Category Archives: box office revenue

Does Twitter Matter?

twitterYou spend a lot of time on Twitter writing pithy statements and communicating with your target audiences. But does what people read on Twitter affect their purchase behavior? One recent study suggests that for at least one product category – it does. A study by Thorsten Hennig-Thurau, Caroline Wiertz and Fabian Feldhaus in the Journal of the Academy of Marketing Science found that Twitter can influence people’s decisions to see or (more importantly) not see a movie.

Word of mouth via Twitter can also directly affect the revenue from films in their opening weekend.To study the influence of Twitter the researchers collected tweets of reviews of 105 movies in the 24 hours following their releases. They then modeled: 1) the percentage of positive and negative reviews and 2) the ratio of positive to negative reviews. The model controlled for the star power of the actors, the budget, reviews by professionals, ad spending, the strength of the studio and even the rating.

They collected over four million tweets, 800,000 total movie reviews and about 40,000 per movie. Most tweets (65%) were sent between Friday (movie release day) and Saturday at noon. The authors examined the box office revenues from movies and estimated whether a movie would make more money without negative reviews. For example , Nightmare on Elm Street would have earned 8% more money- close to an additional 3 million dollars if the bad reviews were not posted.

Word of mouth is a long-studied area of consumer research and studies suggest that there is a bias in favor of negative information. This means that people give more weight to negative information than positive information. There are a few reasons for this. The first is that people try to limit their downside risk. A negative review of a product provides a greater potential negative outcome (spending money and wasting time on a bad movie) than the potential of the offering (seeing a good movie). Another reason is that negative reviews are typically not expected by consumers, so more weight is attached to them. That is why it is important for firms to monitor their Twitter accounts and attempt to mitigate negative comments.

The authors also identify the phenomenon “the Twitter effect:” the influence on early adopters who rely on Twitter for evaluations of “experiential media products.” In the past there was no opportunity for people to obtain very early reviews of movies, lending added importance to “microblogging word of mouth (MWOM),” another term suggested by the authors of the study.

Henning-Thureau, Caroline Wiertz and Fabian Feldhaus (2015) “Does Twitter matter? The impact of microblogging word of mouth on consumers’ adoption of new movies.” Academy of Marketing Science, 43(3), 375-394.