The Influence and Implications of Online Groups

To examine the differential effects of online group influence on digital product consumption, Martin Tuchman School of Management Associate Professor Ellen Thomas turned to online music listening, with a distinction between mainstream and niche music. Why music?

First, the music industry has become a hotbed of innovation in both content creative and distribution that can translate to other industries. And second, the industry has high social and cultural significance, writes Thomas and her co-author, Alabama A&M University Associate Professor Jifeng Mu, in the article “Online Group Influence and Digital Product Consumption.” The paper has been accepted by the Journal of the Academy of Marketing Science, the marketing industry’s top academic journal.

The authors note that “consumption is increasingly influenced by consumer reliance on online information such as user reviews and opinions of friends and experts.” As a result, “online information is diminishing the role of traditional indicators of value like brands, loyalty and marketing persuasion.”

Thomas and Mu collected data from Last.fm, a leading proprietary online music sharing and promotion community platform that makes available information on users, online feedback and track quality. They then looked at the influence on music listening of superordinate in-groups (crowds, meaning all members in the group) as compared to subordinate in-groups (friends, meaning subgroups with highly refined tastes within the superordinate in-group).

Their findings showed that, while music listeners can cross in-group lines, superordinate in-groups have a stronger influence on mainstream music listening, and subordinate in-groups have greater sway on niche music listening. “It was also found that the positive effect groups have on online music listening reaches an initial ceiling and then accelerates,” said Thomas of the research.

Broadly, the results demonstrate the integral role online groups play in affecting consumer behavior when it comes to digital product consumption. They also suggest that managers involved in promoting and selling online digital products “must understand the contrasting effects of different groups for better business performance,” and that “marketing strategy should be tied to users, superordinate and subordinate in-groups, and different product categories.”

“Technology continues to impact the availability of digital products and change consumer behavior,” Thomas stressed. “This research is timely as well as novel.”

Thomas and Mu are now studying how user-generated and firm-generated content impact a consumer’s decision to buy.