In the POEM model, this
includes interaction between earned media (shared) and firm property (social media channels). 

Crafting compelling brand messages

 The article leverages insights from the Speech Act Theory (SAT) and apply this to social media. 
 Speech expression: An action intended to evoke some behavior in the recipient.
 Additionally they combine this with a focus on; rhetorical acts, cross-message dynamics and
image acts.

Results
No new information, just the same results in a simplified version. The results show;
 Assertive and expressive messages (vs. directive) had a higher share effect on twitter.
 Expressive messages (vs. directive) had a higher share effect on Facebook.
 Complementary messages lead to greater sharing on Facebook and Twitter.
 Effects of figures of speech on sharing are complex. In general, for Twitter, both alliteration and
repetition is valuable. For Facebook, only alliteration is valuable (see table). 

 Informative (vs. action) images lead to greater sharing for directive messages (don’t do double
call to action).
 Action-oriented images are more likely to be shared when combined with expressive or
assertive speech acts. However this was relatively equal for informative images.
 Presence of readable text in images increases sharing.

Article 12: Borah, Banerjee, Lin, Jain, Eisingerich (2020). "Improvised

marketing interventions in social media." (23 pages summarized in 2,5)
 Research Question: How can improvised marketing interventions (IMIs) affect virality and firm
value? 
 Implications: Firms can implement these findings in order to reap the observed online sharing and
firm value benefits. More about implications in the last paragraph. 

Main Findings
1. IMI messages lead to greater virality than non-IMI messages. (H1)
2. IMI that contains quick wit (humor with timeliness or unanticipation) attracts users’ attention in
social media and drives virality. 
a. The interaction between IMI humor and timeliness positively affects virality. (H2)
b. The interaction between IMI humor and unanticipation positively affects virality. (H3)
3. IMIs with quick wit positively affect firm value. 
a. The interaction between IMI humor and timeliness positively affects firm value. (H4)
b. The interaction between IMI humor and unanticipation positively affects firm value. (H5)

Introduction
Many customers get tired of digital advertisements. To overcome this fatigue, this research looks at
the potential of improvised marketing interventions (IMIs) to improve digital communication.
An example of this is Oreo that within moments of the power outage during the Super Bowl, tweeted
‘power out? No problem’ with a starkly lit image of an Oreo cookie. This smart (and very cheap)
marketing action received 15000 retweets (significant publicity). 
This example demonstrates that an IMI can provide a strong boost to a brand’s positive electronic
word of mouth (WOM). 

Conceptual Development and Predictions

 Improvised marketing interventions (IMIs): Social media actions that are composed and
executed in real time proximal to an external event. 
 Quick wit: Situational humor that trades on timeliness and anticipation.

MI and Virality
H1: IMI messages lead to greater virality than non-IMI messages. Why?
IMIs help social media users contribute to their communities in more valuable ways than the could
with outdated and uninteresting news. With this information sharing, these users help firms grab the
attention of other users. 

When Do IMIs Contribute to Virality?

H2 & H3: The interaction between IMI humor and timeliness or unanticipation positively affects
virality.
Humor, timeliness, and unanticipation individually does not have a significant main effect on virality
for IMI. However, IMI’s humor interacts with timeliness or unanticipation (quick wit) because;
1. Speed of response attracts attention and initiates further conversation. 
2. Timeliness injects new fuel into a marketing communication’s humor, providing more drive for
people’s desire to bond with others through swift sharing. 
3. Sharing humorous and unexpected content makes social media users look good to other users.
Thus, IMIs with unanticipation and humor attract the attention of users and encourage people to
share such content. 

When do IMIs contribute to Firm Value?

H4 & H5: The interaction between IMI humor and timeliness or unanticipation positively affects firm
value.
They study firm value by using abnormal stock market returns. The researchers theorize that IMIs can
increase stock price for at least two reasons: 
1. The investors’ belief that the IMI’s virality itself will increase brand attitudes (e.g., awareness,
purchase intent, advocacy). 
2. The IMI’s signal that the brand is confident enough about its own reputation and its
employees’ judgment to empower them for IMI.

The study
They predict that IMIs are effective to firm value and message virality because they occur in real
time, offer humor and are either unanticipated or timely. They test this using 5

studies. 

Study 1
This study uses a quasi experiment during the Super Bowl on highly granular data to test whether
Oreo’s IMI tweet increases virality more than Oreos non-IMI tweet.
Result: H1 is supported, tweet had a positive and significant effect of OreoDunkIMI for virality. 

Study 2
This study uses an experiment to manipulate the key factors driving IMIs and test their effects on
virality.
Result: 
 The intention to retweet as the dependent variable shows a main effect of humor, timeliness,
and unanticipation. 
 In line with the theorizing, they find the two pairwise interactions between humor x timeliness
and humor x unanticipation to be significant (support of H2 and H3). 
 Neither two-way unanticipation x timeliness nor three-way interaction of humor x timeliness x
unanticipation is significant. 

Study 3
This study is based on a unique data set of 462 IMIs across 139 brands, spanning 58 industries over a
six-year period to assess the relationship between IMI messages’ content with virality and firm value.

Result: Significant and positive interaction effect between humor x timeliness and humor x
unanticipation on virality and firm value. (Support H2, H3, H4, H5). 

Study 4
 This study uses IMI messages and non-IMI messages from the airline industry to examine the
relationship between IMI messages’ content and virality as well as firm value.
Results: The interaction of humor and timeliness and of humor and unanticipation is positive and
significant for IMI tweets. Thus, the results are robust even when they include non-IMI constructs.

Study 5 
This study generalizes the findings using a random sample of S&P 500 firms to enhance the realism of
the effects of IMI on virality and firm value. Results: Stay the same, all hypotheses significant. 

Practical Implications
1. Planning the social media strategy ahead leads to control, but can also lead to a brand being seen
as out of touch, distant from its target audience, and failing to capture the trends and feelings.
2. Marketing managers should carefully consider not what to say but, importantly, how and when to
say it using social media.
3. Firms should put people and processes in place to facilitate the improvised composition and
execution of real-time marketing communications in response to external events
4. Proposed strategy: Break through the clutter and noise in the marketplace by engaging social
media users in a conversation about “what is happening now” in a witty way.

