Do online searches influence sales or merely predict them? The case of motion pictures

Research output: Contribution to journalArticlepeer-review

Abstract

Purpose
This paper aims to examine whether a film’s search volume causes its ticket sales in different stages of its lifecycle.
Design/methodology/approach
This study tests the causality between searches and sales by using an instrumental variable approach. This study exploits the ideas that consumers’ perception of a product’s consumption risk is correlated with their search efforts and consumers use multiple information sources to infer a product’s consumption risk. As an instrument for a focal film’s search volume, this paper uses review disagreement for past movies related to the focal film. This paper incorporates the ideas in a model of weekly online search volume and revenues and apply it to a movie data set.
Findings
Films’ search volume influences their revenues only until the opening week. A 10% increase in opening-week search volume generates a 7.4% increase in opening-week revenue, while the same increase in pre-launch search volume generates a 4.1% increase. Although searches are not an influencer of sales from the second week on, the random forest models and cross-validation studies find that weekly search volume is a strong predictor of weekly revenues in this period.
Research limitations/implications
Testing the findings in other product categories is important for generalizing the findings.
Practical implications
This study suggests different usage values for online searches, depending on a film’s lifecycle stages. Furthermore, given that review disagreement has a positive influence on opening-week revenue through searches, managers should encourage diverse opinions about their films until the opening week to increase sales through searches.
Originality/value
Regarding the role of online search, previous studies have maintained the perspective that online search is a predictor of sales. This is the first study that finds causality between searches and sales for films.


Original languageAmerican English
JournalEuropean Journal of Marketing
Volume55
DOIs
StatePublished - Jan 23 2021

Keywords

  • Causal relationship
  • Cross-validation
  • Influencer
  • Instrumental variable
  • Machine learning
  • Move revenue
  • Online search
  • Predictor
  • Random forest
  • Review disagreement

Disciplines

  • Marketing

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