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Group 8

Viral Marketing - Digitization of WOM : Promise and challenges of Online Feedback Mechanisms. Group 8. Introduction. Online feedbacks Mechanisms : technology for building trust and fostering cooperation in online marketplaces Web 2.0 : bidirectional communication

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Group 8

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  1. Viral Marketing - Digitization of WOM : Promise and challenges of Online Feedback Mechanisms Group 8

  2. Introduction • Online feedbacks Mechanisms : technology for building trust and fostering cooperation in online marketplaces • Web 2.0 : bidirectional communication • WOM : New significance with internet • Changing people’s behavior : cooperation • Changing organizations' behavior : Brand building, product development

  3. Case study : eBay’sfeedback mechanism • Founded in 1995, leading online marketplace • All transactions are not backed on the formal contractual guarantees • Feedback mechanism: cooperation and trust • Success due to its reputation

  4. Studies on eBay’s feedback • One-time deals: 89% • Do you trust the feedback on eBay? Most influential components : • Overallnumber of positive and negative ratings • Recentlypostednegativecomments • Do youthinkthey are more positive or negative feedback? • positive 99.1% negative 0.6% neutral 0.3%

  5. Reputation in Game Theory Higher payoff(reduce the temptation to cheat) Positive feedbacks Reputation Limits : Some sellers were willing to sell products at a discount in exchange for positive feedbacks. （A study by the University of California Berkeley，2007）

  6. Review of Taobao’s feedback • Taobao’s rating system • Is this seller reliable?—looking at the feedback • Hearts<diamonds<crowns • Red, yellow and black flowers Positive feedback neutral Negative feedback

  7. Review of Taobao’s feedback • Good feedback is boring, bad feedback is interesting • Update – new additions to the system Seller Speed, Accuracy and Attitude • A Word About Leaving Bad Feedback to avoid disputes

  8. Challenges and Opportunities • Undertanding the impact of Scalability: Need of first feedbacks to induce trust Riskof being the first evaluator • Cheating the system: Online Identities Biaisedand deletedcomments • Exploiting the Feedback mediators : Show feedbacks’ data the wayyouwant • Game theory: People tend to behonest and to trust theirpeers

  9. How to manage feedbacks? • Companiestry to have control about feedback thanks to severaltools: • Filter the content and deletenegativecomments • Pay to gain followers/likes/comment • Givefinancialincentives to create feedback

  10. Pay for feedbacks fastfollowers.com epinions.com

  11. The New Way of Creating Feedback: The InstagramHotel • 4 Stars Hotel- Sydney, Australia • Free night for Instagram people > 10,000 followers • Hoteldesigned to bephotographed • Selfie-space http://www.konbini.com/fr/3-0/1888-hotel-instagram/

  12. Hotels’ Strategy • Great competiton • Design issues / Reviews amount issues • Promotion by Rewardingcustomersthatgivegreat impact

  13. Conclusion • Constructlarge-scaleword-of-mouth networks • Create side effects : Increaseinterdependencies • To understand it you need to : take into account the online environment, design precisely the type of information you want, volatility of online identities • Game theoryis the naturalfoundationfor the study of online feedback mechanisms.

  14. Last feedback mechanism The betterourgrades The betteryour course evaluation…

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