Brand Buzz in the Echoverse

Abstract

Social media sites have created a reverberating “echoverse” for brand communication, forming complex feedback loops (“echoes”) between the “universe” of corporate communications, news media, and user-generated social media. To understand these feedback loops, the authors process longitudinal, unstructured data using computational linguistics techniques and analyze them using econometric methods. By assembling one of the most comprehensive data sets in the brand communications literature with corporate communications, news stories, social media, and business outcomes, the authors document the echoverse (i.e., feedback loops between all of these sources). Furthermore, the echoverse has changed as online word of mouth has become prevalent. Over time, online word of mouth has fallen into a negativity spiral, with negative messages leading to greater volume, and firms are adjusting their communications strategies in response. The nature of brand communications has been transformed by online technology as corporate communications move increasingly from one to many (e.g., advertising) to one to one (e.g., Twitter) while consumer word of mouth moves from one to one (e.g., conversations) to one to many (e.g., social media). The results indicate that companies benefit from using social media (e.g., Twitter) for personalized customer responses, although there is still a role for traditional brand communications (e.g., press releases, advertising). The evolving echoverse requires managers to rethink brand communication strategies, with online communications becoming increasingly central.