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Journal of Interactive Marketing 28 (2014) 43 – 54
www.elsevier.com/locate/intmar

Consumer Decision-making Processes in Mobile Viral Marketing Campaigns

Christian Pescher & Philipp Reichhart & Martin Spann ⁎
Institute of Electronic Commerce and Digital Markets, Ludwig-Maximilians-Universität München, Geschwister-Scholl-Platz 1, D-80539 München, Germany

Available online 22 November 2013

Abstract

The high penetration of cell phones in today's global environment offers a wide range of promising mobile marketing activities, including
mobile viral marketing campaigns. However, the success of these campaigns, which remains unexplored, depends on the consumers' willingness to
actively forward the advertisements that they receive to acquaintances, e.g., to make mobile referrals. Therefore, it is important to identify and
understand the factors that influence consumer referral behavior via mobile devices. The authors analyze a three-stage model of consumer referral
behavior via mobile devices in a field study of a firm-created mobile viral marketing campaign. The findings suggest that consumers who place
high importance on the purposive value and entertainment value of a message are likely to enter the interest and referral stages. Accounting for
consumers' egocentric social networks, we find that tie strength has a negative influence on the reading and decision to refer stages and that degree
centrality has no influence on the decision-making process.
© 2013 Direct Marketing Educational Foundation, Inc. Published by Elsevier Inc. All rights reserved.

Keywords: Mobile commerce; Referral behavior; Sociometric indicators; Mobile viral marketing

Introduction relies on peer-to-peer communications for its successful

diffusion among potential customers. Therefore, viral market-
The effectiveness of traditional marketing tools appears to be ing campaigns build on the idea that consumers attribute higher
diminishing as consumers often perceive advertising to be credibility to information received from other consumers via
irrelevant or simply overwhelming in quantity (Porter and referrals than to information received via traditional advertising
Golan 2006). Therefore, viral marketing campaigns may provide (Godes and Mayzlin 2005). Thus, the success of viral marketing
an efficient alternative for transmitting advertising messages to campaigns requires that consumers value the message that they
consumers, a claim supported by the increasing number of receive and actively forward it to other consumers within their
successful viral marketing campaigns in recent years. One social networks.
famous example of a viral marketing campaign is Hotmail, Mobile devices such as cell phones enhance consumers'
which acquired more than 12 million customers in less than ability to quickly, easily and electronically exchange informa-
18 months via a small message attached at the end of each tion about products and to receive mobile advertisements
outgoing mail from a Hotmail account informing consumers immediately at any time and in any location (e.g., using mobile
about the free Hotmail service (Krishnamurthy 2001). In addition text message ads) (Drossos et al. 2007). As cell phones have the
to Hotmail, several other companies, such as the National potential to reach most consumers due to their high penetration
Broadcasting Company (NBC) and Proctor & Gamble, have rate (cf., EITO 2010), they appear to be well suited for viral
successfully launched viral marketing campaigns (Godes and marketing campaigns. As a result, an increasing number of
Mayzlin 2009). companies are using mobile devices for marketing activities.
In general, a viral marketing campaign is initiated by a firm that Research on mobile marketing has thus far devoted limited
actively sends a stimulus to selected or unselected consumers. attention to viral marketing campaigns, particularly with respect to
However, after this initial seeding, the viral marketing campaign the decision-making process of consumer referral behavior for
mobile viral marketing campaigns, e.g., via mobile text messages.
⁎ Corresponding author. Thus, the factors that influence this process remain largely
E-mail addresses: pescher@bwl.lmu.de (C. Pescher), unexplored. The literature on consumer decision-making suggests
p.reichhart@bwl.lmu.de (P. Reichhart), spann@spann.de (M. Spann). that consumers undergo a multi-stage process after receiving a
1094-9968/$ -see front matter © 2013 Direct Marketing Educational Foundation, Inc. Published by Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.intmar.2013.08.001
44 C. Pescher et al. / Journal of Interactive Marketing 28 (2014) 43–54

