NEW YORK: Word of mouth (WOM) on Twitter exerts a powerful influence on the films that users choose to see in movie theaters, according to research published in the Journal of Advertising Research (JAR).

In The Impact of Word of Mouth via Twitter on Moviegoers’ Decisions and Film Revenues: How WOM about Movies Drives Loss-Aversion and Reference-Dependence Behaviors, three researchers verified the significant role that the social-media service plays as a platform for generating WOM among moviegoers.

Yeujun Yoon and Young Joon Park, from Peking University, collaborated with Charin Polpanumas, a data scientist at online retailer, and reported that “Moviegoers often confront the decision to watch a movie when its quality is not known to them.

“Both the volume and the valence – the positive or negative praise – of word-of-mouth (WOM) comments or reviews play a critical role when evaluating the quality of a newly released movie.”

The paper draws heavily on prospect theory – a behavioral-economic theory widely applied in various social-science disciplines, which describes the way people choose between alternatives that involve risk.

“If people receive positive WOM about a movie, they will likely go to see it because the positive WOM implies that the movie is good. Conversely, if people receive negative WOM about a movie, they are more likely not to watch it.”

The implication for movie marketers, the authors contended, is that “managers must comprehensively understand the characteristics of the WOM effect generated by social media rather than simply focusing on increasing positive WOM.

“They should understand, for example, the properties of loss aversion and the reference dependence of movie-goers receiving Tweets from their friends and should recognize the type of impact these Tweets may have on the movie’s box office success based on previous Tweets.”

Data sourced from Journal of Advertising Research; additional content by WARC staff