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How to Manage and Measure the Word of Mouth Revolution

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Every marketer has by now heard the terms viral, buzz, and word of mouth. Some will even have noted terms such as brand advocacy, advergames, blog marketing, influencer panels, and consumer empowerment... seeping into the industry's vocabulary.

Collectively, the latest shift in thinking in the world of marketing has been termed "connected marketing." But what exactly is connected marketing, and why are advertisers so interested in it? More importantly, how can marketers manage and measure it?

This Thing Called Connected Marketing

What is happening now in viral, buzz, and word of mouth marketing is similar to the early days of the Web: Marketers and practitioners are trying new approaches, reviving and evolving old ones, and bandying about catchy terms without always understanding what they mean.

It is like the classic Indian parable about an elephant and six blind men: One blind man touches the trunk and thinks he has bumped into a snake, the other the tail and thinks it is a donkey, the other its leg and thinks he has bumped into a tree trunk, and so on. No one can see the wood for the trees until the zookeeper comes along and presents the wider perspective, the collective view of what is an elephant.


The problem is that there is no common agreement of definitions for the terms viral, buzz, and word of mouth marketing.

In general, viral marketing is often the label of choice for campaigns harnessing online word of mouth connections; word of mouth marketing for campaigns using traditional or offline word of mouth connections; and buzz marketing for campaigns that harness both, often in combination with traditional news media coverage.

But these definitions are not set in stone—and perhaps never can be. For example, if you look at the German market, "viral marketing" has become the accepted term, because "word of mouth marketing" translates as "mund propaganda" (literally "mouth propaganda") and propaganda has negative connotations.

What everyone does seem to agree on is that all viral, buzz, and word of mouth marketing techniques—and a whole range of other approaches that fall within this sphere (see following figure)—are about leveraging consumer connections in order to create conversations that add measurable value to a brand.

Kirby1.jpg

We have gone a step further and coined the umbrella term "connected marketing" to denote any kind of marketing (from product research and development, through production, to promotion by any means, including traditional advertising) that creates conversations in target markets that add measurable value to a brand.

At the end of the day, successful connected marketing is not about what you call what you do, but about how you do it and what it achieves. You measure the outcome, not the terminology. So, rather than get bogged down in definitions, let's look at why people are interested in connected marketing, how to go about it, and how success is measured.

Why Are Advertisers so Interested?

"The traditional marketing model we all grew up with is obsolete." —Jim Stengel, Global Marketing Officer, Procter & Gamble, 20041

"Mass marketing today is a mass mistake." —Larry Light, Chief Marketing Officer, McDonalds, 20042

"For the first time the consumer is boss, which is fascinatingly frightening, scary and terrifying, because everything we used to do, everything we used to know, will no longer work." —Kevin Roberts, Chief Executive, Saatchi & Saatchi 20053

Marketing today is in a state of turmoil. Industry leaders say traditional marketing campaigns, based on mass media advertising, are not working anymore. And the facts back them up. A 2004 study into advertising effectiveness by Deutsche Bank in the US consumer packaged goods sector found that only 18% of television advertising campaigns generate a positive return on annual investment, while the Harvard Business Review reports that for every dollar invested into traditional advertising for consumer packaged goods, the short-term return on investment is just 54 cents.4

Marketing in the business-to-business sector fares no better: An astonishing 84% of B2B marketing campaigns actually result in a fall in market share and brand equity.5

Throwing money at the problem doesn't seem to help—doubling campaign budgets for established products can lead to an increase in sales of just 1-2%.6 And quality over quantity doesn't seem to impact on efficacy, either—great ads don't mean great sales, as illustrated by the award-winning Budweiser "Whassup?" campaign in 2000. Budweiser's US market share actually dropped 1.5-2.5 percentage points during the campaign, with sales in barrels falling 8.3%—the largest revenue drop the company had experienced since 1994.7

Given the falling returns and increasing costs associated with traditional marketing campaigns, it was only a matter of time before shareholders and boardroom directors began to look at marketing as the next cost bucket to rationalize.