Video 13: Improvised Marketing Interventions

This video explains how improvised marketing interventions affect virality and firm value. The paper
indicates that the use of quick wit; humor and timeliness or unanticipation, are factors you need to
take into account when you engage in IMI.

The study
1. Study 1: Oreo example of improvised marketing intervention (IMI) → h1 supported, IMI leads to
more shares. 
2. Study 2: Intention to retweet (experiment with a tweet about a fun video of penguins) → h2 and h3
supported. Results show that high humor increases retweets (vs. low humor). 
a. But especially if timing was good (timeliness), the intention to retweet was high.
b. But especially with high unanticipation, the intention to retweet was high.
3. Study 3a + 3b: Virality (# of retweets) and stock value (field data): Here they use real life people to
rate 462 IMIs on humor, unanticipation and timeliness and test this on number of shares and stock
return. Results confirm h2, h3, and confirm the relation of successful IMI to firm value (h4).
4. Study 4a + 4b: IMI versus non-IMI with airlines (field data): Replicate findings.
5. Study 5a + 5b: In a variety of sectors (field data): Replicate findings.

Article 13:Bleier, Colleen, Harmeling, palmatier (2019). "Creating

Effective Online Customer Experiences," (22 pages summarized in 3,5)
 Research Question: How do online design elements shape multidimensional customer
experiences to influence purchase and how should these experiences be customized depending
on the products or brands sold?
 Implications: This research provides managers with clear strategic guidance on how to build
effective web pages.

Main Findings
1. The effects of social presence are just as strong as those of informativeness.
2. Uncertainty about the offered product type and its seller’s brand trustworthiness influences the
effects of the customer experience dimensions on purchase.
3. Search products benefit from a more informative experience but experience products benefit from
a more social experience. More specifically;
 4. For products high in search qualities (search products), an informative experience can increase
product sales while a social experience may suppress them. While experience products benefit from
a more social experience and informative experience can suppress them.
5. Look at the table below, too many results to repeat here. 

Introduction
This research uses 4 dimensions combined with 13 web design elements that shape the online
experience. This way it captures the mechanisms by which design elements affect product purchase.

Dimensions, Moderators and Antecedents of the Online Customer Experience

Success in the increasingly competitive online domain depends on sellers’ ability to orchestrate
verbal and visual stimuli (i.e., design elements) on product web pages to effectively convert page
visitors into buyers. 
The online customer experience consists of four dimensions: 
1. Informativeness (cognitive): Extent to which a webpage provides users with resourceful and helpful
information. Information is generally impersonal, outcome oriented, and objective. 
2. Entertainment (affective): The immediate pleasure the experience offers, regardless of its ability to
facilitate a specific shopping task. This can trigger arousal in web page visitors and reduce cart
abandonment in online stores.
3. Social presence (social): Psychological connection with the user, who perceives the webpage as
“warm,” personal, sociable, thus creating a feeling of human contact.
4. Sensory appeal (sensory): The way a web page stimulates the senses (stimulate sight, sound, smell,
taste, or touch). Online sensations can be evoked through imagery. Thus, sensory appeal influences
perception of product performance and thus purchase intention.

Uncertainty and the Moderating Role of Product Type and Brand Trustworthiness
Online shopping comes with uncertainties that do not exist offline. These affect how certain
experience dimensions influence purchase. There are two general moderators;
1. Product type: Online, customers cannot touch and feel the merchandise in which they are
interested, which can create uncertainty in product assessment before purchase. 
a. Experience products: Products where the most relevant attributes are discoverable only
through direct physical contact. Higher uncertainty in product assessment before purchase. 
b. Search products: Products where the most relevant attributes are accessible from information
without physical interaction. Lower uncertainty in product assessment before purchase.
2. Brand Trustworthiness: The physical separation between customers and products requires
customers to have faith in the accuracy and truthfulness of the product web page.
a. Trust: Willingness to rely on an exchange partner in whom one has confidence.
b. Low trustworthiness can be overcome through 1) purposeful web page design, 2) by
customizing content to customers’ preferences, 3) by entertaining online
experiences, 4) by social presence.

Design Elements that create the Online Customer Experience

The product web page is at the heart of the online customer experience. It consists of basic design
elements, defined as verbal and/or visual stimuli. 
Verbal elements:
1. Linguistic style: Affects product conversions and consumer perceptions of website effectiveness. 
2. Descriptive product detail: More attribute information increases purchase likelihood. 
3. Bulleted product features: Indicates how many product features appear in an abbreviated list at the
top of the web page.
4. Return policy information: Is this information easily retrievable? 
 Visual elements: 
5. Product feature crop: Zoom in on a key product feature that would otherwise not be visible. 
6. Lifestyle photo: Connect the product with customers’ lives. Imply human interaction with the
product. 
7. Photo size: Larger product images can increase purchase intentions. 
8. Product video: With human voices can influence perceptions of social presence and sensory appeal.
Verbal/visual elements: 
9. Customer star ratings: Aggregations of user-generated product ratings, shown with stars.
10. Expert endorsement: Form of product evaluation by experts. 
11. Comparison matrix: Tables to compare the focal product with other products. Can improve
purchase decision quality.
12. Recommendation agent: A list of alternatives to the focal product. Can Improve purchase decision
quality.
13. Content filter: Allow customers to dictate what, when, and how much verbal and visual content
appears on the web (e.g. ‘show more’ buttons).

Study
Study 1: Design Dimensions, and Implications of Online Customer Experiences
With this study they used many mock amazon product web pages to understand the relative
importance of each of the four online customer experience dimensions as key mediators in the
relationship between web page design elements and customer purchase.
Results: A product’s type and brand trustworthiness affect the impact of all four experience
dimensions on consumers’ purchase decisions. Additionally, customer star ratings and picture size are
relevant for all experience types. See the specific results shortly below and more in depth in the
tables below.
1. Informative experiences: Focus on this when you have search products and when you are
considered a trusted brand.
a. You can create informative experiences by using descriptive detail, five bulleted features,
customer star ratings, comparison matrices and recommendation agents. 
2. Entertaining experiences: Focus on this when you are considered a less trusted brand. 
a. No particular design element has its strongest effect on this experience. But in general,
increase the size of product pictures and highlight customer star ratings.
3. Social experience: Focus on this when you have a web page for experience products.
a. You can create social experiences by using a conversational linguistic style, include a lifestyle
picture, and avoid content filters. 
4. Sensory experiences: Focus on this when you have a webpage that should emphasize sensory
experiences. 
a. You can create sensory experiences by employing a product video (with audio and dynamic
visuals), and use a product feature crop that highlights key characteristics.
Implication: Marketers should use design elements strategically to evoke specific types of
experiences for different products and brands.