stimulus (e.g., a mobile text message) and before taking action framework to consider social relationships (e.g., tie strength,
(e.g., forwarding the text message to friends) (Bettman 1979; De degree centrality) when analyzing mobile viral marketing
Bruyn and Lilien 2008). At different stages of the process, various campaigns. Thus, to understand referral behavior, we integrate
factors that influence consumer decision-making can be measured psychographic (e.g., usage intensity) and sociometric (e.g., tie
using psychographic, sociometric, and demographic variables as strength) indicators of consumer characteristics. We are then able
well as by consumer usage characteristics. Whereas previous to determine the factors that influence a consumer's decision to
studies have mainly focused on selected dimensions, our study refer a mobile stimulus and are able to identify the factors that
considers variables from all categories. lead to reading the advertising message and to the decision to
De Bruyn and Lilien (2008) analyzed viral marketing in an learn more about the product.
online environment and discussed relational indicators of
business students who had received unsolicited e-mails from Related Literature
friends. This study provided an important contribution and
amplified our understanding about how viral campaigns work. Viral Marketing and Factors that Influence Consumer Referral
The present paper differs from the work of De Bruyn and Lilien Behavior
(2008) and goes beyond their findings in four important ways:
actor, medium, setting, and consumer characteristics. The first Viral marketing campaigns focus on the information spread of
difference is the actor involved. In viral campaigns, the customers, that is, their referral behavior regarding information or
initiator, usually a company, sends the message to the seeding an advertisement. Companies are interested in cost-effective
points (first level). Next, the seeding points forward the marketing campaigns that perform well. Viral marketing cam-
message to their contacts (second level), and so on. Whereas paigns aim to meet these two goals and can, accordingly, have a
De Bruyn and Lilien (2008) focused on the second-level actors, positive influence on company performance (Godes and Mayzlin
the present study focuses on the first-level actors, e.g., the direct 2009). Companies can spread a marketing message with the
contacts of the company. We believe that for the success of a objective of encouraging customers to forward the message to their
campaign, additional insights into the behavior of first-level contacts (e.g., friends or acquaintances) (Van der Lans et al. 2010).
actors are very important because if they do not forward the In this way, the company then benefits from referrals among
message, it will never reach the second-level actors. The second consumers (Porter and Golan 2006). Referrals that result from a
difference is the medium used in the campaign. Although we viral marketing campaign attract new customers who are likely to
cannot explicitly rule out that participants of De Bruyn and be more loyal and, therefore, more profitable than customers
Lilien's (2008) campaign used mobile devices, they conducted acquired through regular marketing investments (Trusov, Bucklin,
their campaign at a time when the use of the Internet via mobile and Pauwels 2009).
devices was still very uncommon. Therefore, it is reasonable to Two streams of research can be identified. The first is the
assume that at least the majority of their participants used a influence of viral marketing on consumers, and the second is
desktop or a laptop computer when they participated in De research that has analyzed the factors that lead to participating
Bruyn and Lilien's (2008) campaign. In contrast, the present in viral marketing campaigns. First, previous research identified
study explicitly uses only text messages to mobile devices. In that viral marketing influences consumer preferences and pur-
addition, mobile phones are a very personal media which is chase decisions (East, Hammond, and Lomax 2008). Further, an
used in a more active way compared to desktop or laptop influence on the pre-purchase attitudes was identified by Herr,
computers (Bacile, Ye, and Swilley 2014). The third difference is Kardes, and Kim (1991). In addition, viral marketing also
the setting in which the viral campaign takes place. Whereas the influences the post-usage perceptions of products (Bone 1995).
participants in the study by De Bruyn and Lilien (2008) were Second, previous research has identified satisfaction,
business students from a northeastern US university, we conduct customer commitment and product-related aspects as the most
a mobile marketing campaign in a field setting using randomly important reasons for participating in viral marketing campaigns
selected customers. The fourth and most important difference is (cf., Bowman and Narayandas 2001; De Matos and Rossi 2008;
that De Bruyn and Lilien (2008) focused exclusively on relational Maxham and Netemeyer 2002; Moldovan, Goldenberg, and
characteristics. In addition to relational characteristics, this Chattopadhyay 2011). With respect to psychological motives,
paper also considers variables that describe demographic factors, self-enhancement was identified as a motive for consumers to
psychographic factors, and usage characteristics. As these generate referrals (De Angelis et al. 2012; Wojnicki and Godes
variables yield significant results, the study and its findings go 2008). The importance of self-enhancement in addition to social
beyond the findings of De Bruyn and Lilien (2008). benefits, economic incentives and concern for others was identified
The main goal and contribution of this work is, first, to as a motive behind making online referrals (Hennig-Thurau et al.
analyze consumers' decision-making processes regarding their 2004). Referrals can be differentiated into positive and negative
forwarding behavior in response to mobile advertising via their referrals. Anxiety reduction, advice seeking and vengeance are
cell phone (i.e., text messages) in a mobile environment using a factors that contribute to negative referrals (Sundaram, Mitra, and
real-world field study. To analyze consumers' decision-making Webster 1998).
processes, we use a three-stage sequential response model of Within the referral process, the relationships and social
the consumer decision-making process. Additionally, we inte- network position of the consumer are also influential. For
grate consumers' egocentric social networks into a theoretical example, Bampo et al. (2008) found that network structure is