To Buy or Not to Buy
Creating Effective Marketing Messages Through Moderately Surprising Syntax
Selin Atalay, Siham El Kihal & Florian Ellsaesser
Journal of Marketing, forthcoming
Language is critical to the effectiveness of marketing messages. Achieving a desired outcome requires arranging words to formulate a message (i.e., syntax), but this task is not trivial. Here, we study the role of syntax in marketing communications by focusing on syntactic surprise: how unexpected the syntax of a message is. The paper introduces a measure that captures syntactic surprise, establishes its internal and external validity, and tests its effectiveness for marketing messages. In a series of studies that include field data and randomized field experiments from contexts such as donations, advertising, and product reviews, we show that a message's syntactic surprise is related to its effectiveness. This relationship follows an inverted U-shape, such that medium syntactic surprise messages are the most effective. We then conduct experiments on Facebook and Instagram to demonstrate how these findings can be used to write effective marketing messages. In collaboration with two independent companies, we show that ads for products, services, or jobs that are written with medium syntactic surprise result in higher click-through rates than ads written with low or high syntactic surprise.
The Preference for Spontaneity in Entertainment
Jacqueline Rifkin, Katherine Du Keisha Cutright
Journal of Consumer Research, forthcoming
Whether watching a movie, sports game, or musical performance, consumers often seek entertainment experiences that are produced by one or more individuals. And although consumers often witness producers acting spontaneously, little is known about the preference for spontaneity in entertainment. Six studies, including real consumer-relevant decisions and a Facebook field experiment, reveal that consumers prefer spontaneity (vs. planned behavior) across several entertainment contexts, as spontaneous producers seem more authentic than planned producers. At the same time, however, spontaneous actions are also believed to beget lower-quality outcomes, suggesting that consumers generally prefer spontaneity even despite the possibility of reduced quality. Subsequent experiments examine characteristics of the entertainment context and producer to provide further insight into how consumers manage the authenticity-quality trade-off: By shaping when and why spontaneity is associated with increased authenticity and decreased quality expectations, as well as the relative importance of these dimensions, higher-stakes contexts (e.g., when consumers' outcomes are enmeshed with the producer's), negative inferences about spontaneity (e.g., laziness, lack of concern), and low-competence producers attenuate the effects. Together, this research advances knowledge about spontaneity and authenticity and has implications for those seeking to produce appealing entertainment experiences.
When Payments Go Social: The Use of Person-to-Person Payment Methods Attenuates the Endowment Effect
Liang Huang & Jennifer Savary
Journal of Marketing Research, forthcoming
The authors examine how person-to-person (P2P) payment methods affect consumers' participative pricing decisions. Participative pricing occurs when people choose how much to pay for a good or how much they will sell it for. This pricing mechanism is increasingly common, for example, on platforms like Craigslist, eBay, or Etsy. A successful transaction requires that consumers converge on a mutually acceptable price, yet decades of research on the endowment effect show that sellers often demand more for goods than buyers are willing to pay. The authors propose that compared with traditional payment methods, when consumers use P2P payments they make somewhat more cooperative pricing decisions: buyers are willing to pay a bit more and sellers are willing to accept a bit less. This attenuates the endowment effect and increases the odds of a successful trade. This occurs because even when the trade is with a stranger, P2P payments can subtly activate a social transaction context, cuing the social transaction pricing norm of making more cooperative pricing offers. The authors test these proposals in eight studies using consequential and hypothetical choices, moderation, and mediated moderation. A simulation indicates that compared with traditional payment methods, the use of P2P payments can increase successful transactions in a marketplace by nearly 10%.
Toxic Content and User Engagement on Social Media: Evidence from a Field Experiment
George Beknazar-Yuzbashev et al.
University of Chicago Working Paper, January 2023
As much as forty percent of social media users have been harassed online, but there is scarce causal evidence of how toxic content impacts user engagement and whether it is contagious. In a pre-registered field experiment, we recruited participants to install a browser extension, and randomly assigned them to either a treatment group where the extension automatically hides toxic text content on Facebook, Twitter, and YouTube, or to a control group without hiding. As the first stage, 6.6% of the content displayed to users was classified as toxic by the extension relying on state-of-the-art toxicity detection tools, and duly hidden in the treatment group during a six-week long period. Lowering exposure to toxicity reduced content consumption on Facebook by 23% relative to the mean -- beyond the mechanical effect of our intervention. We also report a 9.2% drop in ad consumption on Twitter (relative to the mean), where this metric is available. Additionally, the intervention reduced the average toxicity of content posted by users on Facebook and Twitter, evidence of toxicity being contagious. Taken together, our results suggest a trade-off faced by platforms: they can curb users' toxicity at the expense of their content consumption.
Designing Dealer Compensation in the Auto-Loan Market: Implications from a Policy Change
Zhenling Jiang et al.
Marketing Science, forthcoming
We study dealer compensation in the indirect auto lending market, where most lenders give dealers the discretion to mark up interest rates and the markup constitutes a dealer's compensation. To protect consumers from potential discrimination by this dealer discretion, several banks adopted a policy that removes dealer discretion and compensates dealers by a fixed percentage of the loan amount. We document that this policy decreased (increased) the interest rates for low-credit (high-credit) consumers; however, the market share of these banks also decreased (increased) in low-credit (high-credit) segments -- a reversal of the usual demand curve. This reversal highlights a significant influence of auto dealers on consumer choices. Accordingly, we develop an empirical model that features dealer-consumer bargaining. Our estimation results show systematically different levels of bargaining power across consumer groups. We use the model to explore alternative compensation schemes that remove dealer discretion. We find that a lump-sum compensation scheme obtains the most market share. In addition, the optimized lump-sum scheme improves consumer welfare compared with the adopted policy. Our study highlights the importance of accounting for the incentives and bargaining power of middlepersons.
Virtual Fitting Room Effect: Moderating Role of Body Mass Index
Shuai Yang et al.
Journal of Marketing Research, forthcoming
An emerging virtual-reality technology, virtual fitting room (VFR) allows online shoppers to virtually try on clothes. Despite its increasing popularity, how VFR influences different consumer groups is hitherto unknown. Neglecting such nuances may significantly undermine VFR effectiveness. Based on a large-scale field experiment with real-world transactional data and five laboratory experiments, the authors document the asymmetric effects of VFR conditional on consumer body types, characterize the theoretical underpinnings, and identify a systematic set of managerially actionable moderators that can mitigate adverse effects. Specifically, while VFR enhances product evaluations and purchases among consumers with relatively low body-mass-index (BMI) levels, it negatively influences responses from high-BMI consumers due to self-image threat induced by avatars that resemble consumers' own bodies. To cope with self-image threat, high-BMI consumers tend to shift the blame to the apparel item, resulting in negative product responses. The authors identify four feasible solutions to alleviate the negative responses among high-BMI users of VFR, namely, promoting diversified beauty standards, featuring mannequin face for VFR avatars, providing consumers opportunities to engage in prosocial behavior, and presenting high-status products. These findings offer guidance for retailers to smartly leverage this new technology to enhance both business performance and consumer wellbeing.