Study 2: Field Experiment to Test the Effect of Online Experience Designs on

Sales 
Here they did a field experiment that manipulates real product pages on amazon.
Results: For products high in search qualities (search products), an informative experience can
increase product sales while a social experience may suppress them. While experience products
benefit from a more social experience and informative experience can suppress them.  

Video 14 - Part 1: Customer experience & Recommendations

The part 1 of this video is about article 13 and explains what firms can do on their own platforms to
improve the customer experience. When looking at the POEM framework we are on the left side of
owned media (firm property) including the website and the product page.
So the basic idea is that all 13 web page elements can influence the four e-commerce customer
experience dimensions (informativeness, entertainment, social presence, sensory appeal), which
inturn influences customer purchase.
By improving some of these elements, you might gain a higher likelihood of customer purchase.
Additionally product type and brand trustworthiness influence uncertainty. Certain design elements
fit certain product types and certain levels of brand trustworthiness. What should you do?
1. Know your brand + product type.
2. Inventory and audit your design asset (what kind of website design is possible?).
3. Create “just right” customer experience.

Article 14: Gai, Klesse (2019). "Making recommendations more effective

through framings: impacts of user-versus item-based framings on
recommendation click-throughs." (15 pages summarized in 2)
 Research Question: Which framing, user-based or item-based, is more effective in triggering clicks
on a recommendation?
 Implications: Article explains under which conditions managers/website developers should frame
recommendations as user-based or item-based.

Main Findings
1. Framing the same recommendation as ‘user-based’, instead of ‘item-based’, can increase
recommendation click-through rates. user-based works better.
2. User-based (vs. item-based) framing informs customers that the recommendation is based on not
just product matching but also taste matching with other customers.
3. These findings rest on three boundary conditions (moderating effects) that cause the
recommendation recipient to view the taste matching as unsuccessful. Thus, decrease the
advantage of user-based framing over item-based framing. Advantage disappears when;
a. Customer segment: Consumption experience. More consumption experience reduces
advantage of user-base framing.
b. Product: Focal attractiveness. Less attractive focal products reduce advantage of user-base
framing.
c. Other users: Dissimilarity cues. Less similarity to the recommendation recipient reduces
advantage of user-base framing. 

Introduction 
This research looks at which framing, user-based or item-based, is more effective in triggering clicks
on a recommendation.

Theoretical Background
Recommendation Systems and Explanations to Customers
Recommendation systems: Automated, data-driven tools that companies adopt to fulfill their
customers’ personalization needs. They predict what customers want and deliver suggestions.
Two methods inform these recommendations, companies often combine these methods:
1. Collaborative filtering: Identifies customers who are similar in their product rating history
and recommends items that one customer likes to similar other customers.
 2. Content-based filtering: Identifies the product attributes that a customer likes and
recommends products with similar

attributes. 
Explaining why a recommendation is made to a customer is important, however challenging. The
algorithms are very complex, while explanation is necessary for the trust of the customer in the
recommendation.
Consumers extract information from other’s tastes to predict their own taste with unfamiliar
products and adopt others’ preferences if they believe those tastes match their own (reduce
uncertainty). 
Therefore, the researchers argue that H1: User-based framing increases recommendation click
throughs relative to item-based framing. 
However, this predicted advantage is premised on customers’ perception that the taste matching is
successful. Three factors create an important boundary condition;

Consumption Experience, Focal Attractiveness, and Dissimilarity Cues

1. Consumption experience: High consumption experience can decrease the perceived success of
taste matching because; 
a. Customers develop more refined and sophisticated tastes as they acquire more experience within
a consumption category. 
b. More experienced customers have accrued more observations of individual differences in tastes
and therefore likely regard their own taste as idiosyncratic.
c. Therefore the researchers argue that; H2: The advantage of user-based framing relative to item-
based framing decreases for customers with more consumption experience in that domain. 
2. Focal Attractiveness: Taste matching may appear less accurate if the focal product is less attractive
because;
a. Customers constantly learn about their own preferences through their reactions to different
products. Unattractive products are viewed as less indicative of their taste.
b. Therefore the researchers argue that; H3: The advantage of user-based framing over item-based
framing diminishes for unattractive focal products.
3. Dissimilarity cues: The presence of dissimilarity cues;
a. In ambiguous situations, in which the identities of other customers are not revealed,
people tend to assume self– other similarity. 
b. When the information that is the basis for the recommendation is provided to the
users, and this information points to a dissimilarity between users, it may undermine
the value of taste matching.
c. Because dissimilarity on certain dimensions (e.g., gender) activates thoughts of self–
other dissimilarity in other domains. 
d. Therefore the researchers argue that; H4: The advantage of user-based framing
relative to item-based framing decreases in the presence of cues suggesting self–
other dissimilarity. 

Study and Results

 The study includes two field experiments, two behavioral experiments and two scenario
experiments. 
1. Study 1: In these field experiments with article recommendations, the results affirm that user-
based (vs. item-based) framing increases recommendation CTR. (H1)
2. Study 2: This study tests and affirms H2 that consumption experience moderates the framing effect,
in a setting that provides painting recommendations. 
3. Study 3: This study used book selection to test H3; that liking the focal product moderates the
framing effect. It is a necessary prerequisite for taste matching to be perceived as successful and
thus for the advantage of user-based framing over item-based framing to arise.
4. Study 4: This study replicates the findings of study 3 with a different procedure. Additionally, they
also leverage information about the ages of other customers to test H4; by establishing a
dissimilarity cue that moderates the framing-effect and makes user-based framing disadvantageous
relative to item-based framing.
5. Study 5: This study strengthens the support for H4 by using gender as a different cue of
dissimilarity.

Video 14 - Part 2: Recommendations

The part 2 of this video is about article 14 and discusses which type of framing that is more effective
in triggering clicks on a recommendation. 

An example of the danger of recommendations

Youtube is trying to make you watch as long as possible (because then you view more ads). Thus,
their recommendations are sensitive to click-bait and sensation seeking. This leads to the trap of
tales. Its danger is that people only see one certain perspective of something, instead of a general
objective perspective.