One solution has been to reduce media costs by using free media—word of mouth connections to propagate marketing messages. As well as being free, word of mouth connections are influential: A 2004 UK survey by consultants CIA:MediaEdge of 10,000 consumers found that 76% cite word of mouth as their main influence on their purchasing decisions, compared with traditional advertising's mere 15%.

In the US, NOP (now GfK) research shows that 92% of Americans cite word of mouth as their preferred source of product information. Advertising company Euro RSCG has found that when it comes to generating excitement about products, word of mouth is 10 times more effective than TV or print advertising.8

Why should this be? Why should word of mouth connections become even more important in influencing buying behavior in an age when media formats and channels are proliferating? The answer has five facets:

  1. New personal communications technologies and digital media such as blogs, instant messaging, mobile telephones, email, online review sites, and personal Web sites are increasing the speed, reach, and utility of word of mouth.

    Digital media's capabilities in turbo-charging the viral spread of information means that well-planned and well-executed connected marketing initiatives—particularly those that integrate more traditional marketing communications techniques in their activities—can help business messages reach the mass market in a way that would require a significant investment if left to more traditional techniques alone.

  2. Increased marketing literacy among buyers means people increasingly dismiss traditional marketing campaigns as biased "propADganda." Instead, they turn to trusted word of mouth sources for advice.

  3. Acute advertising clutter is making it increasingly difficult for traditional marketing campaigns to break through and capture people's attention. To avoid the advertising cacophony, buyers turn to their friends for word of mouth recommendations.

  4. Accelerating media fragmentation is shrinking media audiences; more channels, more media are making it harder for advertisers to find and reach their target markets through traditional marketing campaigns.

  5. New ad blocking technology is empowering people to skip, stop, or avoid unwanted advertising messages and interruptive marketing campaigns.

Today, consumers are more involved than ever before in controlling communications and message delivery at a global level. And many brands are now finally realizing that "the most powerful selling of products and ideas takes place not marketer to consumer but consumer to consumer."9

Of course, it is one thing for marketers to realize that word of mouth connections are powerful media. But it is quite another to know how to harness this media for commercial gain.

Enter connected marketing. Its techniques—such as viral, buzz, blog, and influencer marketing—enable marketers to reach and engage with clients, customers, and consumers, tapping into that powerful marketing media to drive demand and business growth.

How Can We Manage Connected Marketing?

There is no 12-steps-to-success formula for connected marketing. However, managing successful connected marketing activity is possible through an organized series of decisions and approaches; it's not a hit-or-miss quest for that one groundbreaking idea.

The connected marketing toolbox provides an overview of techniques that can generate brand advocacy—i.e., ignite positive conversations that add measurable value to a brand. The challenge in managing successful connected marketing activity is not so much about which approach is used at a practical campaign level, but more about taking a step back and ensuring that the principles of connected marketing are embedded into a company's strategic thinking.

Integration, Not Isolation

It may be an overstatement to say that traditional advertising is no longer working, though it is certainly true that it is generally less effective. However, using non-traditional techniques such as viral marketing in isolation is no guarantee of success, either, particularly if you are trying to build and sustain global brands.

Successful, long-term connected marketing activity not only connects a brand to consumers, and vice versa, but also integrates the different ways in which marketers approach consumers—from viral, buzz, and word of mouth techniques to advertising, direct marketing, sales promotion, PR, and more—across the entire marketing mix.

Even more fundamentally, connected marketing should ideally sit at the heart of the business, involving customers, employees, and consumers in product research, production trials, seeding trials, and every step of product or service development before even getting to marketing communications and promotion.

A good start to developing an integrated connected marketing strategy is to listen to what customers are already saying about your brand, and to identify and involve the most influential customers in your business.

The People You Need to Reach

Marketing is no longer simply about trying to identify the 20% of your customers who represent 80% of your revenue, then keeping this group loyal and trying to acquire more who fit their profile. Having happy, enthusiastic brand advocates or evangelists is an asset. But it is not enough to drive business growth.

