INFORMS Open Forum

Save it or Spend it? Advertising Decisions Amid Consumer Word-of-Mouth

  • 1.  Save it or Spend it? Advertising Decisions Amid Consumer Word-of-Mouth

    Posted 10-19-2020 13:51

    CATONSVILLE, MD, October 19, 2020 – Most people have seen or heard from a friend, neighbor or family member about a product or service they've used and how their experience was. It's called observational learning or word-of-mouth. These communications don't provide an unbiased assessment of true quality. Given this, businesses are faced with the difficult decision of determining when and how to spend their ad dollars. New research in the INFORMS journal Marketing Science finds when consumers learn about products/services from other consumers, a business may actually want to spend more money to credibly signal its quality.

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    Ashley Smith
    Public Relations Specialist
    INFORMS
    Catonsville MD
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