About the article

You have user-based framing (similar users) and item-based framing (similar products). Item-based
framing is only based on what you do, while user-based framing is based on what similar users do. 
Which one is better? 
 User-based framing is relatively easy to apply as a company, but it is hard to recommend new
products, because nobody has liked that yet. While with item-based framing this is not an issue. 
 However, item-based framing works less well when the person is new on the platform, because
there is not enough data about the person’s preferences yet. Additionally, you need to code all the
attributes of a product, which can be quite challenging. 

The study
 Study 1: User-based versus item-based
 Study 2: Including product experience 
 Study 3: Including attractiveness of the product 
 Study 4: Including dissimilarity on age 
 Study 5: Including dissimilarity on gender
Results: User-based works better, although the advantage disappears when: 1) Experience in a
product is high, 2) Attractiveness is low, and 3) When users are dissimilar. 

Article 15: Kim, Tami, Barasz, John (2019) "Why Am I Seeing This Ad?
The Effect of Ad Transparency on Ad Effectiveness," (27 pages summarized
in 2,5)
 Research Question: How and why does ad transparency impact ad effectiveness? 
  Implications: Managers can use this article to learn what consumers find acceptable in
information catering and helps them determine when and how to be transparent about its ads.

Main Findings
People prefer advertisements based on the information they provide and when it's coming from the
website they are currently using. Ad transparency backfires when it exposes marketing practices that
violate norms about information flows. Why?
1. Whether consumers find information flows acceptable, is driven by the extent to which the ad is
based on: (the latter of each pair is less acceptable). 
a. Consumers’ activity tracked within vs. outside of the website on which the ad appears.
b. Attributes explicitly stated by the consumer vs. inferred by the firm.
2. The consumers’ relative concern for privacy over their interest in personalization mediates the
relationship between the acceptability of the revealed practice and the effectiveness of the ad.
Thus, the impact of acceptable vs. unacceptable information flow on ad effectiveness is mediated
by participants’ relative concern for their privacy over their interest in personalization. 
3. There is a moderating role of platform trust: When consumers trust a platform, revealing
acceptable information flows increases ad effectiveness (benefit of transparency). When
consumers do not trust a platform, revealing either acceptable or unacceptable information
decreases ad effectiveness. 

Introduction
There is an invasiveness of the ways firms gather and use personal information. Due to this, many
consumers and regulators are increasingly demanding ad transparency. Some firms have been
forthcoming with this information, others have resisted, concerned that this might undermine ad
effectiveness. This research looks at how and why transparency affects ad effectiveness. 

Conceptual Development
 Ad transparency: The disclosure of the ways in which firms collect and use consumer personal data
to generate behaviorally targeted ads.
 Norms about information flows: Consumers’ beliefs about how their information should move
between parties. 
Online ad platforms allow advertisers to target consumers with greater efficiency, specificity, and
accuracy. These developments led to new effective targeting tools including: behavioral retargeting,
content-based targeting and keyword-based targeting. 
Well-targeted ads are a benefit for the organization, but can also be of benefit to the customer (more
personalized ads means better suited to your needs, wants and interests). Still, many consumers
demand ad transparency. Ad transparency can;
 Increase the perceived person-product fit, increasing ad effectiveness. 
 Salient something that is not typically top of mind: the fact that marketers are collecting and using
their personal information, which could raise privacy concerns and decrease ad effectiveness. 

A Theory of Offline-to-Online Norm Transference

In the offline world, acceptable vs unacceptable flows of information are established and agreed
upon through norms. To determine whether some online personal information gathering is
acceptable, consumers turn to the offline world’s norms. They hypothesize that;
H1a&b: Ad transparency that reveals unacceptable information flows will reduce ad effectiveness, 
relative to ad transparency that reveals acceptable flows and relative to no ad transparency.

Privacy vs Personalization
 Consumers do rate the attractiveness of an ad by its fit with their needs. Thus, targeted ads, drive
higher ad effectiveness. However, marketers can go too far. When the ad is too personalized, it can
backfire. Highly personalized ads can increase privacy concerns that overshadow the interest in the
product and inhibit consumer behaviour. They hypothesized that;
H2: The reduction in ad effectiveness resulting from revealing unacceptable information flows will be
driven by consumers’ relative concern for privacy over their desire for the personalization.

Unlocking the upside of transparency

Trust in the ad platform moderates the effect of ad transparency on ad effectiveness in such a way
that;
 When trust is high, transparency in acceptable information flow increases ad effectiveness. 
 However, when trust is low, transparency in either acceptable or unacceptable information flow
decreases ad effectiveness. They thus hypothesize;
H3a: When consumers trust the ad platform, ad transparency that adheres to information flow
norms will increase ad effectiveness.
H3b: When consumers distrust the ad platform, ad transparency will decrease ad effectiveness
regardless of whether it adheres to information flow norms.

Overview of Studies
They did 5 studies to test the hypotheses. 

Study 1: Identifying Dimensions

In this study customers judged a list of practices that firms use to generate behaviorally targeted ads.

Result: Whether consumers find information flows acceptable, is driven by the extent to which the
ad is based on: (the latter of each pair is less acceptable). 
a. Consumers’ activity tracked within vs. outside of the website on which the ad appears.
b. Attributes explicitly stated by the consumer vs. inferred by the firm.

Study 2: Revealing Within vs Cross website Information Flows

In this study participants were shown an ad for a bookstore. participants were either given no
information on why they see this ad, or one or two transparency messages. Result: 
 Confirmed that ad transparency reduces ad effectiveness when it reveals cross-website
information tracking relative to the within-website flows and also relative to no transparency
(hypotheses 1a and 1b). 
  Showed that the impact of within vs cross website information flows on ad effectiveness was
mediated by participants’ relative concern for their privacy over their interest in
personalization.

Study 3: Revealing stated vs Inferred Information Flows

Study 3 tested the effectiveness of revealing that an ad is based on stated versus inferred attributes.
Participants were shown an ad for an online art gallery and were either given with no information or
one or two transparency messages. Results: 
 Confirmed that ad transparency reduces ad effectiveness when it revealed that the ad was
based on consumer attributes inferred by the firm (unacceptable information flow). 
 Showed that impact of inferred versus stated conditions on ad effectiveness was mediated
by participants’ relative concern for their privacy over their interest in personalization. 