With connected marketing, the aim is to profile and recruit customers who represent the 10% of society that helps influence the majority of all purchasing decisions. These influencers, or opinion leaders, as they are called, are not necessarily the customers who spend the most money with you, but they are the most important people you can reach, because they are the ones who can help amplify and accelerate positive word of mouth about your brand.10

Influencers can be identified only by using a validated opinion leader scale—several have been developed by specialist researchers. No matter which scale you use, they all give influencers the same defining characteristic: opinion-leading individuals who frequently offer or are elicited for category-related advice.

After finding influencers, how do you engage with them? It doesn't matter whether you have an existing product or are about to launch a new one. The point is to make sure that you develop ongoing, two-way relationships with influencers—from giving them a trial before the product is available to the mass market, to going back a step and getting them involved in your research and development.

Even if your product or service is not particularly innovative, a buzzworthy connected marketing campaign first seeded with influencers and opinion leaders can lead to success.

The key to engaging with influencers is to make sure that you always give them experiences that exceed expectations. You then cannot fail; you will generate goodwill and advocacy that will go a long way toward kick-starting positive word of mouth and wider interest in your product, service, or campaign.

Aside from getting to grips with influencers, there are a number of more fundamental connected marketing activities that marketers should undertake to interact with existing and potential customers.

There has been a lot of hype around the emergence of user-generated media such as blogs and forums, and how they can be monitored and used to generate buzz for brands. The reality is that there are a lot of free tools available to marketers who want to track what is being said online about their brand and by whom. So, before you jump into bed with any buzz monitoring or marketing specialists, have a good look around at what you can get for free.

Regardless of which online tools you use to monitor buzz, real insight into who is saying what about your brand and what impact that word of mouth is having will always require human research and analysis. It is important not only to listen to what people are saying but also to get involved yourself as a brand—don't just leave it to your marketing partners.

At the most basic level, this activity involves simply keeping your eyes and ears open at your brand's current touch points, such as listening to customers in the call center and reading customer service emails. Make sure you are both proactive and reactive, helping ignite positive conversations and reduce or fix swiftly any negative ones. (Negative word of mouth can reduce your bottom line to a greater extent than positive word of mouth can increase it!)

One useful tool to help identify and reduce instances of negative word of mouth is defensive buzz monitoring. It detects negative word of mouth—but it is then up to the brand to counteract or fix whatever is causing the problem. Being involved and connected with its target markets to start with will put a brand one step ahead of any problems.

Once marketers have reached and engaged with influencers and other consumers via connected marketing activity, it's time to track the impact that the word of mouth is having on the brand's bottom line.

How Can We Measure Connected Marketing?

Connected marketing is not about control; it is about management. And you cannot manage what you cannot measure.

However, looking at the wide range of connected marketing experiences and approaches in the connected marketing toolbox, you can see that we are not comparing apples with apples. So we cannot apply the same set of standards of measurement to, for example, an overtly branded marketing message that spreads virally, and to the use of a product referral agent whose motivation is ambiguous (i.e., it could be spontaneous or the result of incentives).

Unfortunately, most marketers still work within the brand awareness creation paradigm. So certain connected marketing techniques—particularly those that include buzzworthy advertising—are still being measured by cost-per-thousand (CPM) types of metrics, whereby proof of campaign success is based solely on counting eyeballs.

Obviously, this kind of measurement is more easily and precisely monitored online. It can at least prove that connected marketing is a cost-effective way of creating brand awareness, and it has the added dimension of providing a glimpse of peer-to-peer brand endorsement.

However, the resulting statistics do not tell the whole story—particularly with regard to the extent and quality of third-party brand endorsement and its impact on the bottom line.

So what if your viral clip received two million online views? How many of your brand influencers saw it, and how many of them advocated your brand to how many other people within your target market? Who else said what—both good and bad—about the campaign and your brand, both online and offline? And how did that word of mouth impact your sales? None of these vital qualitative queries can be answered by looking at the quantitative results.

Some marketers assert that the outcome of any connected marketing campaign should ultimately be the measurement of recommendation rates, which have been linked to business growth.11

But using a recommendation-rate measurement model alone does not tell brands everything they need to know to help maintain or achieve good business health. What specific actions should be taken post-measurement? How do marketers improve recommendation rates? Which specific areas of the business need improvement?12

One answer proffered to help improve recommendation rates is to use the connected marketing toolbox, the approaches and techniques of which have been proven to ignite positive conversations that add measurable value to a brand.13 However, what works in one business sector for one campaign for one brand at one point in time does not necessarily provide a fixed model of guaranteed success for all businesses.

