Analyzing the online word of mouth dynamics: A novel approach

Abstract

In today's digital economy, virtually everything from products and services to political debates and cultural phenomena can spark WOM on social media. Analyzing online WOM poses at least three challenges. First, online WOM typically consists of unstructured data that can transform into myriad variables, necessitating effective dimension reduction. Second, online WOM is often continuous and dynamic, with the potential for rapid, time-varying changes. Third, significant events may trigger symmetric or asymmetric responses across various entities, resulting in “bursty” and intense WOM from multiple sources. To address these challenges, we introduce a new computationally efficient method—multi-view sequential canonical covariance analysis. This method is designed to solve the myriad online WOM conversational dimensions, detect online WOM dynamic trends, and examine the shared online WOM across different entities. This approach not only enhances the capability to swiftly interpret and respond to online WOM data but also shows potential to significantly improve decision-making processes across various contexts. We illustrate the method's benefits through two empirical examples, demonstrating its potential to provide profound insights into online WOM dynamics and its extensive applicability in both academic research and practical scenarios.