Study 4: The Moderating Role of Trust 

In this study they measured consumer trust in Facebook and whether the level of trust in the ad
platform interacted with ad transparency. Results: There is a moderating role of platform trust: Users
who trust Facebook were more likely to engage with an ad that revealed acceptable information
flows than those who distrust Facebook. 

Study 5: The Benefit of Ad Transparency in the Field

In this study the test the effects of ad transparency on ad effectiveness under favorable
circumstances. Results: Companies can reap the benefits of ad transparency that reveals acceptable
information flows when consumers trust the ad platform. 

Video 15: Advertisements, transparency & Privacy

This video is about advertising, transparency and privacy. In the POEM framework this is about Paid
Media and some of the Owned media. It concerns increased exposure with PPC and SEO and pay per
click and display ads.

PPC and SEO

We will first talk about PPC and SEO (not in a paper). 
 Paid Ads: Straight forward, you pay for them and then you end up on top. 
o Ranking: Short-term impact possible.
o Traffic: Only for keywords selected.
o Costs: Per click.
o Tracking: Easy to measure and monitor.
o ROI: Likely consistent and predictable.
 SEO (search engine optimization): Concerns the ranking of your website based on certain
combinations of keywords. 
o Ranking: Long-term effort that requires resources.
o Traffic: Page can rank for multiple words.
o Costs: Clicks are free (but high development costs).
o Tracking: More difficult to measure.
o ROI: Long-term value.

About the Article

The article 15 is about the privacy and transparency of targeting and social media ads. Marketer’s
ability to target is growing;
 Behavioral retargeting: Displaying ads for products consumers recently viewed. 
 Content-based targeting: Displaying ads based on what consumers read. 
 Keyword-based targeting: Displaying ads based on the terms consumers entered into search
engines.
 Location-/place-based targeting: Mobile ads targeting a fixed area and shown to customers
entering this defined boundary within a specific timeframe. 

Offline-to-online norm transference

In the offline world, people have a clear idea about which information flows are acceptable vs.
unacceptable. This includes; implicit rules of communication, complying to social rules of disclosure
and penalizing noncompliance. The Offline world should be a guidepost for the online world. 

Offline-to-online norm transference 

Flow of information is judged to be as more acceptable if the personal information used to generate
the ad was based on information: 1) Within (vs. outside) the website on which the ad appears, 2)

Explicitly stated by the consumer (vs. inferred by the firm). 

Study
1. Study 1: Inductive study to identify dimensions.
2. Study 2: Within vs. cross-website information flow. 
3. Study 3: Stated vs. inferred information flow.
4. Study 4: Moderation by trust in ad platform. 
5. Study 5a/b: Field studies (benefits of ad transparency).

Week 5: The Technological Forefront

This week consists of six articles and seven videos. Looks like a lot but it is really doable (especially
compared to the amount of last week).

Video 16: Introduction Video

This week is about the technological forefront; AI, segmented reality, internet of things and other
emerging technologies. In order to specify which technologies will be discussed they looked at the

Gartner hype cycle. 

Gartner hype cycle: This is very similar to the product life cycle as we know it, but then made by
consultancy firm Gartner. All new technologies and their stages are shown in this graph. Note that
the stages are a bit different than what you know from the product life cycle.
Based on the hype cycle shown on the right, the lecturer decided to focus on AI. 

The technological forefront

Artificial intelligence (AI) and marketing: How can marketers use emerging digital technologies for
creating value in online and offline channels?

Article 16: Hildebrand, Christian (2019). The Machine Age of

Marketing: How Artificial Intelligence Changes the Way People Think,
Act, and Decide (8 pages summarized in 1,5 
 Research Question: How does AI change the way people think, act and decide?
 Implication: Helps clarifying the role of AI in the industry (not too broad, not too narrow).

Introduction
The machine age of marketing has arrived. E.g., use Alexa to add items to our shopping cart.
AI has been around for decades. So what happened? The field of AI cooled off between the 1970s
and late 1980s (the AI winter). This was due to limited computing and processing power. However, a
new era started in the late 1990s when the internet bubble attracted a lot of funds for tech
companies, data storage prices declined and computer power increased exponentially. Now there is
a new wave in automation which is enabled by progress in AI.

AI- Solving well-defined problems better than humans

Artificial intelligence: Any machine that uses any kind of algorithm to perform perceptual, cognitive,
and conversational functions typical of the human mind (visual, speech recognition, reasoning).
We use AI all the time, often without being aware of it. For example classifying emails as spam. AI
can be classified into two broad categories:
1. Artificial Narrow Intelligence (ANI): Better than humans at one specific task (reality). AI is often
behind the scenes (deep blue, siri, alexa, deep translator, self driving cars).
 2. Artificial General Intelligence (AGI): Capable of every task like humans (not reality). Not with
regard to a specific task, but through the ability to plan, reason, and attain a level of human-like
consciousness.

Value creation in the AI economy

AI is creating new forms of competition, value chains, and novel ways of orchestrating economies
around the world. AI is more than just technology: it’s creating a new economy. The fuel that runs
this economy is the combination of processing power, data, and the processing algorithms. Critical
layers and players in AI-driven economies

are: 
1. Data: The fuel that makes machines learn.
2. Infrastructure: The Hardware and platform providers.
3. Algorithms: The software and analytics engines (Amazon, Google ML).
4. Advocates: The enterprise and industry solution providers. (An entire industry lives from using the
existing open platforms of google and amazon to develop and sell client-specific services to
companies.
5. Users: The corporations seeking competitive advantage.
6. Regulators: The developing competition between nations. Countries are changing their regulations
to either protect individual privacy (western trend) or become the new AI leader (China).

AI can inspire your business

No matter if you work in the old economy or a digital business, AI is at a stage where it affects
everyone. What should i know about AI?
1. Using the digital footprints of consumers: Analyzing the digital footprints of people online can be
used to develop highly sensitive targeting campaigns. 
2. Chatbots as tool to improve customer service sales: Chatbots can be used to react fast to
consumer input online. Additionally they can be created for more natural service experience and a
sales tool. However, already angry customers become more angry when they talk to a human-like
chatbot.
3. Voice interfaces are becoming every-day companions: Voice based remote control can increase
loyalty effects, even for customer segments that are typically underserved. 
4. The adoption of AI hinges on trust: Consumers are often skeptical about algorithms. The more
subjective the task, the more we seek the opinion of humans as opposed to machines. Enhancing
the human-likeness of technology can help consumers reduce their skepticism of subjective tasks.
5. Ethical considerations and the role of morality: Researchers find a high overlap of global values
and recommend a broad social discourse for the definition of moral rules that AI should follow.