Further research into this area will help marketers be more scientific about the kinds of connected marketing approaches they use in specific situations, and how the success of this activity is measured.

In the meantime, marketers should be testing and refining their connected marketing activities as experience grows, much as would be done with other business processes such as product research and development.

Embracing Connected Marketing

There are five important factors to bear in mind when getting to grips with connected marketing and bringing it into the heart of a business to help add measurable value to a brand:

  1. Your product, service, or brand should have a standout quality in its class to create self-propelling word of mouth and customer recommendations that a connected marketing campaign will amplify and accelerate.

  2. If your product is not innovative in itself, focus on developing innovative creative executions that generate buzz.

  3. You must find, connect, and collaborate with the people who influence your brand, lead opinions, and spread word of mouth. Remember, the most appropriate ideas for your product innovation or connected marketing activity could well come from external stakeholders, not from your employees or marketing agencies and partners.

  4. Always give your target market, particularly your influencers, experiences that exceed their expectations—a more exciting seeding trial, a different kind of creative campaign, access to your product R&D, etc. You are trying not only to make them aware of your brand but also to engage with it of their own freewill and to recommend it to others.

  5. And finally: integration, integration, integration. It is time to develop internal and external connected marketing strategies that integrate product development and marketing activities in innovative ways, enabling consumers and businesses to connect and collaborate with each other as respected partners, in order to achieve mutually beneficial outcomes.

Note: This article is excerpted from Connected Marketing: The Viral, Buzz and Word of Mouth Revolution by Justin Kirby and Paul Marsden (Butterworth-Heinemann, 2005). Marketingprofs.com readers can order the book at 20% off retail price here: http://www.connectedmarketing.org/order/index.html.

Footnotes:

1. Stengel, J. (2004) "The Future of marketing" Conference speech presented at the AAAA Media Conference. Thursday, February 12, 2004. Archived at http://www.pg.com/content/pdf/04_news/stengel_feb_12_2004.pdf

2. Light, L. (2004) "The end of brand positioning as we know it" Conference speech presented at the ANA Annual Conference. Quote cited in The Ramsey Report, "The State of the Online Advertising Industry," Nov 8, 2004. Archived at http://www.sempo.org/research/ramsey_white_nov04.pdf

3. Quoted in Markillie, P. (2005) "Crowned at last." The Economist, March 31, 2005.

4. Deutsche Bank study findings reported in "The Future of Advertising: The harder hard sell." The Economist, June 24, 2004. Archived at http://www.economist.com/printedition/displayStory.cfm?Story_ID=2787854. ROI figures from Copernicus Marketing Consulting study reported in Clancy, K., & Stone, R. (2005) "Don't Blame the Metrics," Harvard Business Review (Jun), Vol. 83, Issue 6.

5. Clancy & Stone (2005) op cit.

6. ibid.

7. Figures from Zyman, S. (2002) The End of Advertising as We Know It. Hoboken, New Jersey: Wiley, p. 18.

8. Euro RSCG (2001). "Wired and wireless: Key Findings." Report summary archived at http://www.eurorscg.com/starview/doc/ww_summary.pdf

9. Gladwell, M. (2000). The Tipping Point: How Little Things Can Make a Big Difference. Boston: Little, Brown and Company.

10. Burson-Marsteller efluentials studies, 2001-2004.

11. Reicheld: Reicheld, FF (2003). "The one number you need to grow." Harvard Business Review, Vol 81, No. 12.

12. Grisaffe, D. (2005). "Guru Misses the Mark with 'One Number' Fallacy."

13. Marsden, Dr. P. Samson, A. Upton, N. (2005) "Advocacy Drives Growth." Brand Strategy.

 


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Justin Kirby is managing director of Digital Media Communications (www.dmc.co.uk) and the author, with Paul Marsden, of Connected Marketing: The Viral, Buzz and Word of Mouth Revolution. Stéphane Allard also contributed to this article.

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