Discussion

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Looking at our results, we found that they correspond with other existing models of WOM interactions in real-life situations. According to our model, billboard advertising first has the advantage over WOM because it has a higher initial spread. It reaches more people much more rapidly than WOM. However, as time passes, WOM influence gradually overtakes the influence of mass ads and then exceeds. Our research showed that consumers are less likely to spread WOM at the initial rate as the market becomes saturated with WOM spreaders. Even after we incorporated that research and accounted for the decrease in WOM agents after a certain amount of time, WOM influence did not lose any ground and kept growing in our model. This corresponds to the exponential spread nature of WOM as opposed to the linear effect of mass advertisements.

It is interesting to note that for small starting populations, WOM influence never surpasses mass media advertising. With fewer members of population, WOM is more effective at generating revenue due to the additional cost of advertising costs, but mass advertising many more people than WOM. This could be due to the fact that WOM does not have a chance to fully spread before a large percentage of the population is exposed to mass advertising. With a dense population, mass advertisement is more effective at first, but then the effect gradually wanes as WOM rapidly gains more influence.

We also implemented the effects of negative WOM influence. Of course, not all customers are always pleased with a product. Potentially, a displeased customer can spread negative WOM influences to other buyers, and actually decrease sales of the product, which we implemented in our model. We found however, that even with negative WOM, the total amount of positive influence from WOM is far greater than that of mass advertisement, if the starting population is significant in size.

Our research has shown that advertisements are a more reliable way of seeing immediate influence. While viral marketing depends on others to spread the word, one can generally predict and track the number and value of sales resulting from mass advertisements. Furthermore, if increments to the advertising are planned ahead of time and implemented correctly, then there will be a generally linear relationship between the dollars spent and the business generated, because each placement of an ad will affect a purchase reaction in a certain number of people. However, for viral marketing, it is more a toss of the dice, since many people might not be motivated to spread the word about a product. In a possible scenario, when the "host" dies, the message cannot be spread to anyone else. The results from our model suggest that it is more profitable to use mass advertisements to expose potential consumers to new products, but then the company should taper off their usage of mass advertisements as the product gains a loyal WOM following. When used in conjunction, the results are much more significant than either method used in isolation.