Article 17: Thompson (2018, NYT): A.I. help you? (10 pages summarized in 1)
This article does not really say anything, if you want to skip an article, this is the one.
 Research question: What are the current implications of conversational AI, how is it used, what
are its concerns, how does the future look like, what are the benefits, what are the costs?
 Implications: No clear implications are of this article. Conversational AI will change commercial
interactions, some people are positive about it, others are not. 

Main Findings
Conversational AI will change commercial interactions and chatbots, some people are positive about
it, others are not. 

Introduction
Alision Darcy was a clinical psychologist and a computer programmer. She developed a text-chatbot
therapist called Woebot. Woebot does not pretend to be human; it appears as a cartoon robot and it
acknowledges its own artifice (talks to humans as a separate race), it’s personality is upbeat. The
subjects (n=70) had lower incidences of depression and anxiety after using Woebot for two weeks.
Nowadays, Woebot exchanges between one and two million messages a week with users, ranging
from divorcées to the bereaved to young men, a population that rarely seeks treatment.
One change in human attitude towards machines is that we’ve got used to talking to them, mostly in
the form of giving assignments. The next shift in computer interfaces will be the rise of
“conversational agents”. 

The history of..

For years AI programmers fixated on passing the Turing Test: Produce a machine that can fool a
human into thinking it is also human. Now we are heading into a post-Turing world, one in which we
know that something is software, but still want to talk to it. This leads to another question; What
type of personality should bots have, when both we and they know they’re not human?

The impact of..

 The impact of conversational A.I on everyday life will be subtle but ubiquitous.
 They will get better and better to answer more complex questions. 
 Additionally, once coded, bots can handle millions of customers simultaneously. Thus,
conversational bots could bring on a new wave of unemployment or readjustment.
 Conversational A.I also has major privacy implications, collecting private data in our homes. 

In 2014, through an..

Indiegogo campaign, more than 7000 backers crowdfunded a robot called Jibo. It's a cute device with
a round screen for a face that is really optimistic. This had positive implications for eldery homes but
also moral risks. Talking bots connect to us in ways that point-and-click software doesn’t, this can
easily lead to manipulation. It is also argued that a future in which only the wealthy have the luxury
of being attended to by actual humans, while everyone else makes do with bots, would be a
dystopia.
Perhaps interacting with A.I.s will mean atrophy for our social muscles. If they’re just machines, why
bother with pleasantries? The scientific research on that is still unclear: Some show that we just don’t
want to be rude, doesn’t matter to what, others show that we do act different because it's a
machine.

Video 17: The Machine Age of Marketing

This video is about the machine age of marketing (artc. 16 & 17). Not much information in this video.

Difference between algorithms and Artificial Intelligence 

 Algorithms: A set of mathematical instructions or rules that, if given to a computer, will help to
calculate an answer to a problem (means). 
  Artificial Intelligence: The study of how to produce machines that have some of the qualities
that the human mind has, such as the ability to understand language, recognize pictures, solve
problems, and learn (outcome). 
AI Chatbot interactions in retail are expected to reach 22 billion by 2023.

Article 18: Longoni, Chiara, Bonezzi (2019) Resistance to Medical

Artificial Intelligence (22 pages summarized in 3)
 Research Question: What is the consumer’s receptivity to AI in medicine?
 Implication: This paper contributes to the psychology of automation and medical decision making,
and suggests interventions to increase consumer acceptance of AI in medicine. Also the way in which
AI is framed can make a difference in the acceptance of consumers. 

Main Findings
1. Consumers are reluctant to utilize healthcare provided by AI in real and hypothetical choices,
separate and joint evaluations. 
2. The resistance to medical AI is out of fear of Uniqueness neglect: A concern that AI providers are less
able than human providers to account for consumers’ unique characteristics and circumstances.
3. If a provider is automated rather than human;
a. Consumers are less likely to utilize healthcare (study 1).
b. Consumers exhibit lower reservation prices for healthcare (study 2).
c. Consumers are less sensitive to differences in provider performance (studies 3A–3C).
d. Consumers derive negative utility (study 4).
4. Resistance to medical AI is stronger for consumers who perceive themselves to be more unique
(study 5).
5.   Uniqueness neglect mediates resistance to medical AI (study 6).
6. Resistance to medial AI due to uniqueness is eliminated when AI provides care; 
a. That is framed as personalized (study 7).
b. To consumers other than the self that are perceived as average (study 8).
c. That only supports decisions made by a human healthcare provider (study 9).

Introduction
Artificial intelligence (AI) is revolutionizing healthcare. This revolution is based on the idea that AI can
perform with expert-level accuracy (sometimes better than human providers) and deliver cost-
effective healthcare at scale. Whereas much is known about medical AI’s accuracy, cost-efficiency,
and scalability, little is known about patients’ receptivity to medical AI. But the patients are the ones
who can drive the adoption of AI in healthcare. 
This paper looks at consumers’ receptivity to medical AI. It argues that consumers may be more
reluctant to medical care delivered by AI providers than human providers, because of uniqueness
neglect. 
Uniqueness neglect: The idea of being cared for by AI providers can more easily create the idea that
one’s unique characteristics, circumstances, and symptoms will be neglected. 

Theoretical framework
Statistical models are more accurate than human intuition. Thus, people should prefer following the
advice of statistical models over human intuition. However, this is usually not the case. E.g, people
prefer advice of friends rather than of computerized recommendations for books, movies, and jokes.
Additionally, experts trust their own judgment more than the algorithms’ recommendations. 
In the medical field, research about resistance to statistical models is limited. This research shows
that even though statistical models outperform doctors, doctors prefer their own intuition, and
consumers evaluate doctors who rely on statistical models as less professional and less competent.
Problem: Adoption of medical AI depends on consumer receptivity to this technology.

The Current Research

The researchers argue that uniqueness neglect emerges out of a mismatch between two believes: 
1. Self-uniqueness: Consumers view themselves as unique and different from others. This also
applies to health-related characteristics. Situations that threaten self-uniqueness result in feelings
of anxiety and drive people to restore their desired self-distinctiveness.
2. Cognitive inflexibility: Consumers view machines as incapable of cognitive flexibility: adapting
cognitive processes to new and unexpected conditions in the environment. Machines are
standardized, rigid and inflexible. This also applies to AI medical care providers
Therefore the hypothesis H1 states that; Consumers will be more resistant to utilizing healthcare
delivered by AI providers than healthcare delivered by comparable human providers out of a concern
that the unique facets of their case will be neglected.
Uniqueness neglect builds upon the broken leg hypothesis: People distrust statistical judgments
because they fear that a statistical model might omit key evidence. 

Overview of the Studies

They tested our uniqueness neglect hypothesis across eleven studies, nine mentioned in this paper.

Study 1: Likelihood to utilize Healthcare by Provider

Students were less likely to schedule a diagnostic stress assessment when the provider was
automated than when the provider was human.

Study 2: Willingness to Pay for Healthcare by Provider

Participants were willing to pay less to use an automated provider when the default was a human
provider, than to use a human provider when the default was an automated provider.

Studies 3A-3C Relative Preference for Medical Provider

Three types of care were tested (prevention/diagnosis/treatment) across different accuracy rates.
They tested X=Y: meaning that AI is similar to human accuracy. And, X<Y: meaning AI accuracy is
higher than those of humans. Participants were resistant to medical AI even when the performance
of AI providers was explicitly specified to be superior to that of human providers.

Study 4: Utilities by Provider in Choice-Based Conjoint

In a choice-based conjoint task, in which respondents traded off provider, accuracy, and cost of
healthcare, the utility associated with an automated rather than a human provider was negative,
meaning that respondents were reluctant to choose an automated medical provider.

Study 5: Sense of Uniqueness as Measured Moderator

The results showed correlational evidence for uniqueness neglect as a driver of resistance to utilize
medical AI. The more participants perceived their characteristics to be unique and different from
those of others, the more they exhibited resistance to an automated provider. 

Study 6: Uniqueness Neglect as Mediator

Participants were less likely to follow a treatment recommendation offered by an automated rather
than a human provider, and uniqueness neglect mediated the effect.

Study 7: Personalized Care Curbs Uniqueness Neglect

This study tested ‘personalization of healthcare’ as a moderator that should curb (decrease)
resistance to medical AI. Results showed that participants automatically assumed that care delivered
by the human provider was personalized, while participants believed that care delivered by the
automated provider was personalized only if they were explicitly told so. Their intention to follow the
recommendation was higher when it was explicitly personalized than when it was not.
Thus, when human and automated providers were described as capable of tailoring care to each
patient’s unique characteristics, participants were equally likely to follow AI recommendations as
human provider recommendations.

Study 8: Resistance to Medical AI Does Not Manifest When Consumers are Deciding for
Average others
Participants showed resistance to medical AI when deciding for themselves, as well as for another
person perceived to be unique. But they did not show resistance to medical AI when deciding for a
person who was not perceived to be unique (average). Thus, these results confirm that resistance to
medical AI is driven by the perceived inability of AI to satisfy the unique needs of patients.

Study 9: Moderation by AI Role - Support vs. Replacement

Consumers were resistant to using medical AI when an automated provider replaced a human
provider as the decision maker. However, resistance to medical AI did not emerge when an
automated provider only supported a human provider who made the decision. 

Video 18: Trust in AI

A large part of this video is optional material about articles that we do not have to read - optional

articles. 

Optional Part
The relationship between the degree of a robot/object’s resemblance to a human being and the
emotional response to such an object increases until at a certain point the robot becomes too
realistic. The decrease is called the uncanny valley. See figure.   
Algorithms are everywhere. They are just formales to solve problems. They love data. The more input
data, the more accurate the prediction. Customer journeys are collecting more and more data. Input
variables → Logit regression → Binary outcome variable.
Castelo et al. (2019) found that the trust of algorithms depends on the tasks they perform. If it's a
subjective task, consumers don’t trust algorithms. If it is an objective task, consumers do trust

algorithms. See figure.

Mandatory part - Article 18

People have a concern that one’s unique characteristics, circumstances, and symptoms will be
neglected. This leads to a resistance of AI as a medical provider.
 Algorithm aversion (Dietvorst, Simmons, Massey, 2015):
 People more quickly lose confidence in algorithms than human forecasters after seeing them
make a mistake. 
 We essentially hold algorithms to a higher standard than we do humans, expecting algorithms to
meet performance goals that humans themselves may not reach.

Article 19: Luo et al (2019). Frontiers Machines vs . Humans: The

Impact of Artificial Intelligence Chatbot Disclosure on Customer
Purchases (12 pages summarized in)
 Research Question: What is the impact of artificial intelligence chatbot disclosure on customer
purchases?
 Implications: This paper provides useful information about the value of AI-voice chatbots and its
implication, customer targeting, and advertising in conversational commerce. Implementing voice
AI chatbots has ofocurse large implications in cost reduction, higher success rates etc. 

Main Findings 
1. Undisclosed voice chatbots are as effective as proficient workers and four times more effective
than inexperienced workers in engendering customer purchases. 
2. However, a disclosure of voice chatbot identity before the machine–customer conversation
reduces purchase rates by 79.7%. 
3. These results are robust to nonresponse bias and hang-ups, and the voice chatbot disclosure
substantially decreases call length. Why?
4. When customers know the conversational partner is not a human, they are curt and purchase less
because they perceive the disclosed bot as less knowledgeable and less empathetic. The negative
 disclosure effect seems to be driven by a subjective human perception against machines, despite
the objective competence of AI chatbots. 
5. The negative impact can be reduced by a late disclosure timing strategy and customer prior AI
experience. 

Introduction
AI chatbots: Computer programs that simulate human conversations through voice commands or
text chats and serve as virtual assistants to users.
The market size of AI chatbots is expanding quickly, from $250 million in 2017 to more than $1.34
billion in 2024. AI chatbots provide 3 main unique business benefits:
1. They automate customer services and facilitate firm-initiated communications. 
2. Chatbots can converse in a friendly way with customers because they don’t have bad days and
never get frustrated or tired like humans.
3. They can easily scale up to handle a large volume of customer communications. 
However, AI chatbots also have a disadvantage: Customers may feel uncomfortable in talking with
computer programs for personal needs or letting chatbots assist in purchase decisions. Humans may
prejudice that chatbots lack personal feeling and empathy, and perceive bots as less trustworthy
with payment information and product recommendations. Additionally, customer privacy protection
increases and encourages companies to be transparent about AI chatbots applications. Therefore,
firms face a dilemma in disclosing the usage of AI chatbot technology to customers.
This research varies the disclosure of voice-based chatbot (no disclosure, disclosure before
conversation, after conversation, or disclosure after decision) as well as human expertise (proficient
or inexperienced workers). They test the causal impact of chatbot disclosure on customer purchases
and compare the performance of chatbots and human workers in the six-condition experiment.

Theoretical Framework - Related Literature on AI Applications and Text-based Bots

AI is useful in many industries. Automatization completely removes variable costs and replaces it to
fixed costs. However, automatization often reduce; service satisfaction, recommendation intention,
repatronage intention and positivity of online reviews. 
Previous research shows that AI automatization may be undesired by consumers when the ‘identify
motives’ are important drivers of consumption. However, other research found that nonexperts
appreciate algorithmic advice.

Company Background and Experiment Settings

The randomized field experiment was conducted by a major internet-based financial service
company in Asia. The company can assign chatbots or human workers in its call center to make
outbound sales calls to renew their loans. The company implements a sophisticated voice AI chatbot,
that unlike traditional rule-based systems can conduct live and natural conversations with customers.

Field Experiment Design

The company randomly assigned 6200 conversations / customers to receive a sales call from either
human agents or AI chatbots. Each customer receives one call and is randomized into 1/6 categories:
1. Underdogs: New human workers with low pas performance. 
2. Proficient workers: Experienced human agents with high past performance. 
3. AI chatbot without disclosure. 
4. AI chatbot with disclosure before conversation. 
5. AI chatbot with disclosure after conversation (until after communicating the promotional deal to
customers but right before they decide whether to purchase). 
6. AI chatbot with disclosure after purchase decision. 
Results
Hangups: Refer to the calls that were answered by customers, but the customers were terse and
terminated the calls within five seconds right after chatbot identity disclosure. See figure for hangup
rates per category. In short, people hang up if they get told  it is a chatbot.

The disclosure of chatbot machine identity reduces purchase rates substantially. Customers tend to
purchase less and even terminate the calls early.

Why do AI chatbots have such high hangup rates and much lower purchase rates if people know that
they are calling with a chatbot? →  because they perceive the disclosed chatbot as less
knowledgeable and empathetic. The figure shows the influence of perceived empathy and perceived
knowledge on the relationship between disclosure before conversation and call length.

Recommendations
This paper suggests that to mitigate the negative purchase effects of chatbots, you need a late
disclosure timing strategy of AI chatbots and preferably customer prior AI experience. This is
reasonable because the customer might form a good impression in the first one- minute interaction
with the AI chatbot, which can help reduce the distrust of the chatbot. 

Video 19: How does AI impact firm outcomes

This video is about article 19. It starts with describing the problem of automation: 
 Consumers assume that deployment of automation technology is an intentional behavior by
the firm.
 This triggers a search for the firm’s motives for this behavior 
 Consumers assume that firms replace humans to cut costs, not to make the customer
experience better. 
 But what if customers don’t know?

Results
 AI can effectively replace standardized sale calls.
 Disclosing that agent is non-human harms effectiveness.
 Late disclosure can curb the negative effects of disclosing that the agent is non-human. 
 Customers with prior AI experience (e.g., smart digital agent) attenuated the negative
disclosure effect.

Article 20: Dekimpe, Manik, Geykens, Gielens (2019. Using

technology to bring online convenience to offline shopping (5 pages
summarized in 1)
 Research Question: How could technology enable physical stores to offer the level of
convenience consumers have become used to in online stores?
 Implications: This article helps physical store retailers by providing an overview of the
technologies that could ease the shopping environment for consumers.

Introduction 
Even in the online revolution, physical stores are still really relevant (>90% of all purchases involve a
physical store). However, retailers should realize that online shopping has fundamentally changed
consumers’ expectations about physical shopping; they now expect the same convenience in the
physical as in the digital channel. Retailers have to adopt recent technological breakthroughs to
create an equally frictionless shopping environment in-store. The researchers identify some of the
most promising shopper-facing technologies that brick-and-mortar retailers can use to actively
manage customer touchpoints and deliver high levels of convenience across the various stages of the
shopper journey:

2. Search convenience: Product discovery and selection

Search convenience: The ease of identifying desired products. Retailers;

 Increasingly implement beacon technology to track customers’ in-store movements and help
them find their way around the store.
 Use robots to demonstrate new products. E.g., Media Markt’s Rotterdam store; Lowe’s Lowbot.
 Offer hands-free shopping carts that guide shoppers through the store. E.g., 7Fresh.
 Offer augmented/mixed reality. While virtual reality is a big trend in e-commerce,
augmented/mixed reality: Integrates physical and virtual experiences—offers more potential for
physical stores. E.g., Sephora that offers “magic mirrors” in its stores to help consumers visualize
different make-up treatments.

3. Possession convenience: personalization and fulfilment

Possession convenience: The ease of obtaining desired products from a retailer. Retailers;

 Track real-time shopper behavior via consumers’ smartphones, and assess which products
shoppers were interested in, but decided not to buy. Reduce disadvantage relative to online
retail.
 Use Smart shelf labels: Offer tailored recommendations and personalized discounts during the
critical ‘first moment of truth’. E.g., Digital ordering kiosk of McDonalds personalizes menus.
 Use 3D printing to offer add-ons for furniture (IKEA) or customized cake decorations (AH).
 Use Automated self-service pickup: having pickup location inside the store. Can stimulate
impulse purchases when picking up the order.
 Use Self-driving robots and drones.

4. Transaction convenience: self-checkout and no-checkout

Transactional convenience: The ease of effecting transactions with the retailer.

Recent technological advances enable retailers to improve their customers’ checkout experience
through;

 Unmanned checkout-zones
 Checkoutless stores: Include automated scan portals (which may be well suited for large grocery
baskets) and scanning-on-the-go through mobile devices.

Video 20: Next Steps

This video explains the next steps for the future. AI is currently seen as the most promising
technology. We see a digital transformation of many customer journeys. Digital won’t replace the
physical channels in retail, it rather is a and/and situation.